Friday, January 16, 2015

Sales to Overseas AE not Comparable with Sales to Domestic Independent Enterprises

The Delhi ITAT has held that the Arm's Length Price (ALP) of international transactions with the
Associated Enterprises (AEs) was to be determined on the basis of Transactional Net Margin Method
(TNMM) and the impugned ALP adjustments on the basis of Comparable Profit Method (CPM) held vacated. It further observed that, sales to an overseas AE without any cost being incurred on marketing and sales promotion are not comparable with sales to domestic independent enterprises with full responsibilities for marketing and sales promotion.


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