Can an international transaction applied at Transactional Net Margin Method be considered at arm's length?

Last updated: 07 August 2021

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This case concerns Hapag-Llyod India Private Limited and a transfer pricing adjustment of over Rs. 5.5 crore for the 2011-12 assessment year. The company used the Transactional Net Margin Method (TNMM) to benchmark its international transactions with associated enterprises. However, the Transfer Pricing Officer (TPO) disagreed, proposing to use a Comparable Uncontrolled Price (CUP) based on a previous agreement with another agency. The Tribunal directed the Assessing Officer to re-examine the company's benchmarking under TNMM.

Court :
ITAT Mumbai

Brief :
The assessee, a resident company, is engaged in the business of shipping agency. For the assessment year under dispute, assessee filed its return of income on 30.11.2011 declaring total income of Rs.4,58,57,900/-.

Citation :
ITA No. 6877/MUM/2019

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

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3 Years PLAN

4999

(Excl. of GST ₹899)

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Attached File : 1442821_4081_1627295997_ita_no_6877_hapag_llyod_india_pvt_ltd_corrected.pdf

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Poojitha Raam Vinay

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I simplify complex income tax, TDS, banking, and investment updates into practical insights for taxpayers, salaried professionals, pensioners, and senior citizens. I regularly write on ITR filing, tax compliance, savings schemes, and the latest financial rule changes in India.

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