Royalty Benchmarking - assessee had adopted TNMM at the entity ...

Assessee uses TNMM, treating royalty payments as operating costs; TPO should use net sales for fair comparison.

September 1, 2021

Case Laws Income Tax AT

Royalty Benchmarking - assessee had adopted TNMM at the entity level in which process royalty payment is considered as closely linked transaction and part of operating cost - once the net profit margin is tested on touchstone of arm's length price, it pre-supposes that the various components of income and expenditure considered in the process of arriving at the net profit are also at arm's length. - TPO has to follow a consistent approach and adopt net sales as denominator for the purpose of comparable royalty in the case of comparables and the assessee. - AT

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Royalty Benchmarking - assessee had adopted TNMM at the entity ...

Assessee uses TNMM, treating royalty payments as operating costs; TPO should use net sales for fair comparison.

September 1, 2021

Case Laws Income Tax AT

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