TaxTMI 
TaxTMI 
2018 (11) TMI 1879
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.... year 2013-14, and ITA No.122/Chny/2018 is an appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-3,Chennai in appeal No.262/2016-17/A-3 dated 29.09.2017 for the assessment year 2012-13. Since the issues in both the appeals are identical, these appeals are disposed off through a common order. 2. Ms.Abhinaya Ramanujam represented on behalf of the Assessee, and Mrs.V.S. Sreelekha represented on behalf of the Revenue. 3. It was submitted by ld.A.R that the issues involved in these appeals are Transfer Pricing issue. It was a submission that the assessee is in the business of manufacturing actuators, which are installed onto valves for carrying out the function of regulating transportation of liquids....
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.... "8. In respect of Ground Nos.11 to 13, it was submitted by the ld.A.R that the assessee had made payments for Corporate Services availed by the assessee from its A.Es. Ld.A.R drew our attention to the agreement entered into by the assessee with it's A.Es at page No.393 of the paper book. It was submitted that the agreement was between the parent company, Bonfiglioli Riduttori Spa (BRI), Italy and 20 subsidiaries. The assessee was shown at party No.16 in the said agreement. It was submitted that there were four types of services provided i.e. Information & Technology services, Accounting & Finance, Quality control system & Marketing services. It was submitted that ld. Assessing Officer allowed the claim of information technology fees,....
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....er has done in the present case is to hold that the assessee ought not to have entered into the agreement to pay royalty/brand fee, because it has been suffering losses continuously. So long as the expenditure or payment has been demonstrated to have been incurred or laid out for the purposes of business, it is no concern of the Transfer Pricing Officer to disallow the same on any extraneous reasoning. As provided in the OECD guidelines, he is expected to examine the international transaction as he actually finds the same and then make suitable adjustment but a wholesale disallowance of the expenditure, particularly on the grounds which have been given by the Transfer Pricing Officer is not contemplated or authorised. 23. Apart fro....
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.... that the order of TPO/A.O and direction of the DRP is liable to be sustained on this issue. 10. We have considered the rival submissions and perused the materials available on record. Admittedly the business of the assessee is a consolidated one. The services referred under 'Corporate Services" are intrinsically linked to its manufacturing and sales activity. These two services cannot be separately demarcated. Corporate services are the services rendered, which has helped the assessee in generating the business in respect of marketing and trading. This being so, in view of the decision of Hon'ble Delhi High Court in the case of CIT vs. EKL Appliances Ltd., referred to supra, the ld. Assessing Officer is directed to allow the asses....