“international transaction”

Transfer PricingSection 92BSection 92B3,408 judgments

The decision most relied on for international transaction is Sony Ericsson Mobile Communications India Pvt. Ltd. v. CIT (374 ITR 118), cited in 499 judgments on BharatTax.

Leading authorities on international transaction

Sony Ericsson Mobile Communications India Pvt. Ltd. v. CIT

374 ITR 118 · 2015 · High Court

499

citing judgments

The existence of an international transaction for Advertising and Marketing Promotion (AMP) expenditure requires the revenue to discharge the burden of proof. An explanation inserted under Section 92B does not automatically make AMP expenditure an international transaction.

CIT v. EKL Appliances Ltd.

345 ITR 241 · 2012 · High Court

422

citing judgments

Transfer pricing adjustments for outstanding receivables are permissible only if the Tax Officer establishes, through analysis over a period, a pattern indicating an international transaction intended to benefit an associated enterprise. The Tax Officer cannot question purely business decisions like royalty payments or exceed jurisdiction by applying cost-benefit analysis to determine the arm's length price of services.

India Vs. Azadi Bachao Andolan 263 ITR 706 (SC); and Vodafone International Holdings B.V v. Union of India

341 ITR 1 · 2012 · Supreme Court

295

citing judgments

Legitimate tax planning is permissible, allowing taxpayers to arrange their affairs to minimize tax liabilities while respecting the "look at test" for transaction genuineness and the separate entity principle in corporate taxation. The source of funds for treaty-beneficial structures does not automatically invalidate the transaction.

Maruti Suzuki India Ltd. v. CIT

381 ITR 117 · 2016 · High Court

220

citing judgments

The Bright Line Test (BLT) is not a recognized method under the Income-tax Act and Rules for benchmarking advertising, marketing, and promotion (AMP) expenses or for determining the existence of an international transaction or its Arm's Length Price. The Revenue must first establish the existence and price of an international transaction before seeking an ALP adjustment.

Vodafone India Services (P.) Ltd. v. Union of India

368 ITR 1 · 2014 · High Court

172

citing judgments

The issue of shares and share premium is a capital account transaction, not an income-generating event, therefore Chapter X (Transfer Pricing) provisions are not attracted to deem notional or hypothetical income from such transactions.

Sir Kikabhai Premchand v. CIT

24 ITR 506 · 1953 · Supreme Court

156

citing judgments

One cannot make a taxable profit or loss from transactions with oneself, as profit only arises from dealings with external third parties, even when transferring assets between different accounts or divisions of the same entity.

PCIT v. Redington (India) Ltd.

430 ITR 298 · 2021 · High Court

132

citing judgments

A corporate guarantee issued to Associated Enterprises (AEs) is an international transaction under Section 92B, requiring adjustments for guarantee commission due to inherent risk. The reasonable arm's length rate for benchmarking such corporate guarantees can be determined using internal or external comparable uncontrolled prices.

Bausch & Lomb Eye Care (India) Pvt. Ltd. v. Additional CIT

381 ITR 227 · 2016 · High Court

127

citing judgments

The existence of an international transaction must be established before its arm's length price can be determined. An alleged 'excessive' AMP expenditure cannot unilaterally expand the scope of an international transaction if its existence is contested.

Judgments citing international transaction

M/S. Ss Oral Hygiene Products Private Limited, Hyderabad vs. Idcit, Hyderabad

In the result, the appeal is allowed

ITA 105/HYD/2011[2006-07]Status: HeardITAT Mumbai14 Oct 2022AY 2006-07

Section 143(3)Section 92A(2)(g)Section 92C

Rs.1,46,71,277 to Colgate Palmolive Company, USA(CP.,USA). Assessee filed audit report in Form-3CEB in respect of the international transaction. Assessee Company's sole customer is Colgate Palmolive India Ltd. Assessee Company is completely dependent on CP, USA for technical know-how. Section ... other enterprise has exclusive rights. In view of the provisions of section 92A(2)(g), assessee company and CP,USA are associated enterprises. This international transaction of payment of technical fee was referred to the Transfer Pricing Officer for computation of arm's length price, with prior approval

