In the Case of Ranbaxy Laboratories Limited Tribunal Judgement upheld the decision and contended that no transfer pricing adjustment if the parties earn gross-margin within arm‟s length level as determined through the foreign benchmarking exercise after a flexible allowance of 5% from arithmetic allowance was provided.
Another case of Ranbaxy Laboratories Limited was brought before the Commissioner of Income Tax wherein the taxpayer exported goods and services to its associated enterprise (AE).The prices were determined at arm‟s length price using the TNMM with the profit level indicator (PLI) of Operating Margin on sales. The dispute arose on the ground that the determination of ALP was not referred by the Assessing Officer to the Transfer Pricing Officer as was instructed under CBDT (Central Board of Direct Taxes). The tribunal upheld the decision and contended that no transfer pricing adjustment if the parties earn gross-margin within arm‟s length level as determined through the foreign benchmarking exercise after a flexible allowance of 5% from arithmetic allowance was provided.
Another case of Ranbaxy Laboratories Limited was brought before the Commissioner of Income Tax wherein the taxpayer exported goods and services to its associated enterprise (AE).The prices were determined at arm‟s length price using the TNMM with the profit level indicator (PLI) of Operating Margin on sales. The dispute arose on the ground that the determination of ALP was not referred by the Assessing Officer to the Transfer Pricing Officer as was instructed under CBDT (Central Board of Direct Taxes). The tribunal upheld the decision and contended that no transfer pricing adjustment if the parties earn gross-margin within arm‟s length level as determined through the foreign benchmarking exercise after a flexible allowance of 5% from arithmetic allowance was provided.
