TaxTMI 
TaxTMI 
2018 (5) TMI 1972
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....ance of the grievance of the assessee is that the DRP/TPO/Assessing Officer grossly erred in making a transfer pricing addition of Rs. 6,05,36,749/- while computing the income of the assessee. 3. The representatives of both the sides were heard at length, the case records carefully perused and with the assistance of the ld. Counsel/DR, we have considered the relevant documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules. Judicial decisions relied upon were duly considered. 4. Briefly stated, the facts of the case are that the assessee [ATKBO] is an independent branch office of ATK Ltd which was set up in 1997 for providing management consultancy services to Indian and foreign clients. A....
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....has paid Rs. 5,90,90,084/- to its AEs i.e. ATK Australia, ATK USA, ATK Holdings UK and ATK Indonesia on account of certain services purposed to have been received by the assessee. The TPO noticed that this amount has been split by the assessee into its management consultancy segments and treated as cost while the overall transactions were benchmarked using TNMM. 8. The breakup of the management fee paid by the assessee are as follows: • Management services from ATK USA [Rs. 2,98,70,820/-] • Account services • Global financial planning services • K-Net services • Knowledge services • Information systems • Human resource information system â....
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.... of share holder services. 10. Before us, while supporting the order of the lower authorities, the ld. DR stated that the assessee has not been able to bring out the specific services that are performed under the aforementioned services under management services. It is the say of the ld. DR that the functions mentioned hereinabove are part of the I.T support functions performed under the I.T. support provided by ATK UK for which cost allocation has been done to the ATKBO. The ld. DR vehemently stated that to make payments once again for same set of services to the ATK UK would amount to duplication of activities which are not allowed for tax purposes. Strong reliance was placed on the OECD guidelines wherein intra group services have bee....
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....e structured. For this proposition, we draw support from the judgment of the Hon'ble jurisdictional High Court of Delhi in the case of EKL appliances 344 ITR 241. 13. In the same judgment, the Hon'ble High Court observed that "The character of transaction may derive from relationship between the parties rather than be determined by normal commercial conditions as may have been structured by the tax payer to avoid or minimize tax. The significance of the aforesaid guidelines lies in the fact that they recognise that barring exceptional cases, the tax administration should not disregard the actual transaction or substitute other transactions for them and the examination of a controlled transaction should ordinaril....
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....s: 17. Break up of cost under each head is exhibited separately in the paper book. Each cost is supported by evidences which are placed at pages 701 to 1421 of the paper book. 18. In so far as the allegation relating to the payment for duplicate services is concerned, it appears that lower authorities have confused ATKBO with another group entity ATK India Pvt. Ltd which is a separate entity whose financial/TP study are placed on our record for the year under consideration. Detailed cost allocation sheets showing different personnel involved for each service has been placed on record separately. We find that the revenue authorities have simply rubbished the email evidences brought on record without examining and pointing out defects i....