Delhi Tribunal estopped Assessing Officer to assume
Transfer Pricing Officer's power; Held that the arm's
length price determined by the TPO cannot be disregarded by the
AO
Facts of the Case
YKK India Private Limited ["the taxpayer"] is engaged
in the business of manufacturing zippers and fasteners.
During assessment year ["AY"] 2003-04, the taxpayer had
made the following payments to its Associated Enterprises
["AEs"]:
- Payment to royalty to YKK corporation Japan under a
collaboration agreement; and
- Payment of technical fees to YKK Holdings Asia Pte Ltd
["YKK Asia"].
During the course of assessment proceedings, the Assessing
Officer ["the AO"] objected the payment of technical fees
to AE and held that since the taxpayer has already paid royalty to
its AE, there is no need of such separate payment of technical
fees. On the contrary, the taxpayer submitted that YKK Asia
is a support centre for 'production planning and
implementation' and the services
