2020 (9) TMI 1289

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.... 2. The Revenue in its appeal has raised following grounds:- "1. Whether on the facts and circumstances of the case, has the DRP erred in rejecting the comparable case of Engineers India Ltd. being government undertaking without appreciating the fact that the comparable was continuously making profits and was functionally comparable with assessee and was selected appropriately by the TPO as comparable as per the provisions of the Act. 2. Whether on the facts and circumstances of the case, did the DRP erred in giving relief to the assessee by deleting the TP adjustment of Rs.5,93,58,926/- on account of payment of royalty, project engineering and manufacturing drawings without appreciating the fact that the adjustment was ....

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....nfructuous as the margin of the assessee would be at arm's length. 5. Shri A. Mohan, representing the Department vehemently defended the order of Transfer Pricing Officer (TPO). However, the ld. Departmental Representative fairly admitted that both the grounds raised by the Revenue in appeal were considered by the Tribunal in assessee's own case in the preceding assessment year. 6. We have heard the submissions made by rival sides and have examined the orders of authorities below. In ground No.1 of the appeal, the Revenue has assailed exclusion of Engineers India Limited, a Government Undertaking from the list of comparable companies. The Tribunal in various cases has consistently held that the Government companies are not good compar....

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....ejected the Government undertaking as comparable by following the order of Tribunal in assesse's own case for AY 2008-09. We do not find any merit in ground No.1 of the appeal. Accordingly, the same is dismissed. 7. In ground No.2 of the appeal, Revenue has assailed the findings of DRP in deleting the transfer pricing adjustment of Rs.5,93,58,926/- on account of payment of royalty, project engineering and manufacturing drawings. We find that the DRP has deleted the addition by placing reliance on the order of the Tribunal in assessee's own case for assessment year 2008-09. The Co-ordinate Bench of the Tribunal deleted the addition in respect of payment of royalty in the assessment year 2008-09. The relevant extract of the findings of the....

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....sed by the Tribunal in assessee's own case in Thyssen Krupp Industries India (P.) Ltd. v. Asstt. CIT [2013] 55 SOT 497/[2012] 27 taxmann.com 334 (Mum.) for the A.Y. 2007-08, the learned AR stated that this point has been decided in assessee's favour. The learned Departmental Representative, however, relied on the impugned order. 14.3 After considering the rival submissions and perusing the relevant material on record, we find that the assessee entered into collaboration agreement with its AE for payment of 2% of contract value for manufacturing, drawing and engineering services and 5% of the selling price as royalty. The assessee applied to the RBI seeking approval in respect of payment of royalty and technical fee through ....