TaxTMI 
TaxTMI 
2026 (1) TMI 411
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....nd secondly, providing Agency & Marketing Support Service. The Ld. AO/TPO have treated these two segments as part of the broad umbrella of services provided by the assessee and have treated them as one for the purposes of working out Arm's Length Price (ALP). The second issue pertains to the treatment given to non-compete fees which has been held to be capital in nature and also the depreciation amounting to Rs. 3,75,831/- being disallowed on the same. 1.1 The Ld. CIT(A) upheld the action of Ld. AO after following earlier years orders of Ld. CIT(A)s. 1.2 The assessee has approached the ITAT for the present year with the following grounds: - "1. That on the facts and circumstances of the case and in law, the order passed by the Hon'ble Commissioner of Income-tax (Appeals) New Delhi ("Hon'ble CIT(A)") is bad in law. 2. That on the facts and circumstances of the case and in law the Hon'ble CIT(A) erred in upholding the addition of INR 2,87,42,095/- to the returned income of the Appellant made by the Ld. AO / TPO by re-computing the arm's length price of the international transactions under section 92 of the Act. 3. Hon'ble CIT(A) erred in facts and in ....
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....n not allowing the benefit of brought forward depreciation of Rs. 1,08,61,406/- as claimed by the Appellant and further erred in not allowing the carry forward of unabsorbed depreciation of Rs. 2,52,06,777/- as claimed by the Appellant in the return of income filed. 6.1 That the Ld. CIT(A) has erred in arbitrarily remanding the matter to the AO for verification while treating the Appellant's claim for brought forward and unabsorbed depreciation as brought forward losses. That the above grounds are independent and without prejudice to each other. The Appellant craves leave to add, amend, alter, delete, rescind, forgo or withdraw any of the above grounds of objection either before or during the course of proceedings in the interest of the natural justice." 1.3 The Ld. AR made a statement at the Bar that the assessee was not pressing grounds 6 & 6.1. These grounds are accordingly dismissed as not pressed. 2. The Ld. AR argued with the help of written submissions and a plethora of case laws, including the orders of ITAT, presented in the shape of paper books and written submissions. The Ld. AR relied on the finding given in the assessee's own case for A....
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....issions with regard to the TP issues may be extracted for record and reference: - "1. Appellant is a domestic company and is engaged in the business of supplying equipment and products relating to material analysis. It also provides installation and commissioning services and after sales services to its clients in India. Product list includes material, analytical instruments like x-rays analytical equipment. 2. In the return of income appellant had disclosed following international transactions: - S. No. Nature of Transaction Method used by assessee Amount 1. Purchase of spare parts for normal business (RPM) Segment 1 Rs.53,45,830/- 2. Purchase of Traded goods Annual maintenance services Rs.60,95,100/- 3. Commission on sale of equipment and spare parts (TNMM) Segment 2 Agency and Marketing Support Services Rs.4,64,95,142/- 4. Sub-contracting expenses Rs.14,20,048/- 5. Service income Rs.52,15,601/- 6. Marketing and Administrative support services Rs.1,46,08,247/- 7. Communication Charge Rs.51,36,611/- 8. Seminar & training Rs.3,34,296/- 3. For benchmarking the abov....
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....ssee is responsible for making sale of spare parts and equipment imported by it from its AE. Sale of spare parts under AMC business can be broadly categorized into three types: (i) Over the counter sale wherein the customer has not taken any AMC and he purchases only spare parts or equipment from the assessee. (ii) Sale to AMC customer wherein the customer has taken AMC from the assessee. (iii) Replacement under AMC wherein the customer has taken AMC from the assessee and spare part required to be replaced is covered under AMC. 12. For contracts entered into between the assessee and its customers, the assessee is responsible for delivery of equipment and spare parts and services and, accordingly, it is also responsible for invoicing and collection of charges relating to it. The assessee deploys necessary assets for performing its business. It does not own any manufacturing facilities, research and development facilities or other significant assets for this activity. Employees of the assessee possess technical knowledge especially those who are involved in providing AMC services. 13. However, under provision of Agency and Marketing suppor....
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....d at pages 56 to 72 of PB) the Hon'ble ITAT followed its previous order for AY 2007-08 and has directed the TPO to benchmark the international transactions of the appellant separately under different segments and the FAR of segment 1 differs from FAR of segment 2. It is therefore submitted that for the year under consideration i.e. AY 2009-10 also the directions given by Hon'ble ITAT in AYs 2007-08 and 2008-09 be followed and TPO be directed to do separate benchmarking segment wise in accordance with law." 3. Per contra, the Ld. DR argued with the help of written submissions, some portions from which may be extracted as under: - "After perusal of facts of the instant case and decisions relied upon, reliance is placed upon decision of 5 Member Special Bench of Hon'ble ITAT in the case of Aztec Software and Technology Services Limited vs. ACIT (2007), 107 ITD 141 (Bang.) (SB) (copy of relevant part enclosed), wherein it has been held that........... Thus, as per above mentioned binding decision of Special Bench of ITAT, adjustments made by the TPO on account of ALP in the instant case can be deleted in present proceedings only if the Hon'ble Bench is satisfied an....
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.... business segments i.e. AMC service provider and agency market and support services provider the transfer pricing adjustment made by the TPO by considering both the segments as a single segment for the year under consideration is to be revisited. In the light of the order of the Tribunal for the AY 2007-08 and the submissions of the Ld. Counsel for the Assessee, in principle we agree that the assessee s having two segments are observed by the Tribunal in assessee's own case for the immediately preceding assessment year and, therefore, since the assessee is having segmental account the benchmarking has to be done segment wise separately and thus we direct the TPO to analyze the submissions of the assessee viz-a-viz the segmental accounts and the comparables and pass appropriate order after providing opportunities to the Assessee. 6. In case the PLI of the assessee as tested party as per the segmental accounts is 17.95% and average result of comparable companies is 19.63% and is within permissible tolerance range as per proviso to 92C(2), then no transfer pricing adjustment is called for by the TPO. With these observations we restore this issue to TPO for limited purpose of ....