1. A Useful Presentation on “Budget 2011-2012 (Direct Taxation)”
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2. [Contribution by CA. Rajat Mohan, and contributor is available on Mobile No. 9910044223 / email-id: rajat.mohan@icai.org ]
Service Tax Amendments presentation – Series 3 – Presentation of notifications on Service Tax in pursuance of Finance Bill, 2011.
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3. M/S CLEAR PLUS INDIA PVT. LTD., VS. DY. C.I.T., I.T.A. NO.3944/D/2010, PRONOUNCED IN OPEN COURT ON 11.02.2011., INCOME TAX APPELLATE TRIBUNAL - DELHI
The TPO adopted the transactional net margin method and directed that an adjustment be made by adopting the mean profit of comparables. This was confirmed by the DRP. On appeal, HELD:
(i) U/s 92C read with Rule 10B, the most appropriate method has to be applied for determination of arm’s length price. In principle, the CUP method (the traditional transaction method) is preferable to the other methods because all other things being equal, the CUP and traditional transactional methods lead to more reliable results vis-a-vis the results obtained by applying transaction profit method (UCB India 121 ITD 131 and Serdia Pharmaceuticals followed);
(ii) For the CUP method, the focus is on the market in which the products are sold by the assessee and any unique feature of the market in which assessee is situated is of no importance in relative terms. As the goods were sold by the assessee as well as the competitive Chinese manufacturers in the USA market, the market conditions in the territory of sale were the same. The buyer in the USA market will be more concerned with quality and price rather than economic conditions prevailing in China and India (SNF (Australia) Pty. Ltd. Vs. COT (2010) FCA 635 referred to);
(iii) As regards the comparability of the products the assessee has to provide the sale data of the AE in terms of sale price of Chinese and assessee’s goods in the USA market and quantitative data of purchase of Chinese and Indian wipers by the AE and the terms of payment and the AO shall compute the arm’s length price using this data on CUP method.
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