Co-operative society's mandatory reserve and share capital fixed deposits with banks-interest treated as business income under 80P(2)(a)(iii) deductio...
Income tax reassessment reopening after four years on investigation tip, without s.147 proviso disclosure failure, struck down as borrowed satisfactio...
The dominant issue was whether the arm's-length price of intra-group management service fees could be determined at Nil and whether the "Other Method" was the appropriate MAM. The assessee's cost-based benchmarking using internal mark-up policy (5% for support and 10% for managerial/technical services) was held consistent with OECD principles for low value-adding services and supported by contemporaneous documentation and cost allocation workings; consequently, Nil ALP could not be inferred merely by alleging no benefit or services. The corroborative TNMM, with the assessee's net cost-plus margin within the interquartile range of comparables, further validated arm's-length conditions. The Nil ALP adjustment was deleted, with a direction to verify the benchmarking in the TPSR applying "Other Method" as primary. - ITAT
The dominant issue was whether the arm's-length price of intra-group management service fees could be determined at Nil and whether the "Other Method" was the appropriate MAM. The assessee's cost-based benchmarking using internal mark-up policy (5% for support and 10% for managerial/technical services) was held consistent with OECD principles for low value-adding services and supported by contemporaneous documentation and cost allocation workings; consequently, Nil ALP could not be inferred merely by alleging no benefit or services. The corroborative TNMM, with the assessee's net cost-plus margin within the interquartile range of comparables, further validated arm's-length conditions. The Nil ALP adjustment was deleted, with a direction to verify the benchmarking in the TPSR applying "Other Method" as primary. - ITAT
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