Section 92C of the Income Tax Act, 1961- Transfer Pricing - Computation of arms length price - Transaction of payment of shared service charges cannot be aggregated with the international transactions concerned with the manufacturing activity.

Facts: The moot question is whether the transaction of payment of shared service charges on one hand and Import of raw material and export of finished goods on the other, namely, the manufacturing activity, can be construed as ‘closely linked transactions’ ?

Held. that closely linked transactions mean similar or alike transactions of purchase or sale etc. of goods or services. To put it simply, if there are several international transactions of, say, purchase of similar goods or with minor variations, then instead of finding the ALP of such international transactions separately, if these are combined and benchmarked in an aggregate manner, it satisfies the prescription of closely linked transactions. The instant transaction of payment of shared service charges cannot be aggregated with the international transactions concerned with the manufacturing activity, thus, we reject the aggregation approach as put forth on behalf of the assessee and ex consequenti, the additional ground is hereby dismissed. - KNORR BREMSE SYSTEMS FOR COMMERCIAL VEHICLES INDIA (P) LTD. V/s DEPUTY CIT - [2020] 205 TTJ 736 (ITAT-PUNE)