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.