CASE LAWS

2016-TII-107-ITAT-DEL-TP

ACIT Vs BOSTON SCIENTIFIC INDIA PVT LTD: DELHI ITAT (Dated: March 1, 2016)

Income tax - Sections 92B, 92C & 271(1)(c).

Keywords - ALP - AE - distribution segment - issue given up - most appropriate method - marketing support service segment - multiple year data - penalty - RPM & TNMM.

Whether Explanation 7 to Section 271(1)(c) provides that when an ALP adjustment has been made u/s 92C(4), the amount so disallowed or added back is deemed to represent the income in respect of which particulars have been concealed or inaccurate particulars have been furnished - YES: ITAT

Whether the rigours of the penal action under the said Explanation would not be attracted, if the assessee can demonstrate that the price charged or paid in such transaction was computed in accordance with the provision contained u/s 92C in good faith and with due diligence - YES: ITAT

Whether the mere fact that the issue of penalty on the TP adjustment was given up per se, by itself will not be sufficient to conclude against the assessee - YES: ITAT

Whether the mere fact that certain comparables were excluded by the TPO, can erode the claim of exercise of due diligence and good faith in selection of comparables offered, unless the same was rebutted by the Revenue showing specific instances explicitly indicating malafide intention of assessee while selecting comparables - YES: ITAT

Whether mere change of method by the TPO for benchmarking the international transactions, is sufficient to hold concealment of income and invoke penalty u/s 271(1)(c) - NO: ITAT

Whether where it is evident that the issue of single year/multiple year data was debated till a specific A.Y, the TP study having been prepared using multiple year data in the said A.Y cannot be held to be a malafide exercise computed in gross carelessness in order to defraud the Revenue - YES: ITAT

Whether where there is a debate on the issue and two views are possible, the bonafide of an explanation in having followed one of the views cannot be a ground for levying penalty - YES: ITAT

Revenue's appeal dismissed

2016-TII-108-ITAT-DEL-TP

ITO Vs ADIDAS INDIA MARKETING PVT LTD: DELHI ITAT (Dated: February 26, 2016)

Income Tax - AE - ALP - CUP - slow moving old stock - TP adjustment - time gap.

Whether the TPO cannot compute the earning on slow moving goods or old stock, similar to that of new stock - YES: ITAT

Whether no adjustment can be made on account of sale of goods, when the TPO has not disputed that the said stock was old stock, also goods sold were exactly same, as the goods were dispatched from the warehouse of the assessee to the ultimate buyer and time gap between the sale of the assessee and the sale of the AE, was negligible - YES: ITAT

Revenue's appeal dismissed