ROYAL CANIN INDIA P. LTD,MUMBAI vs. ADDL/JT/DY/CIT/ASSTT/ ITO, NATIONAL E-ASSESSMENT CENTRE/ASST CIT-3(1)(1), DELHI

ITA 1298/MUM/2021Status: DisposedITAT Mumbai22 September 2022AY 2016-1711 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the TPO exceeded his jurisdiction by questioning the commercial wisdom of the assessee's expenditure and by applying the benefit test. The TPO's role is limited to determining the ALP, not to question the prudence of incurring expenses.

What were the facts?

The assessee, Royal Canin India Private Limited, paid franchise fees to its Associated Enterprise, Royal Canin SAS, France. The Transfer Pricing Officer (TPO) disallowed this fee, determining its Arm's Length Price (ALP) as Nil, questioning the need for the payment and applying a benefit test.

What were the issues?

Whether the TPO has the jurisdiction to question the need for an expenditure and apply a benefit test while determining the ALP of international transactions, and whether the franchise fee paid was at arm's length.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 143(3A),Section 143(3B),Section 271(1)(c),Section 234A,Section 234B,Section 234C,Section 234D

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, MUMBAI BENCH “ J”, MUMBAI

Hearing: 27/06/2022Pronounced: 22/09/2022

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the assessment order dated 27/02/2021 passed u/s. 143(3) r.w.s. 144C(13), 143(3A) and 143(3B) of the Income Tax Act, 1961 [ in short ‘the Act’], for the assessment year 2016- 17. 2

2.

Shri Khirendra M. Gupta appearing on be

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 144C(13)

All 3,426 judgments and leading authorities on Section 144C(13) →

Recent GST High Court judgments

Search GST case law →