Transfer pricing adjustments on intra-group technical support...

Transfer pricing adjustments on intra-group technical support services were rejected where services were demonstrated, CUP benchmarking was not displaced, and the payments were not shareholder activities. Royalty paid under the technical collaboration arrangement remained revenue expenditure under the consistency principle, while straight-line operating lease rent based on AS-19 and depreciation on a river-bank embankment previously included in the block of assets were allowed. Employees' contribution disallowance was remanded to determine the applicable provision in light of Checkmate India and prevent double addition. A warranty provision was also remanded because its scientific basis, warranty period and utilisation were not adequately supported by reliable evidence. The appeal was partly allowed for statistical purposes.