India v. Kellogg India
India v. Kellogg India
Jurisdiction
India, Income Tax Appellate Tribunal (ITAT)
Summary of Facts
The ITAT ruled in favor of Kellogg India, which had used the AE as the tested party for benchmarking the import of Pringles products, despite the tax authorities’ preference for the Indian entity as the tested party.
Key Issues
The appropriateness of the transactional net margin method (TNMM) versus using the Indian entity as the tested party.
Decision and Reasoning
The ITAT concluded that the AE should be the tested party, aligning with Kellogg India’s approach and ruling that no adjustment to the arm’s length price was needed.
Importance and Implications
This decision supports the use of appropriate transfer pricing methods and the importance of selecting the correct tested party in benchmarking analyses.