Ocwen Financial Solutions Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Special Range-5, Bangalore

In the result, the appeal filed by the assessee is partly allowed

ITA 342/BANG/2021[2016-17]Status: DisposedITAT Bangalore14 Oct 2022AY 2016-17

Bench: Shri George George K, Jm & Shri Laxmi Prasad Sahu, Am It(Tp)A No.342/Bang/2021 : Asst.Year 2016-2017 M/S.Ocwen Financial Solutions The Assistant Commissioner Private Limited Of Income-Tax V. Pritech Park, Survey No.51 To Special Range – 5 64/4, Block No.12, Unit 2, 5B & Bangalore. 6A Floors, Bellandur Village, Sarjapur Marathahalli Ring Road Bengaluru – 560 103. Pan : Aaaco3764E. (Appellant) (Respondent) Appellant By : Sri.Ankur Pai & Sri. K.R.Vasudevan, Advocates Respondent By : Sri.K.Sankar Ganesh, Jcit-Dr Date Of Pronouncement : 14.10.2022 Date Of Hearing : 13.10.2022 O R D E R Per George George K, Jm : This Appeal At The Instance Of The Assessee Is Directed Against Final Assessment Order Dated 30.03.2021 Passed U/S 143(3) R.W.S. 144C(13) Of The I.T.Act. The Relevant Assessment Year Is 2016-2017. 2. The Brief Facts Of The Case Are As Follows: The Assessee Is A Company Engaged In Providing It Enabled Services To Ocwen Mortgage Servicing Inc. Usvi. The Assessee Is A Wholly Owned Subsidiary Of Ocwen Asia Holdings Limited, Mauritius. For The Assessment Year 2016-2017, The Return Of Income Was Filed On 29.11.2016 Declaring Total Income Of Rs.93,31,44,800. The Case Was Selected For Scrutiny

For Appellant: Sri.Ankur Pai & Sri. K.R.Vasudevan, AdvocatesFor Respondent: Sri.K.Sankar Ganesh, JCIT-DR

Section 143(2)Section 143(3)

I.T.Act dated 20.07.2017 was duly served on the assessee. During the course of assessment proceedings, it was noticed that the assessee had undertaken several international transactions with its Associate Enterprises (AEs). The A.O. referred the matter to the TPO to determine the Arm’s Length Price (ALP) of the international ... Rules, the net profit margin arising in comparable uncontrolled transactions should be adjusted to take into account the differences, if any, between the international transaction and the comparable uncontrolled transactions which could materially affect the amount of net profit margin in the open market. It is not the case

Asst.C.I.T., Bangalore vs. M/S Astrazenca Pharma India Ltd., Bangalore

In the result, the appeal filed by the Revenue is dismissed and the appeal filed by the assessee is partly allowed for statistical purposes

ITA 82/BANG/2015[2010-11]Status: DisposedITAT Bangalore14 Oct 2022AY 2010-11

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.82/Bang/2015 : Asst.Year 2010-2011 The Assistant Commissioner Of M/S.Astrazeneca Pharma India Limited, Ni 12Th Floor, Income-Tax, Large Tax Payers Unit V. Manyata Embassy Business, (Ltu) Rachenahalli, Outer Ring Road Bengaluru. Bangalore – 560 045. Pan : Aabca1722B. (Appellant) (Respondent) It(Tp)A No.170/Bang/2015 : Asst.Year 2010-2011 M/S.Astrazeneca Pharma India The Assistant Commissioner Limited, Ni 12Th Floor, Of Income-Tax, Large Tax V. Manyata Embassy Business, Payers Unit (Ltu) Bengaluru. Rachenahalli, Outer Ring Road Bangalore – 560 045. (Appellant) (Respondent) Revenue By : Sri.Manjunath Karkihalli, Cit-Dr Assessee By : Sri.Nageshwar Rao, Advocate Date Of Pronouncement : 14.10.2022 Date Of Hearing : 12.10.2022 O R D E R Per George George K, Jm : These Cross Appeals Are Directed Against Final Assessment Order Dated 31.12.2014 Passed U/S 143(3) R.W.S. 144C Of The I.T.Act. The Relevant Assessment Year Is 2010- 2011. 2. The Brief Facts Of The Case Are As Follows: The Assessee Is A Company Engaged In The Manufacture & Sale Of Pharmaceutical Products. It Also Undertakes Co- Ordination Of Clinical Trial Services. For The Assessment Year 2010-2011, The Return Of Income Was Filed Declaring Taxable

