https://www.taxtmi.com/caselaws?id=409496 In determining the arm's length price of royalty in an international transaction, the Transfer Pricing Officer's role is confined to Chapter X of the Income-tax Act, 1961 and the prescribed rules. The Officer cannot substitute a nil value by applying a benefit test or by examining commercial expediency, allowability, or deductibility under Section 37, because those considerations fall outside transfer pricing analysis. Where the assessee benchmarked the transaction at entity level under the transactional net margin method and that approach was accepted, a nil royalty adjustment was impermissible. The issue was therefore resolved in favour of the assessee. en-us Tue, 29 Jun 2021 00:00:00 +0530 Thu, 08 Jul 2021 10:16:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=409496 In determining the arm's length price of royalty in an international transaction, the Transfer Pricing Officer's role is confined to Chapter X of the Income-tax Act, 1961 and the prescribed rules. The Officer cannot substitute a nil value by applying a benefit test or by examining commercial expediency, allowability, or deductibility under Section 37, because those considerations fall outside transfer pricing analysis. Where the assessee benchmarked the transaction at entity level under the transactional net margin method and that approach was accepted, a nil royalty adjustment was impermissible. The issue was therefore resolved in favour of the assessee. Case-Laws Income Tax Tue, 29 Jun 2021 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=409496