Welcome, Guest | Sign In

15. TS-896-ITAT-2016(Rjt)-TP WocoMotherson Advanced Rubber Technologies Limited vs. DCIT A.Y.s: 2006-07 to 2011-12, Dated: 29th September, 2016

Chartered Accountants

Section 92CA of the Act - Provision for technical assistance does not essentially require the technology to be owned by the service provider for use of technology – AO has to examine as to how much is the arm’s length consideration for such services - high tax jurisdiction or low tax jurisdiction is not relevant for the purpose of determination of arm’s length price – where group is able to reduce tax burden by locating their units is not a relevant factor under Indian Transfer pricing provisions


The taxpayer, an Indian entity, was engaged in manufacture of high quality rubber parts, rubber plastic parts, rubber metal parts and liquid silicon rubber parts. The Taxpayer had entered into international transactions with its Associated Enterprises (AEs) (FCo1 in Sharjah and FCo2 in Germany). FCo2 had granted non-exclusive licence to the Taxpayer to manufacture, use, exercise or sell the licensed products at NIL royalty. FCo1 was to provide technical assistance services in relation to the licensed products. The Taxpayer made payments to FCo1 in relation to the technical services.