How outsourcing manufacturing can lead to a transfer pricing adjustment
October 04, 2011
Gagan Kumar of Archer & Angel explains the intricacies of the Diageo India case.
The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has delivered an interesting judgement in the case of Diageo India Private Limited vs Deputy Commissioner of Income Tax (ITA No. 8602/Mum/2010).
Apart from the various issues in the said appeal, one tantalising question was on the treatment of purchases made by otherwise unrelated parties (Diageo’s contract bottling unit (CBU)) from the related parties of the taxpayer (Diageo India).
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