M/S INTEVA PRODUCTS INDIA AUTOMOTIVE PRIVATE LIMITED,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-3(1)(1), BANGALORE

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ITA 3357/BANG/2018Status: DisposedITAT Bangalore26 October 2022AY 2014-152 pages
AI SummaryRemanded

What did the Tribunal hold?

The ITAT clarified that the AO should consider the operating margin of the Associated Enterprise (AE) segment of the international transaction of the manufacturing segment while determining the Arm's Length Price (ALP). This determination should be based on external TNMM analysis where the AE segment is the tested party.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) issued a corrigendum to its earlier order dated 22.08.22 concerning an appeal for the assessment year 2014-15. The corrigendum clarified a direction given to the Assessing Officer (AO).

What were the issues?

The primary issue was the correct method for determining the Arm's Length Price (ALP) for international transactions, specifically regarding the use of internal versus external TNMM analysis and the tested party.

Which sections of the Income-tax Act were involved?

N/A

AI-generated summary — verify with the full judgment below

Per Padmavathy S., Accountant Member

1.

This appeal was disposed of by the Tribunal vide order dated 22.08.22. In para 32 of the order, the AO has been directed to consider only the operating margin of the AE segment of international transaction of manufacturing segment while determining the ALP considering the internal TNMM analysis, instead the external TNMM analysis, which is an error. Therefore, para 32 of the said orders is modified and substituted to read as under:-

Corrigendum to IT(TP)A No.3357/Bang/2018 Page 2 of 2 “32. We heard both parties, and in view of our decision with regard to ground no.8, where we have remitted the issue back to the AO/TPO, we direct the AO to consider only the operating margin of the AE segment of international transaction of manufacturing segment while determining the ALP considering the external TNMM analysis where the AE segment is the tested party.”

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