TaxTMI 
TaxTMI 
2017 (10) TMI 1259
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng the present appeal sought to set aside the impugned order dated 20.03.2013, passed by the AO in consonance with the orders passed by the ld. CIT (A)/TPO under section 143 (3) read with section 144C of the Income-tax Act, 1961 (for short 'the Act') qua the assessment year 2009-10 on the grounds inter alia that :- "The Appellant respectfully submits as under : Transfer Pricing ("TP") Adjustment - Reimbursement of Software Costs (INR 69,59,814) 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding TP adjustment on account of reimbursement of software costs by the Appellant to its Associated Enterprise ("AE"), namely Bentec S.p.A. 2. On the facts and circumstances of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ently deleting the addition of Rs. 13,57,77,031/- made on this point." 4. Briefly stated the facts necessary for adjudication of the controversy at hand are : Benetton India Private Limited (BIPL) is a wholly owned subsidiary of Benetton International NV, Netherlands which is also a subsidiary of Benetton Group SPA, Italy. The taxpayer is into the business of production and sale of readymade garments in the name and style of 'Benetton' in India and for this purpose, it imports certain garments and accessories for sale at its outlets. The taxpayer also export finished goods manufactured by it to Benetton Group entities on regular basis and it assisted Benetton SPA in acquiring garments and other finished products from third party vendors ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder CUP and in the absence of any substantive material, benefit has accrued to the taxpayer. TPO held all other transactions at Arm's Length Price (ALP). 8. The taxpayer carried the matter before the ld. CIT (A) who has deleted the addition of Rs. 8,30,15,291/- on account of transfer pricing adjustment qua royalty paid to AE by following decision of his predecessors for AYs 2007-08 and 2008-09. Ld. CIT (A) however deleted the TP adjustment of Rs. 69,59,814/- on account of reimbursement of software cost by the taxpayer to its AE, namely, Benetton SPA. Feeling aggrieved, both the taxpayer as well as the Revenue have come up before the Tribunal by way of filing the present cross appeals. 9. We have heard the ld. Authorized Representativ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... necessary that the expenditure incurred by the taxpayer results in direct and tangible benefits for the spender; that it is prerogative of the taxpayer / businessman to enter into any transaction for its business and relied upon the decision rendered by Hon'ble Delhi High Court in case of CIT vs. EKL Appliances Ltd. - TS-206-HC-2012 (DEL)-TP. The ld. AR for the taxpayer further contended that the issue in controversy has already been decided by the coordinate Bench of the Tribunal in taxpayer's own case for AY 2007-08. 12. However, on the other hand, the ld. DR for the Revenue relied upon the order passed by TPO/ CIT (A). 13. The coordinate Bench of the Tribunal upheld the findings of ld. CIT (A) returned in favour of the taxpayer qu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) GROUNDS NO.1 & 2 16. The taxpayer claimed to have paid royalty to Bencom S.R.L. (Bencom) for manufacture of garments and accessories and stated to have furnished the details of intangibles provided by Bencom to the taxpayer before TPO as is mentioned in para 11.4 of the TP order. TPO treated an amount of Rs. 8,30,15,291/- as adjustment u/s 92CA on account of value of the royalty transfer in uncontrolled condition at Rs.NIL under CUP. However, ld. CIT (A) deleted the addition by following the decision of his predecessors rendered in assessee's own case for AYs 2007-08 & 2008-09 which have already been affirmed by the coordinate Bench of the Tribunal. 17. The ld. CIT (A) has thrashed the issue threadbare and has came to the conclus....