2019 (2) TMI 2067 - AT - Income Tax

Tribunal overturns Transfer Pricing Adjustment, remits for fresh consideration. Leave Encashment addition dismissed.

The Tribunal set aside the Transfer Pricing Adjustment made by the Assessing Officer and remitted the matter back for fresh consideration based on the ... TP Adjustment - TPO that in determining the ALP at NIL of the International Transaction of 'Receipt of Advisory and other services’ - Selection of MAM - HELD THAT:- Vide order Tribunal [2018 (6) TMI 1565 - ITAT PUNE] has held the TNMM to be the most appropriate method in preference to the CUP applied by the TPO. After giving certain directions, the matter has been sent back to the AO/TPO for deciding the issue accordingly. In reaching this conclusion, Tribunal relied on its own order for the A.Ys. 2009-10 and 2010-11 in which similar view was canvassed. Copies of all such orders of the Tribunal, right from the A.Ys. 2009-10 to 2013-14, have been placed on record in which similar view has been taken. DR fairly conceded that the facts and circumstances of the instant appeal are mutatis mutandis similar to those of earlier years. Respectfully following the precedent, we set aside the impugned order and remit the matter to the file of AO/TPO for deciding this issue afresh in accordance with the directions given by the Tribunal in assessee’s own case for the earlier assessment years. Needless to say, the assessee will be provided adequate opportunity of hearing in such fresh proceedings. Issues:1. Transfer Pricing Adjustment2. Addition of Leave EncashmentTransfer Pricing Adjustment:The appeal was against the final assessment order for the assessment year 2014-15, where the Assessing Officer (AO) made an addition of Rs.13,74,20,445 on account of Transfer Pricing Adjustment. The assessee, a joint venture company, filed its return declaring total income, including certain international transactions. The Transfer Pricing Officer (TPO) determined the Arm's Length Price (ALP) using the Comparable Uncontrolled Price (CUP) method, resulting in a NIL ALP for the transaction of 'Payment of fees for Advisory and other services.' The Dispute Resolution Panel (DRP) upheld the adjustment proposed by the AO. However, the Tribunal, based on its previous orders, set aside the impugned order and remitted the matter back to the AO/TPO for fresh consideration in accordance with the Tribunal's directions in the assessee's own case for earlier assessment years.Addition of Leave Encashment:The appeal also included an issue regarding the addition of Rs.40,33,460 towards Leave Encashment. The ld. AR did not press Ground No.4 related to this addition, leading to its dismissal as 'not pressed.' Consequently, the appeal was partly allowed for statistical purposes. The Tribunal pronounced the order on 14th February 2019.