Under CUP method, a quotation which hasn't fructified into a transaction can’t be used for benchmarking
The Tribunal held as under:
1) When the statute read with rules specifically provides that the ALP under the CUP method should be determined by considering 'the price charged or paid' in a comparable uncontrolled 'transaction', one fails to comprehend as to how any 'quotation' which has not fructified into a 'transaction' can be substituted with the actual price charged or paid in a transaction;
2) As the law provides for considering the price charged or paid in a comparable uncontrolled transaction, there can be no scope for considering a quotation price in isolation which is not preceded with or succeeded by any actual transaction - Sinosteel India (P.) Ltd. Dy. CIT [2013] 40 taxmann.com 240 (Delhi - Trib.)
The Tribunal held as under:
1) When the statute read with rules specifically provides that the ALP under the CUP method should be determined by considering 'the price charged or paid' in a comparable uncontrolled 'transaction', one fails to comprehend as to how any 'quotation' which has not fructified into a 'transaction' can be substituted with the actual price charged or paid in a transaction;
2) As the law provides for considering the price charged or paid in a comparable uncontrolled transaction, there can be no scope for considering a quotation price in isolation which is not preceded with or succeeded by any actual transaction - Sinosteel India (P.) Ltd. Dy. CIT [2013] 40 taxmann.com 240 (Delhi - Trib.)
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