TaxTMI 
TaxTMI 
2026 (6) TMI 606
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.... 2. That on the facts and circumstances of the case and in law, the Ld. AO has erred in assessing the total income of the Appellant under Section 143(3) read with section 144C(13) and section 144B of the Income-tax Act, 1961, for AY 2020-21, at INR 75,18,44,091 as against the income reported in the return of income ("ROI") amounting to IN 63,39,49,430. 3. That the Ld. AO/ Learned Deputy/ Assistant Commissioner of Income-tax, Transfer Pricing Officer- 2(1)(1) ("Ld. TPO"/ Learned Dispute Resolution Panel ("Ld. DRP") have erred in enhancing the income of the Appellant by IN 6,89,10,495 in relation to payment of management charges to its AEs. In doing so, Ld. AO/ Ld. TPO/ Ld. DRP have grossly erred in: 3.1. rejecting the aggregation approach adopted by the Appellant to benchmark its international transactions in the TP documentation maintained in terms of section 92D of the Act read with Rule 10D of the Income-tax Rules, 1962 ("the Rules"); 3.2. contravening the conditions laid in Section 92C(3)(c) of the Act, by citing incongruous reasons to allege that the Appellant has not derived any tangible or direct benefit from management services and has failed....
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.... its AEs are on a principal-to-principal basis, and also driven by open market conditions just as sales made to unrelated parties; 5.5. holding that the benefit of producing goods by the Assessee is reaped by the AEs; 5.6. reducing the arm's length price ("ALP") on this account to Nil, thereby depriving the licensor i.e., Gates Corporation, of its right to earn return on these sales in return for the research and development investments made over the years; 5.7. not considering that identical payment of royalty on account of sales made by sister concern of the Assessee to foreign AEs was held to be allowable by the Indian Revenue Authorities. 6. That on the facts and circumstances of the case and in law, the Ld. TPO/ Ld. AO/ Ld. DRP have erred in enhancing the income of the Assessee by IN 72,08,000 on account of payment of royalty in relation to sales made by the Assessee to third parties. In doing so, Ld. TPO/ Ld. AO/Ld. DRP have grossly erred in: 6.1. rejecting the aggregation approach adopted by the Assessee to benchmark its international transactions in the TP documentation maintained in terms of section 92D of the Act read with ....
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....t the employees contribution with respect to PF & ESI was delayed by 1-4 days only as the due date of deposit prescribed under PF & ESI Act was falling on Sunday/ gazetted holiday or during the peak COVID-19 lockdown period, and the said delay is covered by the Section 10 of the General Clauses Act, 1977 as well as the Section 4 of the Limitation Act, 1963 as per which if any due date falls on a day when any Court or Income Tax Office is closed then such due date shall be the next working day when the Court or the Income tax Office reopens 8.2. The Ld. AO has failed to appreciate that amendments via Finance Act 2021 i.e. inserting Explanation 5 to section 43B of the Act and Explanation 2 to section 36(1)(va) of the Act were effective AY 2021-22 and onwards. 9. The Ld. NFAC has erred in facts and in law by non-grant of credit of regular assessment tax of INR 24,17,317. 10. That on the facts and circumstances of the case and in law, the Ld. AO has erred in charging interest under Section 234A, 234B and 234C of the Act. 11. That on the facts and circumstances of the case and in law, the Ld. AO has erred in initiating penalty proceedings under sectio....
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....ve. The Panel does not find any infirmity in the IPO's order and hence, is not inclined to intervene with it. Accordingly, the assessee's objections are rejected and the TPO's action is upheld. However, the TPO is directed to consider the assessee's contention that disregarding prior years favourable TP orders passed in Assessee's own case with respect to payment of management charges as the TPO has not recorded any observations on this issue in the order; by passing a speaking order." 22. Ostensibly, no independent reasons whatsoever have been cited by the DRP while upholding the action of the TPO. The DRP is completely swayed with the adjustment made by the TPO without objectively examining the factual matrix and applicability of CUP method in the light of judicial precedents and treating the value of services rendered at 'Nil'. Such arbitrary exercise by the DRP without showing any application of mind cannot be countenanced in any manner. The directions made are neither clear nor implemented by the TPO and TP adjustment earlier made was mechanically reiterated. 23. In the peculiar facts of the case and legal position analysed, the DRP direct....