TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 455
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.... consideration, the assessee company filed it's return of income on 30.11.2016 declaring total income of Rs.43,08,88,530/- and claimed a refund of Rs.47,46,097/-. Subsequently, the assessee revised it's return of income on 28.03.2018 declaring total income at Rs.43,08,88,530/- and claimed a refund of Rs.68,05,230/-. The assessee company showed it's income in the profit and loss from Business and Profession. Further, the assessee along with it's return of income filed tax audit report in Form No.3CA and 3CD as required under section 44AB of the I.T. Act, 1961. The assessee has also filed the report in Form No.3CEB relating to international transactions. The case of the assessee was selected for scrutiny under CASS and accordingly notice dated 04.7.2017 under section 143(2) of the I.T. Act, 1961 was issued to the assessee company, which was duly served upon the assessee company. Further, the A.O. also issued notice under section 142(1) and served upon the assessee along with questionnaire. In response to the said notice, the assessee's Authorised Representative appeared before the A.O. from time to time and filed their submissions which were duly considered and the A.O. made an addit....
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....ompany on this issue. We find that this issue too was consistently a subject matter of dispute before the DRP in earlier AYs. The DRP has vide its direction dated 16.11.2015 for AY 201 1-1 2 in Para No. 6.3 held the following : " 6.3.1. The DRP has considered the submissions of the assessee company on this issue, the legal position under the I. T. Act 1961 and the international practices, where a charge for an infra-group service is justified, the amount charged should be determined in accordance with the arm's length principle. The arm's length service suppliers would usually expect to recover their costs plus an element of profit. A careful read of paragraphs 7.33 of the OECD guidelines on the issue suggests : For intra-group services, the issue may arise whether it is necessary that the charge be such that it results in a profit for the service provider. In an arm's length transaction, an independent enterprise normally would seek to charge for services in such a way as to generate profit, rather than providing' the services merely at cost. 6.3.2. Therefore, the determination of the mark up of 3% for providing services by the assessee to its AE as servic....
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.... instant case for the A.Y. 2016-17 remain the same, therefore, following the findings of the DRP in earlier years, the objection raised by the assessee company was rejected. 4. Aggrieved by the order of the DRP, the assessee company filed the present appeal before the Tribunal by raising the following grounds : "The grounds stated here under are independent of, and without prejudice to one another. 1. Ground No. 1 - Transfer Pricing adjustment in respect of Technical know-how fees of INR. 126,616,031 paid by Appellant to its Associated Enterprise ('AE') 1.1. On the facts and circumstances of the case and in law, the learned Transfer Pricing Officer ('TPO') / Assessing Officer ('AO')/ National E-Assessment Centre ('NeAC') erred in holding, and the Hon'ble Dispute Resolution Panel ('DRP') further erred in directing, that the arm's length price in respect of Technical know-how fees of INR 12,66,16,031 paid by the Appellant to its AE was 'NIL'. 1.2. On the facts and circumstances of the case and in law, the learned TPO/AO/NeAC erred and the Hon'ble DRP further erred in not accepting the computation of arm's len....
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....nalty proceeding under Section 270(A) of the Act. The Appellant craves leave to add, alter, amend and/or withdraw any of the above grounds of appeal and to submit such statements, documents and papers as may be considered necessary either at or before the hearing of this appeal as per law." 5. During the course of hearing, the Learned Counsel for the Assessee has not pressed ground of appeal No.3. We, therefore, dismiss the same as not pressed. 6. In a nut-shell the remaining grounds to be adjudicated by the Tribunal are - (i) T.P. adjustment in respect of Technical know-how fee of Rs.12,66,16,031/- paid by the assessee company to it's Associated Enterprise [in short "AE" ] ; (ii) Incorrect computation of mark-up of 1.74 percent [Rs.27,78,346/-] on recovery of expenses by the appellant from it's AE and (iii) the penalty proceedings initiated by the A.O. under section 270(A )of the I.T. Act, 1961. 7. On grounds of appeal No.1 i.e., T.P. adjustment in respect of Technical know-how fee of Rs.12,66,16,031/- paid by the assessee company to it's Associated Enterprise, the Learned Counsel for the Assessee strongly relied on the order of the Mumbai Bench of the Tribunal in assessee'....