India: MAP resolution not binding for years not covered, particularly when PE functions had changed (tribunal decision)
Additional attribution of profits may be warranted when transfer pricing analysis does not fully reflect functions performed and risks assumed by PE.
The Delhi Bench of the Income-tax Appellate Tribunal held that a resolution under the mutual agreement procedure (MAP) was not binding for years not covered by the MAP, particularly when the functions performed by the taxpayer’s Indian dependent agent permanent establishment (PE) had changed.
Relying on the principle laid down by the Supreme Court in Morgan Stanley, the tribunal held that while arm's length remuneration to a PE generally eliminates the need for further profit attribution, additional attribution may still be warranted when the transfer pricing analysis does not fully reflect the functions performed and risks assumed by the Indian PE.
The case is: BBC Global News Limited v. DCIT (ITA No. 1847/Del/2025)
Read an August 2026 report prepared by the KPMG member firm in India