“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

Micro Focus Software Inc. (Earlier Known As Novell Inc.), Usa vs. The Dy CIT (Intl. Taxation)-Circle-3(2)(2), Mumbai

In the result, the appeal is allowed in the terms indicated above

ITA 863/MUM/2021[2017-18]Status: DisposedITAT Mumbai30 May 2022AY 2017-18

Section 139(1)Section 143(3)Section 234A

estimated on a reasonable basis". The DTAA does not refer to arm's length payment. The principles contained in the matter of income from international transaction on an arm's length price are contained in section 92 of the Income-tax Act. The principles have been clarified by the Finance ... reasoning given by the Tribunal has to be set aside. In matters of tax what has to be considered and more so in international transactions if there be a treaty, the provisions of the treaty and if the provisions of the treaty are more advantageous to an assessee, then

DCIT 16 (1), Mumbai vs. Tv 18 Braodcast Limited, Mumbai

In the result, the appeal filed by the Assessing Officer is dismissed in the terms indicated above

ITA 2502/MUM/2021[2012-13]Status: DisposedITAT Mumbai30 May 2022AY 2012-13

Section 143(3)Section 92F

transaction, or a number of such transactions, is identified, and then such price is adjusted to account for differences, if any, between the international transaction and the comparable uncontrolled transactions or between the enterprises entering into such transactions, which could materially affect the price in the o pen market. Usually

ACIT -Cir 16(1), Mumbai vs. Tv 18 Braodcast Limited, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 2501/MUM/2021[2013-14]Status: DisposedITAT Mumbai30 May 2022AY 2013-14

Section 143(3)Section 92F

uncontrolled transaction, or a number of such transactions, is identified, and then such price is adjusted to account for differences, if any, between the international transaction and the comparable uncontrolled transactions or between the enterprises entering into such transactions, which could materially affect the price in the o pen market

O/O DCIT 3(3) (1), Room No. 668, Aaykar Bhavan, M.K.Road, Churchgate, Mumbai vs. M/S. Sikka Ports & Terminals Ports Ltd, Mumbai

In the result, the appeal of the assessee is allowed and the appeal of the Assessing Officer is dismissed

ITA 2139/MUM/2021[2013-14]Status: DisposedITAT Mumbai30 May 2022AY 2013-14

Section 143(3)Section 92BSection 92C

confirming the order of the AO/TPO in treating the guarantee given by Appellant to banks for giving loan to its Associated Enterprises as International Transaction within the meaning of Section 92B r.w.s. 92(1) of the Act. 2. erred in determining the ALP of gurantee commission at 0.50% p.a. given ... business of port infrastructure facilities and engineering, construction and consultancy services etc. During the relevant previous year, the assessee entered into several international transactions with it‟s associated enterprises abroad. When ascertainment of the arm‟s length price came up for the consideration of the Transfer Pricing Officer

Sikka Ports & Terminals Ltd, Mumbai vs. DCIT 3(3) (1), Mumbai

In the result, the appeal of the assessee is allowed and the appeal of the Assessing Officer is dismissed

ITA 2022/MUM/2021[2013-14]Status: DisposedITAT Mumbai30 May 2022AY 2013-14

Section 143(3)Section 92BSection 92C

Tv 18 Broadcast Ltd, Mumbai vs. ACIT Cir 16(1), Muimbai

In the result, appeal of the Revenue is dismissed

ITA 1976/MUM/2021[2013-14]Status: DisposedITAT Mumbai30 May 2022AY 2013-14

Section 143(3)Section 92F

Tv 18 Broadcast Ltd, Mumbai vs. ACIT 16(1), Mumbai

In the result, the appeal filed by the Assessing Officer is dismissed in the terms indicated above

ITA 1975/MUM/2021[2012-13]Status: DisposedITAT Mumbai30 May 2022AY 2012-13

Section 143(3)Section 92F

M/S. Maxim Integrated Products India Sales Private Limited, Bengaluru vs. Deputy Commissioner of Income-Tax, Circle-4(1)(1), Bengaluru

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

ITA 208/BANG/2022[2017-18]Status: DisposedITAT Bangalore30 May 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Narendra Kumar Jain, AdvocateFor Respondent: Shri Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

Section 92C

cater to the needs of its AE under which the company will provide marketing services on commission basis. The assessee rendered the following international transactions during the year under consideration:- Sl.No. Particulars Amount 1 Provision of Marketing & Sales support services 44516132 2 Reimbursement of expenses paid 4610344 3 Recovery ... Tribunal. 7. The TPO during the proceedings u/s. 92CA of the Income-tax Act, 1961 [the Act] treated the receivables as a separate international transaction to be benchmarked separately. In this regard, the TPO relied on various judicial pronouncements to hold that the aggregation of transactions is possible only when

M/S. Trianz Holdings Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, ground 34 is allowed

