TaxTMI 
TaxTMI 
2021 (1) TMI 1289
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....e Ld. CIT (A) has erred on facts and in law in deleting the addition of Rs.6,97,61,263/- made by the AO rejecting the TNMM method applied by the assessee and used cup method for benchmarking the transaction of Intra Group Services (professional consultancy services and management fee for support services)." 3. Briefly stated the facts necessary for adjudication of the controversy at hand are : Knorr Bremse India Pvt. Ltd. (KB India), the taxpayer is a wholly owned subsidiary of Knorr Bremse Asia Pacific (Holding) Limited (KB Hongkong). The taxpayer is into manufacturing of airbrake sets of passenger cars and wagon coaches, shock absorbers for passenger cars and locomotives, distributor valves, computer control brake system, tread break uni....
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....t arm's length, these transactions have also been considered to be at arm's length. 11 Availing of Information Technology Consultancy Services Common segment - Manufacturing distribution and service 4,47,57,627 12 Reimbursement of miscellaneous expense to AEs Others 1,37,82,156 Other Method as per Rule 13 Reimbursement of 10AB miscellaneous expense from AEs Others 3,66,52,177 14 Interest on ECBs availed in FY 2011-12 Others 1,17,37,884 Comparable Uncontrolled Price Method ("CUP") 4. Ld. TPO questioned two transactions undertaken by the taxpayer with its AEs viz. professional consultancy services (information technology) and fee for management support services to be not at Arm's Length Price (ALP) and determined their valu....
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....roup Services (professional consultancy services and management fee for support services). 8. Ld. DR for the Revenue challenging the order passed by the ld. CIT (A) relied upon the order passed by the TPO/AO. However, ld. AR for the taxpayer contended that this issue is covered in favour of the taxpayer in its own case for Assessment Years 2008-09, 2009-10, 2010-11, 2011-12 & 2012-13 decided by the Tribunal. The Revenue has challenged the order passed by the Tribunal for AYs 2007-08, 2009-10 & 2010-11 before the Hon'ble Punjab & Haryana High Court and their appeals have been dismissed vide order dated 10.12.2019 passed in ITA 8535/2018 (O&M), ITA 105/2019 (O&M) & ITA 104/2019 (O&M). 9. Undisputedly, facts qua the year under assessment are....
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.... of the TPO/AO that services were not received by the assessee from A.E.?" 7. It is the contention of Mr. Tajender Joshi, Ld. Counsel for the Revenue that the Tribunal had fallen in error in rejecting the Cup Method employed by the TPO and accepting the TNMM used by the assessee in its transfer pricing analysis. It was also argued that the ITAT has not passed the order as per the directions/ observations given by this Court in the order dated 06- 11-2015. He relied on the observations made by this Court in above said order and contended that this court did not held that the CUP method applied by the TPO was wrong and TNM method was required to be applied. The counsel for the revenue further contended that the ITAT had fallen in error in ....
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.... 10. In light of the above, the conclusion of the ITAT could not be faulted as the same was inconsonance with the provisions of the Act and the Rules. The contention of the Counsel for the revenue cannot be accepted as the Tribunal while upholding the TNMM Method has observed that the other methods prescribed under the Act namely the CUP or Cost Plus Method being not applicable in the facts and circumstances of the case, the Respondent Assessee could only resort to TNMM as the most appropriate method to show that its profit margin from international transactions was at arm's length. 11. Further, the Tribunal has concluded that the expenses paid to the employees of the A.E. were in the nature of reimbursement of their salaries witho....