“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

Sun Pharmaceuticals Industries Limited, Vadodara vs. The Deputy Commissioner of Income Tax, Central Circle-2(1)(1), Baroda

Appeal is dismissed

ITA 111/AHD/2020[2008-09]Status: DisposedITAT Ahmedabad24 Apr 2024AY 2008-09

Bench: Mrs. Annapurna Gupta & Shri T.R. Senthil Kumarsn

For Appellant: Shri S.N. Soparkar, Sr. Advocate &For Respondent: Dr. Darsi Suman Ratnam, CIT-DR

issue relates to the addition made to the Arm’s Length Price of International Transaction as Corporate Guarantee on account of upward adjustment made to the tune of Rs.39,48,000/- - Corporate Guarantee having been provided by the assessee to its Associated Enterprise Sun Pharmaceuticals Industries Inc. and Sun Pharmaceuticals ... Micro Inks Ltd (supra) was noted to be still pending. The ld. CIT(A), therefore, confirmed the adjustment made by the TPO to the international transaction of corporate guarantee amounting to Rs.39,48,000/- keeping the interest of Revenue in mind. 39. Before us, the ld. Counsel for the assessee

Sun Pharmaceuticals Industries Limited, Vadodara vs. The Deputy Commissioner of Income Tax, Central Circle-2(1)(1), Baroda

Appeal is dismissed

ITA 110/AHD/2020[2007-08]Status: DisposedITAT Ahmedabad24 Apr 2024AY 2007-08

Bench: Mrs. Annapurna Gupta & Shri T.R. Senthil Kumarsn

For Appellant: Shri S.N. Soparkar, Sr. Advocate &For Respondent: Dr. Darsi Suman Ratnam, CIT-DR

Sun Pharmaceuticals Industries Limited, Vadodara vs. The Deputy Commissioner of Income Tax, Central Circle-2(1)(1), Baroda

Appeal is dismissed

ITA 109/AHD/2020[2006-07]Status: DisposedITAT Ahmedabad24 Apr 2024AY 2006-07

Bench: Mrs. Annapurna Gupta & Shri T.R. Senthil Kumarsn

For Appellant: Shri S.N. Soparkar, Sr. Advocate &For Respondent: Dr. Darsi Suman Ratnam, CIT-DR

Goldman Sachs Services Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

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

ITA 298/BANG/2021[2016-17]Status: DisposedITAT Bangalore24 Apr 2024AY 2016-17

Bench: Shri Chandra Poojari & Shri Keshav Dubey

For Appellant: Shri Madhur Agarwal, A.RFor Respondent: Ms. Neera Malhotra, D.R

Section 144C(10)Section 92CSection 92C(3)

reasons. The Hon'ble DRP and learned TPO / AO did not consider that the T PO can proceed to determine the ALP for the international transactions of the Appellant on its own only upon satisfaction of the conditions mentioned in Section 92C(3) of the Act, which were not satisfied ... learned AO/ TPO have erred in making a transfer pricing adjustment at the entity level instead of restricting the adjustment to the cost of international transaction. 2. Disallowance under section 14A of the Act 2.1 The Honorable DRP and the Learned AO have erred in law and on facts

Jaipur Telecom Pvt. Ltd, Jaipur vs. DCIT Circle 1, Jpr, Jaipur

In the result the appeal of the assessee in ITA no

ITA 789/JPR/2023[2018-19]Status: DisposedITAT Jaipur22 Apr 2024AY 2018-19

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Tarun Mittal (C.A.)For Respondent: Smt. Monisha Choudhary (Addl. CIT)

Section 143(3)Section 270ASection 43(1)

books of account; (v) failure to record any receipt in books of account having a bearing on total income; (vi) failure to report any international transaction or deemed international transaction under Chapter X of the Income tax Act.” It is thus clear that in case, AO alleges the misreporting

