9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (8) TMI 324 - AT - Income TaxTP adjustment - enhancing the income of the assessee by relying on the data collected from custom authorities by rejecting the comparable uncontrolled price ( CUP) analysis undertaken by the assessee - assessee contended that as no import or export duty was payable on these commodities, the data provided by the Customs Department thereon pertains to the invoice values of the commodities as and when declared by various taxpayers vide Shipping Bill/ Bill of Entry - HELD THAT - We do not agree with the above contention of the Ld. Counsel for the assessee, even where no tariff rate is notified as in the case of sugar, cotton, meals and grains, the transaction values of customs data can be relied upon as it is based on transaction of similar nature and items on the same date at the same port. The issue of related party transactions in customs data would equally apply to any other public data as well. In the absence of complete details of the differences arising out of contract terms and product quality, the customs data being Govt, notified would provide a reasonable basis for arriving at the uncontrolled transaction price. The Co-ordinate bench of the Tribunal in the case of M/s Sinosteel India Pvt. Ltd. Vs. DCIT (I.T.A No.-175/Del/2012), Hon ble ITAT, Delhi has held that bare quotation price cannot be accepted under the CUP method for the purposes of benchmarking under Rule lQBA(1)(a) of the IT Rules, 1962. Thus we are of the opinion that the objections of the assessee against the use of customs data under CUP had been rightly rejected by the Authorities. Further we do not find any error or infirmity in the direction given by the DRP. Decided against Assessee.
Issues Involved:
1. Enhancement of income by Rs. 18,57,18,810 based on Transfer Pricing adjustments. 2. Rejection of Comparable Uncontrolled Price (CUP) analysis by the assessee. 3. Comparison of international transaction prices using data from Custom Authorities. 4. Delay in filing the appeal due to Covid-19. Summary of Judgment: Issue 1: Enhancement of Income by Rs. 18,57,18,810 The Transfer Pricing Officer (TPO), following directions from the Dispute Resolution Panel (DRP), enhanced the income of the appellant by Rs. 18,57,18,810. The TPO held that the international transactions related to import/export of agri-commodities with Associated Enterprises (AEs) did not satisfy the Arm's Length Principle (ALP) as per the Income-tax Act, 1961. Issue 2: Rejection of Comparable Uncontrolled Price (CUP) Analysis The TPO rejected the CUP analysis undertaken by the appellant, which was based on industry reports and independent broker quotes. The TPO instead used data collected from Custom Authorities, emphasizing the reliability of customs data over broker quotes. The DRP upheld the TPO's findings, directing the TPO to compute the arm's length price as per the provisions of the Act. Issue 3: Comparison Using Custom Authorities Data The TPO compared prices of international transactions using data from Custom Authorities, considering factors such as transaction value, tariff value, and shipment date. The Tribunal found that customs data, which includes various costs and adjustments, provides a more reliable CUP compared to industry reports or broker quotes. The Tribunal cited several precedents supporting the reliability of customs data for transfer pricing purposes. Issue 4: Delay in Filing the Appeal The appeal was delayed due to Covid-19 situations. The Tribunal condoned the delay, referencing the Supreme Court's judgment dated 27th April 2021 in Miscellaneous Application No. 665/2021. Conclusion: The Tribunal dismissed the appeal, agreeing with the TPO and DRP that customs data is a more reliable source for determining the arm's length price under the CUP method. The Tribunal found no error or infirmity in the DRP's directions and upheld the enhancement of income by Rs. 18,57,18,810.
|
