M/s. PAR Formulations Pvt. Ltd. Vs. The Dy. Commissioner of Income Tax, Corporate Circle-5(1), Chennai

Parties Involved

Facts Summary

The assessee, M/s. PAR Formulations Pvt. Ltd., earlier known as Edict Pharmaceuticals Pvt. Ltd., was acquired by PAR, USA on 17.05.2011 for a consideration of USD 32.5 Million (Rs.174.9 Cr.). Post-acquisition, the assessee transferred its intangible assets to PAR, USA for a consideration of USD 14.43 Million (Rs.97.3 Cr.). The assessee determined this consideration through an independent valuation report. During the assessment, the Assessing Officer (AO) referred the case to the Transfer Pricing Officer (TPO) to determine the Arm's Length Price (ALP) of the international transactions. The TPO rejected the assessee's method and made an upward adjustment of Rs. 49.29 Cr. to the consideration. The assessee filed objections before the Dispute Resolution Panel (DRP), which were rejected, leading to this appeal before the Tribunal.…

Legal Issues

• 1. Whether the transfer pricing adjustment of INR 49.29 crores is contrary to law, facts, and circumstances.
• 2. Whether the lower authorities erred in rejecting the independent valuation report.
• 3. Whether the lower authorities erred in disallowing the methodologies used by the independent valuer.
• 4. Whether the lower authorities erred in imputing an income of INR 16.99 crores based on a cost plus arrangement.

Judgment Outcome

Decided in favour of Assessee.

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