#international transaction

ITAT Kolkata has ruled that domestic advertisement, marketing, and promotion expenses incurred solely for the assessee’s own business, without any agreement or service rendered to associated enterprises, do not qualify as international transactions under Section 92B. This clears the way for companies to claim such expenditures without forced markup adjustments, reinforcing the principle that transfer pricing rules apply only to cross-border dealings with tangible or intangible service transfers.

ITAT Ahmedabad rules that once working capital adjustment is granted under the Transactional Net Margin Method (TNMM), imputing additional notional interest on delayed receivables constitutes double adjustment and is legally unsustainable. The decision reinforces that receivables are integral to primary transactions and cannot be re-characterized as loan financing for tax purposes.

ITAT Bangalore mandates turnover-based filters and netting of receivables/payables with the same Associated Enterprise (AE) in transfer pricing comparability analysis. The ruling reinforces the arm’s length principle by preventing artificial adjustments, impacting multinational enterprises and tax professionals in benchmarking international transactions.

ITAT Bangalore ruled that delayed trade receivables from associated enterprises constitute an international transaction under Section 92B, warranting notional interest adjustment. However, it reduced the applicable rate from LIBOR+450 to LIBOR+200 basis points, setting a precedent for transfer pricing disputes involving deferred payments.