• Service: Tax, Global Transfer Pricing Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 6/5/2014

India - Amended return, missing transfer pricing documentation held valid 

June 5: The Hyderabad Bench of the Income-tax Appellate Tribunal accepted, as valid, an amended return and transfer pricing documentation filed by the taxpayer and reporting a transfer pricing adjustment. The tax authorities could not ignore the amended return filed with the missing transfer pricing information, the tribunal concluded. Tecumseh Products India P. Ltd. v. ACIT (ITA No.2228/Hyd/2011)

The tribunal also addressed other transfer pricing issues in the case.


The taxpayer—involved in the manufacture, marketing, and service and repair of hermetically sealed compressors—entered into an international transaction, by agreeing to export certain components and assembly kits from its export-oriented manufacturing unit to a related party in the United States. The taxpayer also provided software services to another related party.

On its income tax returns for the years at issue, the taxpayer reported losses and/or zero income.

The taxpayer subsequently filed an amended return along with transfer pricing documentation and made a transfer pricing adjustment that, in turn, reduced the amount of the reported loss.

On referral, the Transfer Pricing Officer made transfer pricing adjustments, without considering the amended return. These adjustments were accepted by the Assessing Officer.

The tribunal, however, determined that the original return filed by the taxpayer could not be considered to be a valid return because it did not contain the statutorily prescribed transfer pricing documentation or the value of the international transactions.

The tribunal found that the amended return provide the required transfer pricing documentation and also declared a higher value for the international transactions. Accordingly, the tribunal concluded that the Transfer Pricing Officer could not ignore the transfer pricing adjustment reported in the amended return.

Read a June 2014 report [PDF 428 KB] prepared by the KPMG member firm in India: The Hyderabad Tribunal accepts revised return making suo moto adjustment as valid; however, denied the plus/minus five per cent benefit on the adjusted ALP

Contact a tax professional with KPMG's Global Transfer Pricing Services.

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