In Brief
Honda Motor Co. Ltd and related entities challenged reassessment notices issued by the Assistant Director of Income Tax based solely on allegations of permanent establishment in India. The Supreme Court held that once transfer pricing complies with the arm's length principle, no further profit can be attributed to a person even if it maintains a permanent establishment in India. The Court set aside the reassessment notices and allowed the appeals, holding that merely alleging permanent establishment cannot sustain a reassessment after proper arm's length pricing has been followed.
The lawyer headnote and full judgment text are available to registered users.