TaxTMI 
TaxTMI 
2026 (6) TMI 38
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....s to be quashed 2. In law and in facts and in the circumstances of the case, the final assessment order is issued beyond the time limit as prescribed under section 153 of the Act. Consequently. the final assessment order is barred by limitations and deserves to be quashed. Transfer pricing adjustment: 3. The learned Assessment Unit, Income Tax Department ("the Assessing Officer or "AO") Deputy Commissioner of Income Tax, Transfer Pricing 2, Ahmedabad (Transfer Pricing Officer" or "TPO") / Commissioner of Income Tax (DRP-2), Mumbai 1 ("Dispute Resolution Panel" or "DRP") erred in fact and in law in making an aggregate transfer pricing ("TP") adjustment of Rs. 17.11.13,551/- without appreciating the facts and provision of the law in respect of the following international transaction of intra-group services availed by the Appellant from Associated Enterprises ("AES") viz. INEOS Styrolution Group GmbH ("INEOS Germany") and INEOS Styrolution APAC Pte. Ltd. ("INEOS Singapore"): Sr. No. Particulars Adjustment(Rs.) 1 Global Head Office ("GHO") Non-IT services availed from INEOS Germany 7,11,17,906 2 GHO IT services availed from INEOS Germa....
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.... 12. The learned AO / TPO / DRP erred in fact and in law in determining the arm's length price for all intra-group services (except Global Technology and Operations ('GTO') under GHO service charges) at NIL by applying "Other Method" under section 92C of the Act read with Rule 10AB / 10B(1) of Rules. 13. The learned AO / TPO / DRP erred in fact and in law in making the impugned TP adjustments by following the findings of DRP for AY 2017-18 and AY 2018-19 on identical issues despite of the fact that in the same years the Hon'ble Gujarat High Court and ITAT, Ahmedabad has deleted the TP adjustments. Other Grounds: 14. The learned AO erred in fact and in law in initiating the penalty proceedings under section 270A of the Act for under-reporting of income without appreciating that in view of the provision of section 270A(6), there warrant no justification for initiating penalty proceedings u/s 270A of the Act. 15. The learned AO has erred in law and in fact making addition of Rs. 2,71,183 u/s 36(1)(va) of the Act by relying on the Intimation u/s 143(1) of the Act despite of the fact that the same was duly paid within the prescribed statu....
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....observed that the assessee had claimed to have received various centralized services from its overseas group entities including services relating to chief executive management, finance and treasury, global strategy support, procurement assistance, regulatory affairs, technology and operations support, engineering and project management, corporate communication, legal support, human resources and IT support services. The assessee submitted that these services were rendered under a centralized multinational structure and that the overseas group entities had deployed managerial and technical expertise for the benefit of all group entities including the Indian entity. The assessee further contended that the payments had been benchmarked under the Transactional Net Margin Method ("TNMM") by treating the overseas service provider as the tested party and by comparing the net cost-plus margins earned by comparable independent enterprises. 6. However, the TPO was not satisfied with the benchmarking analysis and the evidences furnished by the assessee. According to the TPO, the assessee failed to establish the actual rendition of services and the commensurate economic benefit derived ther....
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....bjected to the proposed transfer pricing adjustment before the Dispute Resolution Panel ("DRP"), Mumbai. 10. The assessee carried the matter before the Dispute Resolution Panel ("DRP") and filed objections against the transfer pricing adjustment of Rs. 17,11,13,551/- proposed by the TPO in respect of intra-group services availed from its Associated Enterprises. The assessee submitted before the DRP that the TPO had proceeded on an erroneous premise that no services had been rendered by the overseas group entities and that the entire adjustment had been made without properly appreciating the nature of the multinational business structure of the INEOS Styrolution Group. The assessee contended that the assessee was part of a globally integrated business model wherein centralized managerial, technical, financial, operational and IT support services were rendered by group entities for the benefit of all operating subsidiaries including the Indian entity. 11. The assessee submitted before the DRP that the impugned payments related to Global Head Office ("GHO") non-IT services, GHO IT services and Regional Head Office ("RHO") services rendered by the overseas Associated Enterprises.....
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....he existence of incidental shareholder benefit does not automatically lead to the conclusion that no independent service had been rendered to the assessee. 15. The DRP also took note of the fact that similar issues had arisen in the assessee's own case in earlier assessment years and that relief had been granted by the Tribunal after considering substantially similar facts and evidences. However, despite recording the aforesaid observations, the DRP upheld the action of the TPO in substantial measure. The DRP held that according to the material produced before it, the assessee had not fully established the direct and quantifiable economic benefit arising from all components of the services for which payments had been made. The DRP therefore sustained the transfer pricing adjustment proposed by the TPO amounting to Rs. 17,11,13,551/- comprising Rs. 7,11,17,906/- towards GHO non-IT services Rs. 43,19,415/- towards GHO IT services and Rs. 9,56,76,320/- towards RHO services. Consequently, the Assessing Officer passed the final assessment order incorporating the adjustment sustained by the DRP. 16. The assessee is in appeal before us against the final assessment order passed by th....
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....P itself accepted that the issue stood covered by the earlier orders of the Tribunal and sustained the addition merely for the purpose of keeping the issue alive in further appeal. However, we find that subsequently the Hon'ble Gujarat High Court has affirmed the decisions of the Tribunal and dismissed the appeals filed by the Revenue. Therefore, the very foundation on which the DRP sustained the adjustment no longer survives. 22. We further find that while adjudicating identical controversy in assessee's own case for Assessment Years 2017-18 and 2018-19, the Coordinate Bench of the Tribunal deleted similar transfer pricing adjustments. The relevant observations of the Tribunal are reproduced hereunder: "The assessee has furnished detailed documentary evidences in support of actual rendition of services including agreements, emails, presentations, reports, cost allocation workings and operational support records. The TPO has proceeded merely on presumptions that the services are duplicative or shareholder activities without bringing any cogent material on record." 23. The Tribunal further observed: "Once the assessee demonstrates actual receipt of services a....