TaxTMI 
TaxTMI 
2022 (3) TMI 1469
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....after referred to as the "learned A0] under section 143(3) read with section 144C of the Income-tax Act, 1961 ("the Act") on the following grounds: That on the facts and circumstances of the case and in law: 1. The learned AO/ Hon'ble DRP erred, in law and in facts. by not accepting the economic analysis undertaken by the Appellant with respect to recovery of expenses from associated enterprises and holding that the Appellant's international transaction is not at arm's length, thereby making a TP adjustment of Rs. 6,09,708 2. The learned AO/ Hon'ble DRP erred, in law and in facts, by concluding that a mark-up of 5% on net reimbursements should be charged towards finance cost for the funds blocked by the Appellant in the process of facilitating payments on behalf of it's associated enterprises and then subsequently recovering it from them: 3. The learned AO has erred in law and in facts by restricting the amount of Minimum Alternate Tax ("MAT") credit set-off to the amount claimed by the Appellant in its return of income and not providing the complete MAT credit set off as per the provisions of Section 115JAA of the Act, while computing the tax liabil....
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.... facts, in initiating penalty proceedings u/s 271(1)(c) of the Act. The Appellant submits that each of the above grounds is independent and without prejudice to one another. The Appellant craves leave to add, alter, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal, so as to enable the Hon'ble Tribunal to decide on the appeal in accordance with the law." At the outset, the Ld.AR submitted that issues alleged by assessee in both the appeals are identical and accordingly they are disposed by way of common order. For sake of convenience, we are considering the facts for A.Y. 2012-13. 2. Brief facts of the case are as under: 2.1 The assessee is a company and filed its return of income for assessment 2012-13 on 29/11/2012 declaring total income of Rs. 5,64,04,840/- and for assessment 2013-14 on 26/11/2013 declaring total income of Rs. 7,38,69,480/-. 2.2 The Ld.AO observed that assessee entered into international transactions with its AE exceeding Rs. 15 crores and accordingly reference was made to the transfer pricing officer. Upon receipt, of reference, the Ld.TPO called upon assessee to fil....
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....e in agreement with the assessee when it argued that the cost of the resources used/ incurred by the Assessee towards provision of these services / assistance i.e. employee cost, rent, depreciation, etc has been included in the total cost of Amicorp India considered for the purpose of mark-up and recovered from the Group at cost plus 20 percent and the same has been held to be arms length by the TPO. Respectfully, following the decisions relied on by the assessee; we are of the considered view that, there cannot be any separate adjustment for this purpose of loss of profit. However, coming to the issue that the funds were blocked in the process and there has to be some finance cost, the same is covered by the decision of the Hon'ble ITAT, Hyderabad in the case of M/s Kirby Building Systems India Limited in ITA No. 1759/Hyd/2012, and in 1TA.No.262/Hyd/2014, in respect of assessment years 2008-2009 and 2009-2010, considering the similar issue in paragraph 10 of the order, wherein it was held that "considering the fact that some services are certainly required and assessee has to incur cost in the beginning thereby extending some credit facility, we are of the opinion a mark up of ....
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....e Bench of this Tribunal in assessee's own case for A.Y. 2011-12 wherein the issue has been remanded to the Ld.AO by observing as under: "21. In respect of reimbursements received and paid, the assessee did not bench mark the transactions, as it was the opinion that the reimbursements made on actual basis is at arms length. The TPO noticed that the reimbursements paid by the assessee towards expenses incurred by the AEs on its behalf has been debited to Profit and Loss account and claimed as deduction. The TPO did not make any adjustment in respect of this payment amounting to Rs.1,39,78,966/-, apparently since the PLI computed under TNMM would subsume this payment also. 22. In respect of reimbursements received by the assessee from its AE, the TPO has taken the view that the assessee has utilized its services, blocked its working capital etc., and the services so rendered would fall under the category of administrative support services. Accordingly, the TPO has selected three comparable companies and applied margin of 13.12% on the amount of reimbursements received by the assessee from its AEs. As noticed earlier, the Ld DRP has directed the AO to apply the above said margin ....