ITA No. 6949/Del/2018

Parties Involved

Facts Summary

The assessee, Kamla Dials & Devices Limited (KDDL), is a company engaged in the manufacturing of precision parts for wristwatches. For the assessment year 2012-13, KDDL filed its return of income declaring an income of Rs. 13,07,87,930/-. The assessment was completed at an income of Rs. 14,87,43,501/-, after making a transfer pricing addition on account of payment of export commission of Rs. 2.18 crores. The assessee appealed against the assessment order, and the Commissioner of Income Tax (Appeals) upheld the assessment order. The Revenue filed an appeal against the order of the Commissioner of Income Tax (Appeals), which was dismissed by the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the Commissioner of Income Tax (Appeals) was right in rejecting the CUP as the most appropriate method by the TPO.
• 2. Whether the Commissioner of Income Tax (Appeals) was right in deleting the adjustment made on account of Arm’s Length Price of commission payment to the AE.
• 3. Whether the Commissioner of Income Tax (Appeals) was right in not appreciating the fact that no documentary evidence was brought on record to support the claim that the AE, Taratec SA had performed any activity/ work for which it was entitled to payment of commission.

Judgment Outcome

Decided in favour of Revenue.

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