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Tribunal rules services from Nalco US & Nalco Pacific as intra-group, not stewardship activities The Tribunal dismissed the Revenue's appeal against the CIT(A)'s decision for the assessment year 2010-11, holding that the services received by the ...
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Tribunal rules services from Nalco US & Nalco Pacific as intra-group, not stewardship activities
The Tribunal dismissed the Revenue's appeal against the CIT(A)'s decision for the assessment year 2010-11, holding that the services received by the assessee from Nalco US and Nalco Pacific were intra group services, not stewardship activities. The Tribunal upheld the CIT(A)'s order based on the previous year's decision, emphasizing that the dispute solely concerned the nature of services, not the Arm's Length Price determination. Consequently, the appeal was rejected, affirming that the services in question were intra group services.
Issues: Nature of services received by the assessee - whether intra group services or stewardship activity.
Analysis: The appeal by the Revenue was against the order passed by the CIT(A) for the assessment year 2010-11. The main ground raised by the Revenue was regarding the nature of services provided by Nalco US and Nalco Pacific to the assessee, whether they constituted intra group services or stewardship activity. The international transactions of receipt of services were reported by the assessee, and the AO referred the case to the TPO for determining the Arm's Length Price (ALP). The TPO concluded that the services were stewardship activities, resulting in a proposed transfer pricing adjustment. However, the CIT(A) held that the services were intra group services, leading to the deletion of the addition. The Tribunal noted that the issue was similar to the preceding assessment year, where a similar decision was made. As the dispute was solely about the nature of services, the Tribunal upheld the CIT(A)'s order based on the previous year's decision.
The Tribunal clarified that the Revenue's challenge was only regarding the nature of services determined by the CIT(A) and not the ALP determination of the international transaction. Ultimately, the appeal by the Revenue was dismissed, affirming the CIT(A)'s decision that the services received were intra group services and not stewardship activity. The judgment was pronounced in the Open Court on 30th September, 2021.
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