2020 (2) TMI 114

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rd both parties and perused the material available on record. The assessee before us challenging the action of Dispute Resolution Panel (DRP) directing the AO to include ICRA Management Consulting Services Ltd., Quadrant Communications and Asian Business Exhibition & Conference Ltd. In consequently, to delete the addition made by the AO on account of transfer pricing adjustment involving the above said amount. 6. We note that while including ICRA Management Consulting Services Ltd. the AO did not record any reason for inclusion of said company as comparable. We find in para 2.2.4.4 of DRP at page 14 directed the TPO to verify the comparability of the said company based upon its annual report for F.Y. 2009-10 involving the year under consideration i.e. A.Y. 2010-11. Therefore, we uphold the directions of DRP with a direction to AO to get the report from TPO and decide the comparability of the said company be that of assessee. Regarding inclusion of Quadrant Communications. 7. The assessee objected for considering the Forex as Non-Operative to the inclusion of Quadrant Communications that it is not functionally comparable and the said company involved in advertising ag....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....de the same as comparable resulting into the adjustment made by the AO is therefore deleted. Therefore, we hold that the Quadrant Communications cannot be compared. Regarding inclusion of Asian Business Exhibition & Conference Ltd. 10. The assessee objected that the activity of Asian Business Exhibition & Conference Ltd. is functionally different. Further, it was submitted that the said company is into organizing exhibition and trade fairs in which the assessee is not at all involved. The TPO rejected the objections of assessee. We note that the TPO has observed in its remarks that the said company involved in conducting exhibitions and events and most of the income comes from exhibitions and events. The DRP held the functions of the said company are comparable with the assessee and the AO made transfer pricing adjustment. The assessee placed on record the order dated 25-04-2019 of this Tribunal passed in M/s. John Deere India Pvt. Ltd. wherein the Revenue challenged directions of DRP for exclusion of Asian Business Exhibition & Conference Ltd. from the list of comparables. The Tribunal rendered the detailed discussion and held the DRP is justified in directing to exclude ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ated enterprise provided business support and management support services to the assessee, which the assessee claimed enhanced its operational efficiency and also standardized its internal processes. The assessee had furnished documentary evidence in this regard providing details of personnel rendering the services, number of man hours spent, total cost incurred in rendering such services and also explanation was given vis-à-vis work done. The invoices received from associated enterprise were also furnished before the authorities below. However, the TPO held that in fact no services were received by assessee and also observed that services were routine in nature and were neither asked for nor given by associated enterprise and the TPO benchmarked the said transaction at Nil and made an upward adjustment of Rs. 2.18 crores. 16. The learned Authorized Representative for the assessee pointed out that last year the TPO had accepted the said transaction to be at arm's length price. The Assessing Officer had disallowed the said payment under section 37(1) of the Act. However, the DRP deleted the addition, against which no appeal has been filed by Revenue. Our attentio....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the absence of same and following the rule of consistency we find no merit in the orders of TPO/Assessing Officer and the same is reversed. The ground of appeal No.3 raised by assessee is thus, allowed. The grounds of appeal raised by assessee are thus, allowed." There was no order contrary to the findings of this Tribunal in assessee's own case was placed on record and in view of the same, we reverse the order of DRP and direct the AO to accept the value of managerial services as claimed by the assessee at Nil. Thus, ground No. 3 raised by the assessee is allowed. 14. Ground No. 4 raised by the assessee challenging the action of AO in confirming the transfer pricing adjustment as directed by the DRP on account of payment of royalty of Rs. 27,32,494/-. 15. Heard both parties and perused the material available on record. The assessee made payment of Rs. 27,32,494/- to its associated enterprise Renishaw plc on account of royalty. The TPO called for explanation as to why the royalty should not be treated as Nil. The assessee explained the margin earned by the assessee is higher than that of comparables and assessee made substantial purchase of raw material from local marke....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....gy products. The RMSPL has been desirous of manufacturing metrology products and export the same to Renishaw and any company in which Renishaw owns 20% or more of the voting share capital (Affiliate) on the terms and conditions as detailed therein. The technical know-how includes all inventions, processes, patents, engineering and manufacturing skill and other technical information called by the Renishaw plc have been agreed to use without intimation by the RMSPL. Further, Renishaw plc granted an exclusive license to make in India the products by use of any or all of the know-how and a nonexclusive license to use and sell the said products throughout India and outside India to Renishaw and its affiliates. Therefore, it is clears that having technical know-how owned by the Renishaw plc including a technical and engineering data, calculation and information, design data, calculations and information, details of layout of works, including details and specification of machinery and license to make in India and nonexclusive license to use and sell the said products throughout India and outside India has been granted to RMSPL. 18. We note that the statement showing that the details of....