M/S GREAVES TRAVEL INDIA PVT. LTD.,NEW DELHI vs. ACIT, NEW DELHI

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ITA 6703/DEL/2016Status: DisposedITAT Delhi02 September 2019AY 2012-135 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Cost Plus Method (CPM) is the most appropriate method for determining the Arm's Length Price (ALP) in this case. This decision was based on the principle of consistency, as CPM was accepted for earlier and subsequent assessment years and by a coordinate bench of the Tribunal for a prior year.

What were the facts?

The assessee, engaged in travel and tourism, used an aircraft for charter services. The Transfer Pricing Officer (TPO) rejected the assessee's Cost Plus Method (CPM) for determining Arm's Length Price (ALP) and applied the Transactional Net Margin Method (TNMM). The Dispute Resolution Panel (DRP) directed the TPO to reconsider comparables.

What were the issues?

The primary issue was the determination of the Most Appropriate Method (MAM) for calculating the Arm's Length Price (ALP) of international transactions. The dispute centered on whether the assessee's adopted Cost Plus Method (CPM) or the TPO's applied Transactional Net Margin Method (TNMM) was appropriate.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH: ‘I-1’’ NEW DELHI

Before: SHRI PRAMOD KUMAR & SHRI K.NARASIMHA CHARY

For Appellant: Mr. Satyajeet Goel, CA
For Respondent: Mr. Sandeep KumarMishra, Sr. DR
Hearing: 01.08.2019Pronounced: 02.09.2019

Assessee by Mr. Satyajeet Goel, CA Revenue by Mr. Sandeep KumarMishra, Sr. DR Date of Hearing 01.08.2019 Date of Pronouncement 02.09.2019 ORDER PER NARASIMHA K. CHARY, JM Aggrieved by the order dated 24/11/2016 passed under section 143(3) read with section 144C (13) of the Income Tax Act, 1961 (for short “the Act”), pursuant to the directions dated 30/9/2016 issued by the Ld. Dispute Resolution Panel (DRP)-I, New Delhi (Ld. DRP), M/s Greaves travel India private limited (“the assessee”) filed this appeal mainly contesting the rejection of the Cost Plus Method (CPM) adopted by the assessee as the Most Appropriate Method for determination of the Arm’s Length Price

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