Appeal allows marketing payments as deductible business expenses under Sec.37; director pay retained; R&D deductible from certificate date under Sec.3...
Registration under s.12AB upheld; CIT(Exemptions) exceeded jurisdiction by deciding taxability instead of preliminary verification and registration di...
The ITAT held that the revenue authority's transfer pricing segmentation and revenue-based cost allocation were unsustainable. The Tribunal found the taxpayer's core trading activities and attendant after-sales services to be functionally integrated and interdependent, with many services performed with assistance of its associated enterprise (foreign principal), and therefore incapable of reliable segregation for separate benchmarking. The TPO's unilateral bifurcation and allocation by gross revenue, without analysing functions, risks and manpower, was quashed. Consequently the TP adjustment on ground No. 3 was disallowed and the taxpayer's appeal allowed, with directions that no revenue-based segmental allocation be applied absent a proper functional and risk analysis.
The ITAT held that the revenue authority's transfer pricing segmentation and revenue-based cost allocation were unsustainable. The Tribunal found the taxpayer's core trading activities and attendant after-sales services to be functionally integrated and interdependent, with many services performed with assistance of its associated enterprise (foreign principal), and therefore incapable of reliable segregation for separate benchmarking. The TPO's unilateral bifurcation and allocation by gross revenue, without analysing functions, risks and manpower, was quashed. Consequently the TP adjustment on ground No. 3 was disallowed and the taxpayer's appeal allowed, with directions that no revenue-based segmental allocation be applied absent a proper functional and risk analysis.
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