Is there a necessity of payment of royalty in case the Indian Entity is an extended arm of the appellant company?


Quick Summary
The Income Tax Appellate Tribunal (ITAT) in Hyderabad addressed whether royalty payments are required when an Indian entity acts as an extended arm of a foreign parent company. The Tribunal reviewed adjustments made by the Transfer Pricing Officer (TPO) regarding royalty payments. Ultimately, the ITAT directed that a royalty of 4% of net sales should be allowed, following a previous decision in the assessee's own case for a different assessment year.

Court :
ITAT Hyderabad

Brief :
These two assessee’s appeals for A.Y. 2005-06 and 2010-11 arise against the CIT(A)-4 Hyderabad’s orders dated 24.3.2016 and 23.03.2016, passed in case nos.0349/2015-16 and 0108/15-16 involving proceedings u/s 143(3) rw.s. 92CA(3) of the Income Tax Act, 1961 [for short ‘the Act’]. Heard both the parties. Case files perused.

Citation :
ITA 826/HYD/2016

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Published in Income Tax
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