For Appellant: Sri.Nageshwar Rao, AdvocateFor Respondent: Sri.Manjunath Karkihalli, CIT-DR

Section 143(2)Section 143(3)Section 144CSection 144C(11)Section 92C

I.T.Act was issued on 22.09.2011. During the course of assessment proceedings, it was noticed that the assessee had entered into several international transactions with its Associate Enterprises (AEs), which had exceeded Rs.15 crore. The A.O. referred the matter to the Transfer Pricing Officer (TPO) to determine the Arm’s Length ... Price (ALP) of the international transactions undertaken by the assessee with its AEs. The TPO passed order u/s 92CA of the I.T.Act dated 29.01.2014 proposing Transfer Pricing adjustment of Rs.11,84,06,803. Pursuant to the TPO’s order, draft assessment order was passed dated 28.02.2014, wherein the A.O. incorporated

Astrazeneca Pharma India Limited, Bangalore vs. Asst. C.I.T., Bangalore

In the result, the appeal filed by the Revenue is dismissed and the appeal filed by the assessee is partly allowed for statistical purposes

ITA 170/BANG/2015[2010-11]Status: DisposedITAT Bangalore14 Oct 2022AY 2010-11

For Appellant: Sri.Nageshwar Rao, AdvocateFor Respondent: Sri.Manjunath Karkihalli, CIT-DR

Section 143(2)Section 143(3)Section 144CSection 144C(11)Section 92C

Anchor Electricals Pvt. Ltd., Mumbai vs. Jt. CIT - Ccc- 7(2)`, Mumbai

In the result, the appeal of the assessee is partly allowed

ITA 4940/MUM/2018[2014-15]Status: DisposedITAT Mumbai13 Oct 2022AY 2014-15

Bench: Shri Amarjit Singh & Shri Rahul Chaudharyanchor Electricals Vs. Joint Commissioner Of Private Limited Income-Tax, Central 3Rd Floor, I-Think Techno Circle-7(2) Campus, Pokhran Road Room No.655, 6Th Floor, No.2, Thane (W), Aayakar Bhavan, M.K. 400607 Road, Mumbai - 400020 स्थायी लेखा सं./जीआइआर सं./ Pan/Gir No: Aaeca2190C Appellant .. Respondent

For Appellant: M.P. Lohia &For Respondent: Yogesh Kamat

Section 143(3)Section 234CSection 271(1)(c)Section 274

documents filed that the royalty payment for technical knowhow was inadvertently report in payment for royalty anchor brand transaction as under: Sr. No. International transaction Amount (INR) PB/Add. E ref. 1. Payment of royalty „Anchor‟ Debit Note 14,23,73,508 PB Pg No. -120 Debit Note

Infiniti Wholesale Ltd ( Formerly Knwon As Woolwonths Wholesale (India) P.Ltd), Mumbai vs. Asst CIT Cir 8(3), Mumbai