ITA 233/BANG/2021[2016-17]Status: DisposedITAT Bangalore30 May 2022AY 2016-17

Bench: Shri N. V. Vasudevan & Ms. Padmavathy Sit(Tp)A No.233/Bang/2021 Assessment Year : 2016-17 M/S. Trianz Holdings Pvt. Ltd., Acit, Vs. No.165/2, 6Th Floor, Kalyani Magnum, Circle – 7(1)(1), Doraisani Palya, Iim Post, Bengaluru. Bannerghatta Road, Bengaluru-560 076. Pan : Aafca 8051 P Appellant Respondent

For Appellant: Shri. K. R. Vasudevan, AdvocateFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 14ASection 92BSection 92C

No.233/Bang/2021 Page 2 of 14 Dispute Resolution Panel (“Hon’ble DRP”) grossly erred in adjusting the transfer price of the Appellant’s international transactions with its Associated Enterprises (“AEs”) by INR 18,122,690 under Section 92CA of the Income-tax Act, 1961 (“the Act”). Adjustment pertaining to Corporate Guarantee ... Learned AO/ Learned TPO / Hon’ble DRP erred in not appreciating the fact that the issuance of corporate guarantee is not an international transaction as per section 92B of the Act. 3. The Learned TPO/ Learned AO/ Hon’ble DRP has erred in not considering the fact that corporate guarantee

Dy.Commissioner of Income Tax Circle-2(1)(1), Bangalore vs. M/S Axa Group Solutions Private Limited, Bangalore

In the result, the appeals of the revenue are dismissed

ITA 3279/BANG/2018[2011-12]Status: DisposedITAT Bangalore30 May 2022AY 2011-12

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Sankar Ganesh, Jt.CIT(DR)(ITAT), BengaluruFor Respondent: Smt. Tanmayee Rajkumar, Advocate

Section 10ASection 115JSection 143(1)Section 14ASection 92C

Support Services. The assessee is remunerated on a time cost or fixed price basis for the works assigned by AXA Group. The details of international transaction as per 3CEB is as given below:- International Transactions as per 3CEB Report Sl. Transaction Amount ... CASS the case was selected for scrutiny. The assessing officer (AO) referred the case to Transfer Pricing Office (TPO) u/s.92CA as the assessing had international transactions. The TPO accepted the ALP towards all transactions but made an adjustment towards ALP of management fees for an amount of Rs.2

Dy.Commissioner of Income Tax Circle-1(1)(1), Bangalore vs. M/S Axa Group Solutions Private Limited, Bangalore

In the result, the appeals of the revenue are dismissed

ITA 555/BANG/2017[2011-12]Status: DisposedITAT Bangalore30 May 2022AY 2011-12

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Sankar Ganesh, Jt.CIT(DR)(ITAT), BengaluruFor Respondent: Smt. Tanmayee Rajkumar, Advocate

Section 10ASection 115JSection 143(1)Section 14ASection 92C

Levi Staruss (India) Private Limited, Bangalore vs. DCIT, Bangalore

In the result, the appeal filed by assessee stands partly allowed as indicated hereinabove

ITA 695/BANG/2016[2011-12]Status: DisposedITAT Bangalore30 May 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 695/Bang/2016 Assessment Year : 2011-12 M/S. Levi Strauss (India) Pvt. Ltd., The Deputy Sjr Cyber, 7Th Floor, Commissioner Of No. 22, Laskar Hosur Road, Income Tax, Adugodi, Circle 4 (1)(1), Bangalore – 560 030. Vs. Bangalore. Pan: Aaacl3092Q Appellant Respondent Assessee By : Shri Nageswar Rao, Advocate : Dr. Manjunath Karkihalli, Revenue By Cit Dr Date Of Hearing : 31-03-2022 Date Of Pronouncement : 30-05-2022 Order Per Beena Pillaipresent Appeal Is Filed By The Assessee Against The Final Assessment Order Dated 28.01.2016 U/S. 143(3) R.W.S. 144C Of The Act By The Ld.Dcit, Circle – 4 (1)(1), Bangalore For Assessment Year 2011-12 On Following Grounds Of Appeal. “Based On The Facts & Circumstances Of The Case & In Law, Levi Strauss (India) Private Limited (Hereinafter Referred To As "Appellant") Respectfully Craves Leave To Prefer An Appeal Against The Order Passed By The Learned Assessing Officer (Hereinafter Referred To As The "Learned Ao") Under Section 143(3) Read With Section 144C Of The Income-Tax Act, 1961("The Act") On The Following Grounds:

For Appellant: Shri Nageswar Rao, Advocate

Section 143(3)Section 144C

total income of the Appellant on account of adjustment in the arm's length price of the international transactions entered by the Appellant with its associated enterprise; 4. The learned TPO and the learned AO have erred, in law and in facts, by not accepting the economic analysis undertaken ... read with the Income Tax Rules, 1962 ("Rules"), conducting a fresh economic analysis for the determination of the ALP in connection with the impugned international transaction, and holding that the Appellant's international transaction is not at arm's length; 5. The impugned order is violative of the principles

M/S. Te Connectivity Services India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

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

ITA 300/BANG/2021[2016-17]Status: DisposedITAT Bangalore26 May 2022AY 2016-17

Bench: Shri Chandra Poojari & Smt. Beena Pillaiit(Tp)A No.300/Bang/2021 Assessment Year : 2016-17

