ITAT comments on level of professionalism by Chartered Accountants as "pathetic"

Last updated: 17 January 2015

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Court :
ITAT Delhi

Brief :
One common issue in all the assessment years is the challenge to the correctness of ALP adjustment made to the billing for contract manufacturing by the assessee, to its associated enterprises based abroad. The question is whether CPM, with entrepreneurship profits derived from manufacturing and selling its products in India as the benchmark,would indeed be most appropriate method of determining the ALP.Held that the authorities below were not justified in holding that the CPM was the most appropriate method.The TP reports and certifications bythe chartered accounts inspire no confidence and raise doubts about efficacy of the built in checks and balances in transfer pricing regulations. It is somewhat fashionable to criticize the revenue authorities for their lack of objectivity or even inefficiency but what in the world can justify such a pathetic level of professional work relied upon by even the large corporate entities. If the tax judicial system is clogged by frivolous litigation today and if the tax finality still takes decades to reach, these saviours of taxpayers are as much to be blamed for this situation as anybody else.

Citation :
Wrigley India Pvt Ltd – Appellant – Versus – Assistanct commissioner of Income Tax – Respondent

Daily Limit Reached