2019 (6) TMI 1709

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....en without prejudice to each other - On facts and in law, Ground 1: The learned A.O. / DRP erred in making an addition of INR 3,28,81,268/- u/s 92C on the basis of the order of the TPO u/s 92CA(3) dated January 28, 2016 in the case of the appellant company. Sub ground 1.1: The learned A.O. / DRP erred in determining the Arm's Length Price (ALP) of the international transactions pertaining to payments made to Associated Enterprises (AE) for intra group services (marketing and administrative services) at INR Nil and thereby erred in making an addition of INR 3,28,81,268/-. Sub ground 1.2: The learned A.O. / DRP erred in rejecting Transactional Net Margin Method (TNMM) adopted by the as....

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....E was justified and there was no reason to determine the ALP of the said transactions at INR Nil. Sub ground 1.7: The learned A.O. / DRP failed to appreciate that the assessee company had aggregated the transaction of Intra Group Services with other International Transactions entered into with the AEs and had determined the ALP by applying the TNMM and hence, there was no reason to separately benchmark the transaction of Intra Group Services and adopt the CUP method to determine the ALP of the said International Transaction. Sub ground 1.8: The learned A.O / DRP erred in not appreciating that the appellant company had submitted various evidences to prove the receipt of marketing and administrative service....

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....vices were filed and the DRP has deleted the adjustment of payments for TAD services. However, in respect of Marketing Services and Admin Services Division, entire payment of Rs. 3.28 crores had been disallowed. The learned Authorized Representative for the assessee pointed out that in assessment year 2009-10, similar issue had arisen, wherein the TPO had determined cost of Intra group services at nil. He referred to the order of Tribunal in assessment year 2009-10 in ITA No.519/PUN/2014, vide order dated 05.03.2018, the Tribunal held that TPO had erred in determining cost of Intra group services at nil and making adjustment in respect of said international transactions pertaining to Intra group services provided by AE's to assessee. It....

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.... assessee had made the aforesaid payments for Intra group services in three fields of Technical & Drawing Design Services (TAD), Marketing Services and Admin Services (HR, IT support services). The TPO applied CUP method to arrive at arm's length price of said Intra group service transactions and determined the cost of Intra group services at nil and hence, made an upward adjustment of Rs. 4.63 crores in the hands of assessee. The DRP on appraisal of evidences filed had reversed the order of TPO in respect of TAD services. However, in respect of Marketing and Administrative Services, DRP had determined cost of such services at nil and consequently, made an upward adjustment of Rs. 3.28 crores in the hands of assessee. 6. We find that....