TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 572
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....24 dated 12.04.2024 of the Ld.DRP. The reference to the word "Act" in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time. 2.0 The only issue raised in the present appeal through its grounds of appeal are regarding the action of the Ld.AO in making an addition by relying upon recommendation of the Ld.TPO in proposing a downward adjustment of Rs. 5,08,36,826/- towards payment of Global Account Management Charges (GAM). The learned counsel for the assessee submitted that the impugned downward adjustment made by the ld.TPO has been erroneously confirmed by the Ld.DRP, arbitrarily and without any basis. 3.0 At this stage we deem it appropriate to briefly examine the brief factual matrix of this case. The as....
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.... the Assessee obtains Global Account Management services as well as IT services from its Associate Enterprises (AEs). It was argued that the Ld.TPO has considered and allowed IT services but has not allowed Global Account Management services. The Ld AR also submitted that under Global Account Management Service, the AE uses its global reputation and customer vendor relationship to identify new customers and provide the Group's knowledge and expertise in securing orders from customers. Further it was argued that a mark-up of 5% has been placed qua, these services and that the same is applicable to all group entities as per the service agreement and the cost allocation. The Ld.AR argued that significantly the impugned support services i.e. GA....
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....of this tribunal in the case of AVO Carbon India Private Limited (IT(TP)A No.82/Chny/2024), Bonfigioli Transmissions Private Limited ITA No.2977 / Chny / 2017 to argue that the GAM charges are justified payments to its AEs. 4.0 Per contra, the Ld.DR submitted that the Appellant has not undertaken consistent approach as they have used search under ORBIS database for Ay 2016-17 & 2017-18 and for AY 2020-21 they undertaken aggregation method. It was argued that there was lack of consistency in the approach of the assessee. Further, the Ld DR relied on the jurisdictional Tribunal decision in the case of AB Mauri India Pvt Ltd in IT(TP)A.No.84 to 86 of 2018 and International Flavours and Fragrance Pvt Ltd in IT(TP)A.No.58 of 2018 to buttress he....
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....s type, over which any doubts can be caste. It is, in realty, a routine activity which comprises every business activity of the type pursued by the assessee. We have noted that the Assessee, through its voluminuous paper book, has brought on record agreement, invoices, various email communications establishing the receipt of services, break- up of cost incurred by AE, detailed break-up of revenue earned through AE's support. All these evidences are substantial and do not confirm the Ld.TPO's allegation of the same being vague. We also find sufficient force in the argument of the Ld AR that the present service cannot be classified as stewardship services as the services has actually benefitted the appellant assessee. Therefore, when the AE h....
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....elete the impugned addition of Rs. 7,25,09,110/- on account of downward adjustment of payment of management fees . All the grounds of appeal raised by the assessee on this issue are therefore allowed. Further, in the case of "Bonfigioli transmissions Private Limited Vs. DCIT, ITAT Chennai for AY 2013-14- [ITA No. 2977/CHNY/2017] it was held that "Admittedly the business of the assessee is a consolidated one. The services referred under 'Corporate Services" are intrinsically linked to its manufacturing and sales activity. These two services cannot be separately demarcated. Corporate services are the services rendered, which has helped the assessee in generating the business in respect of marketing and trading. This being so, in view of the....
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....aid transaction is inextricably connected with core business operation and as such it cannot be segregated and benchmarked independently. We have noted the decision of this Tribunal in the case of Siemens Gamesa Renewable Power (P.) Ltd v. DCIT 155 taxmann.com 406 holding as under: "Admittedly the business of the assessee is a consolidated one. The services referred under 'Corporate Services" are intrinsically linked to its manufacturing and sales activity. These two services cannot be separately demarcated. Corporate services are the services rendered, which has helped the assessee in generating the business in respect of marketing and trading. This being so, in view of the decision of Hon'ble Delhi High Court in the case of CIT vs. EKL ....