Jaipur Telecom Private Limited, Jaipur vs. DCIT Circle 1, Jpr, Jaipur

In the result the appeal of the assessee in ITA no

ITA 788/JPR/2023[2017-18]Status: DisposedITAT Jaipur22 Apr 2024AY 2017-18

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Tarun Mittal (C.A.)For Respondent: Smt. Monisha Choudhary (Addl. CIT)

Section 143(3)Section 270ASection 43(1)

Genpact Services Llc, Gurgaon vs. ACIT, Circle-1(3)(1), International Taxation, New Delhi

In the result, the appeal of the assessee is allowed

ITA 1833/DEL/2022[2017-18]Status: DisposedITAT Delhi19 Apr 2024AY 2017-18

Bench: Shri M. Balaganesh & Shri Yogesh Kumar U.S.Genpact Services Llc, Vs. Acit, Plot No. 22A & B, Circle-1(3)(1), Sector-18, Udyog Vihar, International Taxation, Gurgaon, Haryana New Delhi (Appellant) (Respondent) Pan: Aaccg3353P

For Appellant: Shri Vishal Kalra, AdvFor Respondent: Shri Rajesh Kumar, CIT DR

Section 92C

directions. 2. That on facts and in the circumstances of the case and in law, the AO erred in assuming jurisdiction over the international transaction of expenditure incurred towards support services, without appreciating that the same has been considered to be at arm's length ... these services, including the assessee, based on appropriate allocation keys. 6. The ld. AO made reference to the ld. TPO with respect to the international transactions undertaken by the assessee. During the course of assessment, the assessee provided all the details such as Form 3CEB, audited financials, TP Study along

M/S Shree Ganesh Jewellers Limited, Ludhiana vs. ACIT, Circle V(1), Ludhiana

In the result, the appeal of the assessee is allowed

ITA 172/CHANDI/2023[2017-18]Status: DisposedITAT Chandigarh18 Apr 2024AY 2017-18

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri K.J. Shalley, AdvocateFor Respondent: Shri Dharam Vir, JCIT, Sr. DR

Section 143(1)(a)Section 143(3)Section 270ASection 270A(2)(a)Section 271(1)(c)

length price determined by the Transfer Pricing Officer, where the assessee had maintained information and documents as prescribed under section 92D, declared the international transaction under Chapter X, and, disclosed all the material facts relating to the transaction; and (e) the amount of undisclosed income referred to in section 271AAB

Dy. Commissioner of Income Tax, Circle 1(1), Pune, Swargate vs. Grupo Antolin India Private Limited, Pune

The appeal of the Revenue is allowed for statistical purposes in above terms

ITA 1118/PUN/2023[2012-13]Status: DisposedITAT Pune18 Apr 2024AY 2012-13

Bench: Hon’Ble Shri G. D. Padmahshali & Hon’Ble Shri Vinay Bhamoreआयकर अपऩल सं. / Ita No. 1118/Pun/2023 निर्धारण वषा / Assessment Year : 2012-13 Dy. Commissioner Of Income Tax, Central Circle-1(2), Pune . . . . . . . अपीलार्थी / Appellant

For Appellant: Mr Dhanraj Dangi [‘Ld. AR’]For Respondent: Mr Akhilesh Srivastava [‘Ld. DR’]

Section 143(2)Section 143(3)Section 246A(1)Section 250Section 253(2)Section 92C

scrutiny by service of notice u/s 143(2) of the Act. In assessment proceedings upon coming to notice that, the assessee had undertaken certain international transactions, the Ld. AO on approval made a reference to Transfer Pricing Officer [in short ‘TPO’] u/s 92CA(1) of the Act for computing/determining ... Length Price [in short ‘ALP] in relation to such international transactions entered/undertaken by the assessee company. 2.3 On a reference, the Ld. TPO passed an order u/s 92CA(3) of the Act wherein an upward Transfer Price [in short ‘TP’] adjustment for ₹5,68,19,782/- was made in relation

Axis Bank Limited, Ahmedabad vs. Assistant Commissioner of Income Tax, Circle-1(1)(1), Ahmedabad

