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Recent Court and Tribunal rulings in India

10 Sep 2014

The summer months have seen various Court rulings in India involving multinational comapnies. Taxand India takes a look at notable cases' rulings from Delhi, Kolkata and Mumbai. 

Mitsubishi Corporation India Pvt Ltd (ITA No. 322/2014) – Delhi High Court
The High Court upheld the previous Appellate Court order that as Mitsubishi is engaged in trading activity it cannot be treated as a service provider.

Datex Ohmeda (I) Private Limited (ITA No 1848/Kol/2012) – Kolkata Tribunal
During the course of a transfer pricing audit the Transfer Pricing Officer (TPO) used data from databases. Based on this data, the TPO made a transfer pricing addition to the value of an international transaction. Private Limited raised an appeal with the Dispute Resolution Panel (DRP) on the grounds that the TPO should consider the audited finanicals of comparable companies. The Appellate Tribunal noted that neither the Assesing Officer (AO) nor the TPO had followed the directive issued by the DRP.

Boskalis International-Dredging International CV (ITA No 4862/Mum/2008) – Mumbai Tribunal
The case considered whether lease hiring of equipment can be benchmarked on an aggregate basis or on a standalone basis. The Appellate Tribunal was of the view that since the equipment was hired from various Associated Enterprises (AEs), the portfolio approach could be adopted. The Appellate Tribunal remanded the matter back to the Transfer Pricing Office to determine the transfer pricing adjustment.

Discover more: Delhi High Court rules on applicabilty of indirect transfer provisions

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Taxand's Take

Multinationals and national corporations should keep afresh of all legislative changes in India in order to remain knowledgable of the tax environment and to adjust procedures where required.

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Mukesh Butani
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Taxand and IBFD Global Guide to Transfer Pricing 2014

Taxand and IBFD Global Guide to Transfer Pricing 2014

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