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February 2025

Section 92, 92A, and 92B(2) – Whether transaction between the foreign Head Office (HO) and its Project Office (PO) in India is subject to transfer pricing provisions.

By Geeta Jani | Dhishat B Mehta | K. Prasanna, Chartered Accountants
Reading Time 5 mins

12. TBEA Shenyang Transformer Group Company Limited vs. DCIT (International Taxation)

[2024] 169 taxmann.com 145 (SB)

ITA No: 581 (Ahd.) of 2017

A.Y.: 2012-13

Dated: 11th November, 2024

Section 92, 92A, and 92B(2) – Whether transaction between the foreign Head Office (HO) and its Project Office (PO) in India is subject to transfer pricing provisions.

FACTS

The Assessee, a tax resident of the Republic of China, obtained a contract for offshore and onshore supply and services via separate agreements. A PO was formed in India to carry out onshore supply and service. A portion of onshore services had been subcontracted to third parties. The HO in China had received and also made payments on behalf of the PO due to the non-availability of a bank account in India at the relevant time.

The AO treated the transaction as reimbursement and referred it to the TPO for ALP determination. The TPO found that the rates received from PGCIL (contractor) for civil work were lower than those paid to subcontractors, suggesting that the PO was n

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