Transfer pricing adjustment for royalty and technical fees left undisturbed after DRP directions and later-year consistency supported the taxpayer.

Transfer pricing adjustments on royalty and fees for technical services paid to an associated enterprise were left undisturbed, as the Court noted that the Department had accepted the aggregated approach in later assessment years and that similar adjustments for an earlier year had already been deleted by the Dispute Resolution Panel. The Court also recognised that DRP directions issued under the governing statutory framework bind the Assessing Officer. In these circumstances, the appeal was not entertained and the challenge to the upward adjustment failed.

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Issues: Whether the upward adjustment made towards royalty and fees for technical services paid to the associated enterprise was tenable and whether the appeal deserved interference.

Analysis: The appeal concerned transfer pricing adjustments on royalty and technical fee payments. The Court noted that for subsequent assessment years the Department had accepted the aggregated approach, and that for Assessment Year 2010-11 similar adjustments had already been deleted by the Dispute Resolution Panel. It was also noted that the directions framed by the Dispute Resolution Panel under the governing statutory regime would bind the Assessing Officer. In these circumstances, the Court found no justification to entertain the appeal.

Conclusion: The upward adjustment was not interfered with in appeal and the challenge failed.

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