TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 408
X X X X Extracts X X X X
X X X X Extracts X X X X
....l laws has been granted; hence there is no delay in fact. We confronted Ld. DR for Revenue who agreed to the submission of Ld. AR. In view of this, we proceed with hearing of appeal, there being no delay. 3. The background facts leading to this appeal are such that the appellant/assessee is a company originally known as "M/s Bisco Bio Sciences Private Limited", later changed to present name "M/s Limagrain India Private Limited". It is engaged in the business of research, production and sale of hybrid seeds of various field crops and also provides services in the field of agro bio-technology. For the relevant AY 2017-18, the assessee filed return of income u/s 139(1) on 30.11.2017 declaring total income at Rs. Nil with a loss of Rs. 37,90,21,971/-. The case was selected under scrutiny and statutory notices u/s 143(2)/142(1) were issued by AO while were complied with by assessee. During assessment-proceeding, the AO found that the assessee had entered into international transactions with its Associated Enterprises ["AEs"] situated outside India. The AO made a reference to Transfer Pricing Officer ["TPO"] on 27.09.2019 to determine Arm's Length Price ["ALP"] of those transactions. Vi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....transactions. The TPO has dealt these transactions in Para 6 of his order. When the TPO show-caused assessee vide notice dated 23.01.2021 to file documentary evidences of the service received, working of cost allocation etc., the assessee filed a reply dated 28.01.2021 which is re-produced by TPO in Para 6.1 of his order. The assessee submitted that it has received these services from AEs (i) Human resources support services, (ii) Strategic assistance services in relation to development of business, (iii) Finance and treasury services and (iv) General administration and organization services. The TPO, however, considered assessee's reply in Para No. 6.2 to 6.11 and rejected assessee's submission precisely on following basis: (i) The assessee did not file any documentary evidence with regard to actual receipt of services and without proof of actual receipt of service, the benchmarking and determining ALP was not possible. The assessee had filed only invoices raised by AEs, Transfer Pricing Study Report ["TPSR"] of AEs and Copy of agreement. (ii) The "TPSR" dated 30.06.2015 submitted by assessee did not pertain to financial year 2016-17 relevant to AY 2017-18 under consideration.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d rejected assessee's submission for following reasons: (i) The assessee has not filed any documentary evidence with regard to the actual receipt of services and without proof of receipt of actual services, it is not possible to determine the ALP and benchmark the same. The assessee has filed only copy of the invoices raised by AEs. (ii) The assessee has not filed "TPSR" although the assessee claimed to have filed. (iii) The assessee has not only failed to submit evidences of actual receipt of service but also failed to submit detailed working of allocation and mark-up charged by AEs. The allocation done by assessee is not based on actual facts and no third party would pay for such services in independent situation (Para 10.4 and 10.10 of TPO order). Accordingly, the TPO determined ALP at Rs. Nil. The assessee objected to the TPO's order before DRP. The DRP dealt assessee's objection in Para 10 of his order. Finally, vide Para 10.3.1, the DRP approved TPO's action of determining ALP at Rs. Nil by stating that this issue was identical to the issue of 'intra-group services' dealt by him in Para 6 of his order. In short, the DRP upheld TPO's action by accepting that the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for filing reply was very short and during relevant time, there was Covid pandemic also. Ld. DR submitted that due to these reasons, the additional evidences filed by assessee can be considered at appropriate level and the Bench can take a suitable call. 11. We have peacefully heard the learned representatives at length, considered their rival submissions and perused the orders of lower- authorities. After a careful consideration, we find that the TPO has determined ALP of impugned transactions at Rs. Nil and the same is accepted by DRP and AO. The foundational reason of taking a decision to determine ALP at Rs. Nil as culled out from order of TPO is such that the TPO was not even satisfied that the assessee had actually received services for which payments were made. The TPO has strongly noted that in absence of proof of receiving services, it is not possible to carry out benchmarking exercise and determine ALP. Ld. AR for assessee also acknowledges that there was a short period of just 5 days allowed by TPO and moreover that period was a difficult time of Covid due to which the assessee could not file all documents. The assessee has also filed additional evidences in terms of R....