In the result, appeal filed by the Appellant is partly allowed

ITA 7718/MUM/2012[2008-09]Status: DisposedITAT Mumbai13 Oct 2022AY 2008-09

For Appellant: Shri Nitesh JoshiFor Respondent: Michael Jerald

Section 143(3)Section 144CSection 144C(5)Section 92C

proposing and the Hon'ble DRP further erred in partially upholding a total adjustment of Rs 6,90,21,928 in respect of the international transactions pertaining to reimbursement of expenses to its Associated Enterprises ("AE/s"), alleging the same is not at arm's length in terms of the provisions ... proposing the adjustment and the Hon'ble DRP further erred in upholding an adjustment of Rs. 4,90,78,826 in respect of the international transactions pertaining to reimbursement of expenses to its AE, alleging that the same pertains to earlier year and cannot be allowed in the year under

ACIT, Cir- 14(1)(2), Mumbai vs. Wns Global Services Pvt. Ltd., Mumbai

In the result, appeal filed by the assessee is allowed

ITA 2474/MUM/2021[2013-14]Status: DisposedITAT Mumbai12 Oct 2022AY 2013-14

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 14ASection 32(1)

Other Method in view of the following: a. While section 92(1) mentions the word 'shall' when it says, "Any income arising from an international transaction shall be computed having regard to the arm's length price', 'shall' need not always be mandatory and could. also be read ... further held that while section 92C(1) uses the term 'shall' in relation to determination of arm's length price of an international transaction through the prescribed methodologies, which WNS Global Services Pvt. Ltd., makes it appear as though the prescribed methods are mandatory, a watertight interpretation of prescribed methods

ACIT, Circle 14 (1)(2), Mumbai vs. Wns Global Services Pvt. Ltd., Mumbai

In the result, appeal filed by the assessee is allowed

ITA 2473/MUM/2021[2014-15]Status: DisposedITAT Mumbai12 Oct 2022AY 2014-15

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 14ASection 32(1)

M/S. Tivo Tech Private Limited (Formerly Known As Veveo (India) Private Limited), Bangalore vs. Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal by the assessee is partly allowed

ITA 237/BANG/2021[2016-17]Status: DisposedITAT Bangalore12 Oct 2022AY 2016-17

Bench: Shri George George K. & Ms. Padmavathy S

For Appellant: Smt. Tanmayee Rajkumar, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 234BSection 37

case was selected for scrutiny through CASS and a notice u/s.143(2) was duly served on the assessee. In view of the large international transaction carried out by the assessee, a reference was made to the Transfer Pricing Office (TPO). The TPO aggregated the ITE services rendered by the Assessee ... weighted average of the comparable companies is in the range of 6.35 percentile to 19.89 percentile and therefore the assessee concluded that the international transactions are within arm’s length. 11. TPO rejected 6 of the above comparable companies selected by the assessee. The TPO applied new filters and selected

M/S. Macrotech Developers Ltd (Sucessor to Palava Dwellers Pvt. Ltd), Mumbai vs. Income Tax Officer, International Taxation 3(2) (2), Mumbai

In the result, appeal by the assessee is allowed for statistical purpose

ITA 1813/MUM/2022[2016-17]Status: DisposedITAT Mumbai11 Oct 2022AY 2016-17

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri Niraj ShethFor Respondent: Shri Lovish Kumar

Section 201(1)Section 250Section 271CSection 4(2)

Appellant 412, Floor–4, 17G, Vardhaman Chamber Cawasji Patel Road, Horniman Circle Fort, Mumbai 400 001 PAN – AAACL1490J v/s Income Tax Officer …………….Respondent (international transaction) Ward–3(2)(2), Mumbai Assessee by : Shri Niraj Sheth Revenue by : Shri Lovish Kumar Date of Hearing – 06/10/2022 Date of Order – 11/10/2022

The Dy Comm of Income Tax (It) -Circle 3(3) (2), Mumbai vs. M/S. Principal Investors Fund Inc International Growth Fund, Mumbai

In the result, appeal by the Revenue is allowed for statistical purpose

ITA 1795/MUM/2022[2011-12]Status: DisposedITAT Mumbai11 Oct 2022AY 2011-12

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: NoneFor Respondent: Shri Lovish Kumar

Section 144Section 147Section 148Section 250Section 271(1)(c)

