DIC India Ltd. Vs. DCIT, Circle-11(1), Kolkata

Parties Involved

Facts Summary

The appeal filed by DIC India Ltd. is against the order of the Assessing Officer, Assessment Unit, Income Tax Department dated 26.07.2024 for AY 2020-21 passed under section 143(3) read with section 144C(13) r.w.s. 144B of the Income Tax Act, 1961. The primary issues involved are the transfer pricing adjustment of Rs.99,95,076/- and the disallowance of club expenses of Rs.3,73,864/-. DIC India Ltd. is engaged in the business of manufacture and trading of printing inks and allied products. The company had obtained corporate membership of clubs for its Directors, managerial personnel, and senior employees to interact with customers and other stakeholders. The Assessing Officer had disallowed the club expenses under section 37(1) of the Act. Regarding transfer pricing, the assessee had applied the Transactional Net Margin Method (TNMM) using segmental accounts, which the Assessing Officer rejected in favor of entity-level accounts.…

Legal Issues

• 1. Disallowance of club expenses of Rs.3,73,864/-
• 2. Transfer pricing adjustment using Transactional Net Margin Method (TNMM) with segmental accounts
• 3. Selection of comparables for transfer pricing

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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