The appeal of the assessee is partly allowed for statistical purposes

ITA 365/AHD/2022[2018-19]Status: DisposedITAT Ahmedabad10 Apr 2024AY 2018-19

Bench: Mrs. Annapurna Gupta & Shri T.R. Senthil Kumarिनधा"रण वष"/Assessment Year: 2018-19 Axis Bank Limited, Vs. Assistant Commissioner Of “Trishul”, 3Rd Floor, Opp. Income-Tax, Samartheshwar Temple, Nr. Law Circle 1(1)(1), Garden, Ellisbridge, Ahmedabad Ahmedabad-380006 Pan : Aaacu 2414 K अपीलाथ" अपीलाथ"/ (Appellant) अपीलाथ" अपीलाथ" "" "" यथ" "" "" यथ" यथ"/ (Respondent) यथ" Assessee By : Shri Tushar Hemani, Sr. Advocate & Shri Parimalsinh B. Parmar, Ar Revenue By : Dr. Darsi Suman Ratnam, Cit-Dr सुनवाई क" तारीख/Date Of Hearing : 29.11.2023/03.04.2024 घोषणा क" तारीख /Date Of Pronouncement: 10.04.2024 आदेश आदेश/O R D E R आदेश आदेश Per Annapurna Gupta: By Way Of This Appeal, The Assessee-Appellant Has Challenged Correctness Of The Order Dated 28Th July, 2022 Passed By The Assessing Officer Under Section 143(3) R.W.S. 144C(13) R.W.S. 144B Of The Income Tax Act, 1961 [Hereinafter Referred To As “The Act” For Short], For The Assessment Year (Ay) 2018-19. 2. Ground No.1 Raised By The Assessee Reads As Under:- “1. Disallowance In Respect Of Annual Technical Fees (Tax Effect - Rs. 16,84,276) 1.1 The Learned Drp Has Erred In Upholding Addition Made By Ao In Respect Of Treating Annual Technical Services (Ats) Fees Paid To Infosys Limited To The Extent Of Rs. 48.66 Lacs As Prior Period Expense. 1.2. It Is Submitted That The Expenditure Relates To Amount Payable To Infosys & No Part Of The Amount Was Claimed As Expenditure At Any Time In The 2 Axis Bank Limited Vs. Acit Ay : 2018-19

For Appellant: Shri Tushar Hemani, Sr. Advocate &For Respondent: Dr. Darsi Suman Ratnam, CIT-DR

Section 143(3)Section 144C

adjustment of Rs.73,94,337 by rejecting the benchmark conducted by the Bank using Other Method as the most appropriate method with respect to international transaction of interest received from AE on the tier II loan of USD 25 million provided to it and applying an arbitrary spread of 50bps ... computed 6.59% as revised arm's length interest rate.” 37. The above ground relates to the transfer pricing adjustment made to the International Transactions of interest charged on loan provided to Associate Enterprise of the assessee in terms of the provisions of Section 92CA of the Act. 38. The facts

The Asstt. Commissioner of Income Tax, Circle-2, Bharuch vs. M/S. Heubach Colour Pvt. Ltd., Ankleshwar

In the result, the appeal of the Revenue for assessment year 2010-11 is partly allowed for statistical purposes as indicated above

ITA 110/SRT/2017[2010-11]Status: DisposedITAT Ahmedabad10 Apr 2024AY 2010-11

Bench: Shri Ramit Kochar & Ms. Suchitra Kamble

For Appellant: Sh. Milin Mehta, ARFor Respondent: Sh. Atul Pandey, Sr. D.R

Section 143(3)

commission to Heubach GMBH(AE) was also reflected in the audit report furnished in the Form No.3CEB as per section 92E relating to international transactions. The ld. CIT(A) observed that the TPO has examined this international transaction, and passed an order dated 14.12.2012 under section ... submitted that with respect to Heubach GMBH, the transaction was referred by AO to TPO who has not made any adjustment and accepted the international transaction. It was submitted that there is an agreement with Heubach GMBH and they are promoting the sales of the company outside India. The assessee