No.1794/Mum./2022 (Assessment Year : 2010–11) (Assessment Year : 2010–11) ITA No.1795/Mum./2022 (Assessment Year : 2011–12) Dy. Commissioner of Income Tax ……………. Appellant International Transaction Circle–3(3), Mumbai v/s M/s. Principal Investors Fund Inc. International Growth Fund KPMG House, Kamla Mills Compound …………….Respondent 448, Senapati Bapat Marg Lower Parel

The Dy Comm of Income Tax (It) -Circle 3(3) (2), Mumbai vs. M/S. Principal Investors Fund Inc International Growth Fund, Mumbai

In the result, appeal by the Revenue is allowed for statistical purpose

ITA 1794/MUM/2022[2010-11]Status: DisposedITAT Mumbai11 Oct 2022AY 2010-11

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: NoneFor Respondent: Shri Lovish Kumar

Section 144Section 147Section 148Section 250Section 271(1)(c)

The DCIT (It) -Circle 3(3) (2), Mumbai vs. M/S. Principal Investors Fund Inc International Growth Fund, Mumbai

In the result, appeal by the Revenue is allowed for statistical purpose

ITA 1793/MUM/2022[2010-11]Status: DisposedITAT Mumbai11 Oct 2022AY 2010-11

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: NoneFor Respondent: Shri Lovish Kumar

Section 144Section 147Section 148Section 250Section 271(1)(c)

B Braun Medical (India ) Pvt. Ltd, Mumbai vs. DCIT -1(2) (1), Mumbai

ITA 454/MUM/2022[2017-18]Status: DisposedITAT Mumbai10 Oct 2022AY 2017-18

Section 143(3)Section 144C(15)(B)Section 144C(15)(b)Section 144C(2)Section 92C

case was selected for scrutiny. The assessee’s case was referred by the Ld. AO to the TPO for determination of ALP for the international transaction entered into by the assessee and the TPO had proposed no variation in income thereafter draft assessment order dated 25-03-2021 was passed ... assessee’s case under section 92CA of the Income-Tax Act to the TPO for determination of arm’s length price of the international transaction entered into by the assessee for the impugned year for which the TPO has held that the assessess’s international transactions with

Sotc Travel Services P.Ltd, Mumbai vs. DCIT RG 3(3)(1), Mumbai

In the result, appeal by the assesse is allowed for statistical purpose

ITA 3656/MUM/2016[2009-10]Status: DisposedITAT Mumbai10 Oct 2022AY 2009-10

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri Madhur Agrawal &For Respondent: Shri Chetan M. Kacha

Section 14Section 14ASection 250Section 254(1)Section 40

During the course of assessment proceedings, reference was made to the Transfer Pricing Officer (‘TPO‟) for determination of arm’s length price of international transactions entered into by the assessee. During the course of transfer pricing assessment proceedings, the assessee was asked to provide the details of reimbursement made ... credible evidence to prove that any services has been rendered by the AE. Accordingly, the TPO determined the arm’s length price of the international transaction of reimbursement of expenses to AE as Nil and proposed an adjustment of Rs. 6,94,24,899/- to the international transaction undertaken

Csav Group (India) Pvt. Ltd., Gurgaon vs. DCIT, Gurgaon

In the result, appeal by the assessee is partly allowed for statistical purpose

ITA 1941/DEL/2015[2010-11]Status: DisposedITAT Mumbai10 Oct 2022AY 2010-11

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri Rajan R. VoraFor Respondent: Ms. Samruddhi D. Hande

Section 143(3)Section 144CSection 234BSection 271(1)(c)Section 92CSection 92D

total income of the Assessee on account of difference in the arm's length price of international transactions pertaining to Back Office Support Services segment. 2. On facts and in law, the Ld. AO/Ld. Additional Commissioner of Income-tax, Transfer Pricing Officer-I (3), New Delhi ... with Rule 10D(4) of the Rules, which mandate the use of contemporaneous data for the determination of arm's length price ("ALP") of international transactions. 7. On the facts and in law, the Ld. AO erred on facts and in law in proposing an adjustment