For Appellant: Shri Sriram Sheshadri & Ms. Amulya K., CAsFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 143(3)

selecting the most appropriate method, the extent to which reliable and accurate adjustments can be made to account for differences, if any, between the international transaction and the comparable uncontrolled transaction or between the enterprises entering into such transactions must be taken into consideration. • Reliance is also placed on para ... relation to the treatment of amortisation of G/W as a non- operating item for determining its margin, is accepted by this Tribunal, the international transaction of provision of ITES by the Appellant would be at arm's length, without any further adjustments in relation to the inclusion/exclusion of comparable companies

Deputy Commissioner of Income Tax -5(3)(1), Mumbai vs. Ratnakala Export Private Limited, Mumbai

In the result, the appeal of the Revenue stands dismissed

ITA 5454/MUM/2017[2012-13]Status: DisposedITAT Mumbai25 May 2022AY 2012-13

Bench: Shri Prashant Maharshi () & Kavitha Rajagopal () Dy. Commissioner Of Income-Tax- Vs Ratnakala Export Pvt Ltd 5(3)(1), Room No.519, 5Th Floor Dc-7250, Bharat Diamond Bourse Aayakar Bhavan, M.K. Road Bkc Bandra (E), Mumbai-400 051 Mumbai-400 020 Pan : Aaecr3763L Appellant Respondent

Section 143(3)Section 271GSection 92Section 92CSection 92C(1)Section 92D

271G by holding that the assessee had made substantial compliance, failing to note that under TNMM adopted by the assessee, the profit of the international transaction has to be furnished, whereas the assessee has only furnished the entire level margins which consists of overall profits on AE and significant ... assessment proceedings, the Assessing Officer made reference to the Transfer Pricing Officer (for short ‘TPO’) to determine the arms length price for the following international transactions:- S.No. Nature of the international transactions Amount in (Rs.) 1. Purchase of rough diamonds 254,07,36,605 2. Sales of rough diamonds

Galax E Solutions India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

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

ITA 389/BANG/2021[2016-17]Status: DisposedITAT Bangalore25 May 2022AY 2016-17

Bench: Shri N.V. Vasudevan & Ms. S. Padmavathyit(Tp)A No.389/Bang/2021 Assessment Year : 2016-17 Galax E Solutions India Pvt.Ltd. Vs. The Deputy Commissioner Of Income Tax, Unit No.4, 8Th Floor, Innovator Block, Itpl, Circle -3(1)(1), Bangalore, Whitefield Road, Bangalore 560 066. Pan : Aabcg 9007 F Appellant Respondent Appellant By : Shri. C. J. Brito, Ca Respondent By : Shri. Sumeer Singh Meena, Cit, Dr. Date Of Hearing : 23.05.2022 Date Of Pronouncement : 25.05.2022 O R D E R Per N. V. Vasudevan: This Appeal By The Assessee Is Directed Against The Order Dated 26.5.2021 Of The Deputy Commissioner Of Income Tax, Circle 3(1)(1), Bangalore, (Hereinafter Referred To As The Assessing Officer, “Ao” In Short) Passed U/S.143(3) Read With Section 144C(13) Of The Income Tax Act, 1961 (Act) In Relation To Ay 2016-2017. 2. The First Issue To Be Decided In This Appeal Is With Regard To The Correctness Of Determination Of Arm’S Length Price In Respect Of An International Transaction U/S.92 Of The Act. The Assessee In Engaged In The Business Of Provision Of Software Development Services (Swd Services), To It’S Wholly Owned Subsidiary Company In Usa. In Terms Of The Provisions

For Appellant: Shri. C. J. Brito, CAFor Respondent: Shri. Sumeer Singh Meena, CIT, DR

Section 143(3)Section 144C(13)Section 92Section 92(1)Section 92B(1)

issue to be decided in this appeal is with regard to the correctness of determination of Arm’s Length Price in respect of an international transaction u/s.92 of the Act. The Assessee in engaged in the business of provision of Software Development Services (SWD services), to it’s wholly owned ... company and its subsidiary were Associated Enterprises ("AEs"). In terms of Sec.92B(1) of the Act, the transaction of providing SWD Services was an “international transaction” i.e., a transaction between two or more associated enterprises, either or both of whom are non-residents, in the nature of purchase, sale

Gmr Highways Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 3(1)(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 495/BANG/2020[2016-17]Status: DisposedITAT Bangalore25 May 2022AY 2016-17

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA

Section 14ASection 201Section 234B

issued. The Assessing Officer as per Form 3CB Report filed by the assessee, found that the assessee has international transactions, and referred the matter for determination of Arm's Length Price (ALP) to the Transfer Pricing Officer (TPO). Whereas the TPO made an adjustment of Rs.15 ... commission could be charged on corporate guarantee given for the purpose of furtherance of business of Assessee overseas 3. Corporate Guarantee is not an international transaction, and giving of one to an AE is in the nature of shareholder’s activity in which no costs are involved 4. Without prejudice