The Asstt. Commissioner of Income Tax, Circle-2, Bharuch vs. M/S. Heubach Colour Pvt. Ltd., Ankleshwar

In the result, the appeal of the Revenue for assessment year 2010-11 is partly allowed for statistical purposes as indicated above

ITA 3367/AHD/2016[2009-10]Status: DisposedITAT Ahmedabad10 Apr 2024AY 2009-10

Bench: Shri Ramit Kochar & Ms. Suchitra Kamble

For Appellant: Sh. Milin Mehta, ARFor Respondent: Sh. Atul Pandey, Sr. D.R

Section 143(3)

M/S. Tega Industries Limited, Kolkata vs. D.C.I.T., Circle-11(1), Kolkata

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

ITA 539/KOL/2022[2018-2019]Status: DisposedITAT Kolkata08 Apr 2024AY 2018-2019

Bench: Dr. Manish Borad, Hon’Ble & Shri Sonjoy Sarma, Hon’Ble

For Appellant: Shri S.P. Chidambaran, AdvocateFor Respondent: Shri Rakesh Kumar Das, CIT, D/R

Section 144C(5)Section 234BSection 234CSection 80JSection 91

terms of Arm’s Length Price of the said transactions. The ld. TPO after examining the transactions firstly held that there is an international transaction in the form of corporate guarantee given by the assessee to its SPV i.e. Tega Singapore and calculated corporate guarantee @ 6.96% with regard ... Counsel for the assessee had made two fold contentions. Firstly, contending that the alleged transactions do not fall under the category of international transactions and, therefore, no TP adjustment was needed. Secondly, taking an alternative plea it is stated that even if it is considered as an international transactions

Ups Jetair Express Private Limited, Mumbai vs. ACIT - 11(1)(2), Mumbai

Appeal are dismissed, the ground no

ITA 1622/MUM/2015[2010-11]Status: DisposedITAT Mumbai08 Apr 2024AY 2010-11

Bench: Shri Vikas Awasthy & Shri Gagan Goyalआ.अ.सं.1622/मुं/2015 (नि.व. 2010-11)

For Appellant: Shri Nitesh Joshi, AdvocateFor Respondent: Shri Rignesh Das, Sr. DR

Section 144C(1)Section 234BSection 32Section 40

business in January, 2001 and inbound business in April, 2001. 3. During the period relevant to Assessment Year under appeal, the Assessee entered into international transactions with its Associated enterprises (AEs). The TPO vide order dated 9.1.2019 rejected Assessee's benchmarking of international transactions and re-computed arms length price ... methods prescribed under section 92C of the Act. If the Ld AO in course of assessment proceedings finds that the assessee has entered into international transactions with its AE, he may with the previous approval of the authority concerned make a reference to the Ld TPO under section 92CA

ACIT-11(1)(2), Mumbai vs. Ups Jetair Express Pvt. Ltd., Mumbai

ITA 1591/MUM/2015[2010-11]Status: DisposedITAT Mumbai08 Apr 2024AY 2010-11

Bench: Shri Vikas Awasthy & Shri Gagan Goyalआ.अ.सं.1622/मुं/2015 (नि.व. 2010-11)

For Appellant: Shri Nitesh Joshi, AdvocateFor Respondent: Shri Rignesh Das, Sr. DR