Softlayer Technologies India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 6(1)(2), Bangalore

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 265/BANG/2021[2016-17]Status: DisposedITAT Bangalore10 Oct 2022AY 2016-17

Bench: Shri George George K & Shri Laxmi Prasad Sahu

For Appellant: Shri Padamchand Khincha, C.AFor Respondent: Dr. Manjunath Karkihalli, CIT (DR)

Section 143(3)Section 92C

adjustment pertaining to the Information Technology (‘IT’) infrastructure support services, erred on facts and in law by not restricting the adjustment proportionate to the international transaction undertaken by the Appellant with respect to IT infrastructure support services. [Ground of appeal no. 1 – Second additional grounds of appeal filed ... March 2016 as a deemed loan and benchmarking the same; (b) Not appreciating that the outstanding receivables were a consequence to the principal international transaction and could not be considered as a separate international transaction; (c) Benchmarking the outstanding receivables against the 6 Month LIBOR plus 450 basis points

Wipro Ge Healthcare Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal filed by the assessee in IT(TP)A No

ITA 703/BANG/2021[2012-13]Status: DisposedITAT Bangalore07 Oct 2022AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri K.R. Pradeep &For Respondent: Shri Praveen Karanth, D.R

Section 143(3)Section 254Section 92C

comparable is found in respect of royalty payment by the assessee then the TPO/AO may consider the royalty payment as part of the international transactions under trading segment and then determine the ALP by considering the royalty as part of operating cost for the purpose of computing the margin ... found in respect of payment of royalty by the assessee, then the TPO/AO may consider the royalty payment on part of the international transaction under trading segment and determine the ALP by considering the royalty as part of operating cost for the purpose of computing the margin in the trading

Wipro Ge Healthcare Private Limited (Earlier Known As Ge Medical Systems India Private Limited), Bangalore vs. Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal filed by the assessee in IT(TP)A No

ITA 344/BANG/2021[2006-07]Status: DisposedITAT Bangalore07 Oct 2022AY 2006-07

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri K.R. Pradeep &For Respondent: Shri Praveen Karanth, D.R

Section 143(3)Section 254Section 92C

Asst CIT Cir 2(2)(1), Mumbai vs. Mahindra & Mahindra Ltd, Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1739/MUM/2015[2010-11]Status: DisposedITAT Mumbai04 Oct 2022AY 2010-11

Bench: Shri M. Balaganesh () & Smt. Kavitha Rajagopal () Mahindra & Mahindra Limited Vs Asst.Commissioner Of Income-Tax, Corporation Taxation, P.K. Kurne Circle-2(2)(1), Mumbai Chowk, Worli, Mumbai-400 018 Aayakar Bhavan, M.K. Road Pan : Aaacm3025E Mumbai-400 020 Appellant Respondent Asst.Commissioner Of Income-Tax, Vs 020Mahindra & Mahindra Limited Circle-2(2)(1), Mumbai Corporation Taxation, P.K. Kurne Aayakar Bhavan, M.K. Road Chowk, Worli, Mumbai-400 018 Mumbai-400 Pan : Aaacm3025E Appellant Respondent

Section 143(3)Section 144CSection 14ASection 35Section 40Section 80I

objection before the DRP-1, Mumbai and was subsequently transferred to DRP-IV, Mumbai. It was observed that the assessee had entered into international transactions including supply of medical and spares, rendering of services, provisions of loans and corporate guarantee on investment in equity shares with its AEs. Subsequent ... disallowance is hereby deleted. This ground is allowed for statistical purpose. GROUND 6 : ADJUSTMENT UNDER SECTION 92CA(3) TO ARM’S LENGTH PRICE OF INTERNATIONAL TRANSACTION FOR ARM’S LENGTH PRTICE ADJUSTMENT OF RS.1,27,73,700/-. 33. This ground of appeal raised by the assessee is on addition