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1 - 5 of 5 (0.56 seconds)Assistant Commissioner Of Income-Tax, ... vs M/S. Johnson Matthey Chemicals India ... on 25 October, 2021
11. Further, this Tribunal in the case of INA Bearings India (P.) Ltd. (supra) by
placing reliance in the case of Johnson & Johnson Ltd. (supra) discussed in length
the provisions of section 92C(1) of the Act in its order at para 27 and held the
term shall used in the provision gives it a status of mandatory character and it
cannot be construed here as directory so as to empower the TPO to determine the
ALP of an international transaction in an arbitrary manner. The TPO has to
confine himself to one of the prescribed methods for determination of the ALP of
international transaction, for which mechanism has been prescribed in Rule 10B
of the Income-tax Rules, 1962. Further, it held the ALP of an international
transaction can be determined only by applying one of the prescribed methods
given under section 92C(1) of the Act and the ALP is determined by TPO by not
applying any method at all or by choosing a method which is not prescribed
u/s.92C(1) of the Act, then such a determination of ALP frustrates the transfer
pricing addition and deleted the transfer pricing addition made thereon by holding
the methods prescribed for determining the ALP are statutory prescription, it is
absolutely essential for the TPO to compute the ALP by adhering strictly to one of
such methods. Thus, adjustment made in Research and Development fees and
Management fees without following prescribed method under law is deleted.
Therefore, ground Nos. 1 to 2.5 raised by the assessee are allowed."
The Income Tax Act, 1961
Pr. Commissioner Of Income Tax 7 vs M/S Merck (India) Limited Formerly E ... on 9 January, 2019
10. Further, the Hon'ble High Court of Bombay in the case of Merck Ltd. (supra),
the Hon'ble High Court of Bombay was pleased to hold the entire transfer pricing
agreement becomes unsustainable in law in not adopting one of the mandatorily
prescribed methods to determine the ALP in respect of fees of technical services
payable by the assessee therein to its AE. The Hon'ble High Court of Bombay held
the view taken by the Tribunal in deleting the adjustment made by the TPO without
applying any of the method prescribed u/s. 92C to determine ALP is a possible
view.
Atharva Shelters Pvt Ltd And 2 Ors vs Union Bank Of India And 3 Ors on 28 October, 2015
29. The Hon'ble jurisdictional High Court in CIT (Large Tax Payer Unit) vs.
Johnson & Johnson Ltd. (2017) 247 Taxman 136 (Bom) vide its judgment dated
3rd April, 2017 has held that transfer pricing adjustment is refuted if the TPO
does not follow any of the prescribed method.
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