Case Law Analysis
|Income Tax Appellate Tribunal
Transfer Pricing | Arm's Length Pricing Precludes Further Profit Attribution to Permanent Establishment: ITAT Delhi
The ITAT Delhi has ruled that once transfer pricing adjustments establish arm's length pricing for transactions with an associated enterprise, no additional profits can be attributed to a permanent establishment in India. This reinforces the principle that PE profit allocation must flow from the actual economic activity and pricing, not from speculative or artificial reallocations - a critical safeguard for multinational enterprises operating under DTAAs and the MLI.