Additional evidence for intra-group services admitted; transfer pricing adjustment remanded for fresh adjudication after due hearing.

Additional evidence supporting intra-group legal and professional services expenses was admitted because the assessee showed reasonable cause for earlier non-production, namely disruption of the associated enterprise during the Covid-19 period. The transfer pricing adjustment was then remanded for de novo adjudication after giving both sides a proper opportunity to be heard, so the assessee succeeded to that extent.

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Issues: Whether additional evidence relating to intra-group legal and professional services could be admitted and whether the transfer pricing adjustment on that account should be set aside for fresh adjudication.

Analysis: The assessee produced documents showing expenses incurred by associated enterprises for legal and professional services, explaining that they were not filed before the transfer pricing authority because the Canadian associate enterprise was disrupted during the Covid-19 period. The explanation was found to be reasonable cause for the earlier non-production of evidence. The additional documents were accordingly admitted, and the dispute on the transfer pricing adjustment was sent back to the transfer pricing authority for fresh consideration after granting due opportunity to both sides.

Conclusion: The additional evidence was admitted and the transfer pricing issue was remanded for de novo adjudication; the assessee succeeded to that extent.

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