Section 144C(1)Section 234BSection 32Section 40

Dlf Urban Pvt Ltd, New Delhi vs. ACIT, Circle, 7(1), New Delhi

ITA 1962/DEL/2022[2016-17]Status: DisposedITAT Delhi08 Apr 2024AY 2016-17

Bench: Shri Shamim Yahya & Shri Anubhav Sharmaassessment Year: 2016-17 Dcit, Vs Dlf Urban Pvt. Ltd., Circle 7(1), 15, Shivaji Marg, New Delhi. New Delhi – 110 015 Pan: Aafcd3019C Assessment Year: 2016-17 Dlf Urban Pvt. Ltd., Vs. Dcit, 15, Shivaji Marg, Circle 7(1), New Delhi – 110 015 New Delhi. Pan: Aafcd3019C (Appellants) (Respondents) Assessee By : Shri R.S. Singhvi, Shri Satyajeet Goel & Shri Rajat Garg, Cas. Revenue By : Shri Rajesh Kumar, Cit, Dr Date Of Hearing : 23.02.2024 Date Of Pronouncement : 08.04.2024 Order Per Anubhav Sharma, Jm: These Are Cross Appeals Preferred By The Assessee & The Revenue Against The Order Dated 30.06.2022 Of The Commissioner Of Income-Tax

For Appellant: Shri R.S. SinghviFor Respondent: Shri Rajesh Kumar, CIT, DR

Section 143(3)Section 92BSection 92C

subsequently revised on 30.11.2016 at a loss of Rs.90,47,202/-. The case was taken up for scrutiny and in view of reported international transactions and “specified domestic transactions” with the AEs, and the case was referred to the Transfer Pricing Officer (TPO) for determination of arm’s length price

Crm Services India Private Limited, New Delhi vs. DCIT, Circle-4(2), New Delhi

The appeals of the assessee are allowed with consequential effect

ITA 1519/DEL/2022[2010-11]Status: DisposedITAT Delhi08 Apr 2024AY 2010-11

Bench: Shri Shamim Yahya & Shri Anubhav Sharma

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri Rajesh Kumar, CIT-DR

Section 254

appellant on controlled transactions, i.e., 18.05%is higher than the average of operating profit margin in respect of comparable companies, i.e., 3.71%, the international transactions of payment of royalty entered into by it are considered being at arm’s length. 9. It comes up that earlier in the first round ... royalty and held that since no recognizable benefit has been received by the appellant from such payment, the arm’s length price of the international transaction of payment of royalty shall be taken to be at NIL and TPO made disallowance of entire payment of Royalty of Rs.1

Crm Services India Private Limited, New Delhi vs. DCIT, Circle-4(2), New Delhi

The appeals of the assessee are allowed with consequential effect

ITA 1518/DEL/2022[2009-10]Status: DisposedITAT Delhi08 Apr 2024AY 2009-10

Bench: Shri Shamim Yahya & Shri Anubhav Sharma

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri Rajesh Kumar, CIT-DR

Section 254

Ge Healthcare Finland Oy(Formerly Known As Instrumentarium Corporation Ltd, Bangalore vs. Dy. Director of Income Tax (International Taxation -1(1), Kolkata

In the result, all the two appeals of the assessee are allowed in part

ITA 311/KOL/2021[2007-08]Status: DisposedITAT Kolkata05 Apr 2024AY 2007-08

Bench: Shri Rajpal Yadav, Vice- & Shri Girish Agrawal]

Section 144Section 148Section 234ASection 250Section 9Section 92Section 92C

extent of 23.66% (33.66%-10%). 4. Without prejudice, the CIT(A) erred in upholding the action of the AO in benchmarking the alleged international transaction of interest payable on loan on the basis of prime lending rate of SBI as opposed to 3 I.T.A. Nos.310&311/Kol/2021 Assessment Years ... mentioned case at para 10 & 11 has observed: “10. Therefore, it is clear that the transaction of loan given to the AE is an international transaction and subjected to ALP as per the transfer pricing provisions of Income Tax Act. The assessee has raised an alternative plea that even

Ge Healthcare Finland Oy(Formerly Known As Instrumentarium Corporation Ltd, Bangalore vs. Dy. Director of Income Tax (International Taxation -1(1), Kolkata

In the result, all the two appeals of the assessee are allowed in part

ITA 310/KOL/2021[2005-06]Status: DisposedITAT Kolkata05 Apr 2024AY 2005-06

Bench: Shri Rajpal Yadav, Vice- & Shri Girish Agrawal]

Section 144Section 148Section 234ASection 250Section 9Section 92Section 92C