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ALP of consideration paid towards brand license couldn’t be taken as nil if such sum was subjected to RBI approvals

February 5, 2020[2020] 113 taxmann.com 512 (Mumbai - Trib.)
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TRANSFER PRICING: Where assessee, engaged as a sub-agent in business of providing services for distribution of channels to Star Ltd., paid certain amount as brand fee for brand name and design of channels featuring Star marks and Star Corporate mark, in view of fact that said fee had been approved by RBI, ITO was not justified in determining ALP of said payment at nil

TRANSFER PRICING: Where assessee, engaged as a sub-agent in business of providing services for distribution of channels to Star Ltd., paid certain management fee to its group concern, in view of fact that management fee had been allocated to each channel companies in proportion of revenues generated by individual channel companies to consolidated revenues of all channel companies taken together, ALP of fee so paid could not be regarded as nil

TRANSFER PRICING: Where assessee was rendering support services to its AE in connection with distribution of channels in India, a company engaged in providing high end consultancy/project related services in nature of project identification, project counseling, pre-feasibility reports, detailed project feasibility reports, infrastructure planning, market assessment, etc. could not be accepted as comparable

TRANSFER PRICING: In case of assessee rendering support services to its AE in connection with distribution of channels in India, a company providing share registry and transfer services, depository services, record management, payroll and provident fund management and corporate fixed deposit management services, was not acceptable as comparable

TRANSFER PRICING: Where assessee was rendering support services to its AE in connection with distribution of channels in India, a company which had earned operating profits in year under consideration in one out of three preceding previous years could not be regarded as persistent loss making company and thus it company could not be excluded from list of comparables on aforesaid ground

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