TaxTMI 
TaxTMI 
2020 (2) TMI 1608
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....n determining the arm's length price for international transaction in respect of availing of intra-group services, i.e. Administrative and Managerial Services by the Appellant from its Associated Enterprises (AE) at Rs. NIL as against the sum of Rs. 71,67,037/- determined by the Appellant and thereby proposing an adjustment of Rs. 71,67,037/-. 2. The Learned Dy. Commissioner of Income-tax, Circle 10(2)(2), Mumbai has erred in stating that no tangible or direct benefit was derived by the Appellant from receipt of the intra-group services and that the Appellant failed to furnish adequate evidences to demonstrate that the services were actually rendered by the AE, not appreciating the details, explanations and evidences submitted by t....
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....ata is as follows :- Nature of International Transaction Most Appropriate Method Profit Level Indicator Megger's Adjusted Operating Margin Comparables Adjusted weighted average operating margin International transactions aggregated under the system integration segment Transactional Net Margin Method Adjusted Operating Profit / Sales 17.01 per cent 4.37 per cent On this basis, the assessee contended that its international transactions are at the arm's length. The TPO in Order passed u/s. 92CA(3), determined the arm's length price of the international transactions of payment made for administrative and management services at NIL as against Rs. 71,67,037/- claimed by the assessee. 5. While making the adjustm....
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....ng but a broad-brush approach aimed at flatly equating the costs related to the revenue. g) After carefully, considering the facts of the case submitted by the assessee, it is seen that the assessee has made detailed submissions regarding the legal provisions but has not responded to the undersigned queries on facts. The assessee has failed to furnish any evidences regarding the receipt of shared services. For determining the arm's length price of international transaction of receipt of shared services by the assessee the following considerations are of prime importance: 1) Whether services were received or not? 2) Whether services were beneficial to the recipient or not? The quantum of share services are....
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....'s order concluded as under :- "7.2 The assessee has not raised any objection against the above proposed addition/disallowance. However, since the TPO has taken the ALP of the said transaction at NIL, and effectively there has been an upward adjustment of Rs. 71,67,037/-, which has also been upheld by the Hon'ble DRP, therefore, the said expenses after being not allowed u/s.37(l) and/or u/s.40A(2)(b) of the Act, are not added back to the total income of the assessee, as the same may result into the double taxation of the said amount." 7. The DRP upheld the action of the Transfer Pricing officer on the ground that the format of the agreement was not appropriate, the details are not available and that benefit test was not complied....
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....hat he is not applying the benefit test, rather by raising issues of the documentation he has stepped into the shoes of the Transfer Pricing officer. The DRP has also erred in holding that the agreement should have been entered into by the parties in a particular manner by incorporating several other clauses. In our considered opinion here the dispute resolution panel exceeded its jurisdiction on this account. The format of agreement between the parties is not a subject matter of decision of DRP. The dispute resolution panel further erred in agreeing with the Transfer Pricing officer for application of benefit test for computing the arms length price of the international transaction. Accordingly in our considered opinion the Transfer Pricin....