TaxTMI 
TaxTMI 
2020 (5) TMI 759
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....the powers vested under section 251(1)(c) of the Act and settled judicial precedents. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not allowing legal claim of depreciation on goodwill under section 32 of the Act. 3. Even otherwise, on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating that appellant was entitled to claim depreciation on goodwill which is an 'intangible asset' under section 32 of the Act. GROUNDS RELATING TO TRANSFER PRICING ADDITIONS 4. That on facts and in law, the Learned CIT (A) has erred in confirming that the Learned TPO has discharged his statutory onus by establishing that the conditions specified in clause (a) to (d) of Section 92C (3) of the Act have been satisfied before disregarding the arm's length price determined by the Appellant and proceeding to determine the arm's length price himself. 5. The Learned CIT (A) has grossly erred in contending that no proper evidence was submitted by the Appellant to prove that certain intra group services were actually availed by the Appellant, undermining the reasonablen....
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....ed transactions. The Learned CIT(A) has not made any efforts to identify comparable uncontrolled transactions, in the absence of which, the CUP method cannot be applied above grounds are independent and without prejudice to each other." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : M/s. Cargill India Private Ltd., the taxpayer, incorporated on April 12, 1996 is into trading of agricultural commodities and processed foods, such as, wheat, corn, soyameal, etc. and processing and sale of refined oil. The taxpayer has also set up an Overseas Trading Branch (OTB) in Singapore in 1998 after obtaining the prior approval from the Reserve Bank of India (RBI). The taxpayer is part of the Cargill Group which is an international marketer, processor and distributor of agricultural, food, industrial and financial products. The taxpayer provides distinctive customer solutions in supply chain management, food applications and health & nutrition. 3. The taxpayer in its transfer pricing study classified its international transactions into 3 categories viz. (i) physical trade which included purchase of oil and wheat and sale of sugar, soyameal, corn and....
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....business support services TNMM using Operating Profit as a PLI Operating Cost 2038228+3516738+ 4201533+2587274 Purchase of fixed assets CUP 193450 Provision of liaison support services (commission agency services to CISA) CUP 15771999 Provision of marketing support services TNMM using Operating Profit as a PLI Operating Cost 3227820 Provision of support services TNMM using Operating Profit as a PLI Operating Cost 5834832 Availing of brokerages/ commission agency services CUP 835992 Receipt of interest CUP 7795 Receipt of handling income No benchmarking required 7634604 Cost sharing/ recharge by AEs No benchmarking required 7721643+21206453+ 1560534+6660786+219111+31336 Provision of other support services TNMM using Operating Profit as a PLI Operating Cost 1431869+3516738 Write back to excess provision No benchmarking required 208794 Demurrage expenses No benchmarking required 20204479+2066934+159814 Dispatch Income No benchmarking required 8068541+213171 ....
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....nature, tangible benefit accruing to the taxpayer has not been established and that there is no need for procuring such services, thus arbitrarily fixed ALP of administrative services and cost reimbursed at 30% of the value and 70% of the same has been directed to be adjusted. 8. However, on the other hand, ld. DR for the Revenue supported the orders passed by the AO/TPO/CIT(A) and contended that the assessee is to satisfy the TPO that services have been rendered. 9. Undisputedly, during the course of first appellate proceedings, the taxpayer has filed additional evidence qua intra group services received from its AEs qua which remand report was called. In the remand report, ld. TPO divided the services received by the taxpayer as under ;- S. No. Services 1 Administrative Services 2 Corporate IT & other service 3 Treasury Services 4 Admin & Tech training 5 Brokerage services 6 Other services 7 Software Sharing 10. A remand report itself shows that plethora of evidence has been brought on record by the taxpayer to prove the receipt of the intra group services received from the AE but TPO, without making any cogent comment on t....
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....to hold that brokerage services are in the nature of duplicative of services / incidental services and not supported by proper evidence. 15. In case of "other services", the taxpayer was also charged for one-off services provided by Cargill BV, Cargill BA-Cargill PLC Cargill SRL and Cargill Agri Purina Inc. for Rs.86,40,242/ -. Ld. TPO determined the ALP of other services at nil by observing that from the details of evidence submitted by the taxpayer, most of it is irrelevant since it consists of invoices and simply filing of invoices cannot be considered services rendered. Ld. CIT (A) also upheld the findings returned by the TPO by holding that other services are in the nature of duplicative/incidental services and are not supported by proper evidence. 16. In case of software sharing services of the value of Rs.15,60,534/-, ld. TPO again determined the ALP of the services at nil on the ground that the taxpayer has failed to bring on record any basis to claim that it is sharing the trading terminals and it has not shown what kind of project work has been undertaken and even HR services that it refers to. Ld. CIT (A) again upheld the findings of the ld. TPO by holding that the....