TaxTMI 
TaxTMI 
2026 (6) TMI 725
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....tries across the globe. During the relevant Assessment Year (' AY') 2012-13 under consideration, EIL is engaged in the business of trading, manufacturing/assembly of telecommunication carrier equipment for sale to independent customers, providing implementation, commissioning and support services related to telecommunication systems and contract telecommunication software development services. 2.1 The appellant filed its income tax return declaring an income of INR 3,91,38,33,940/- on November 29, 2012. During the course of assessment proceedings, the appellant's case was referred to the Deputy Commissioner of Income Tax, Transfer Pricing Officer, Circle 1(2)(2), New Delhi, (Ld. TPO). The Ld. TO while accepting all international transactions undertaken by the Appellant to be at arm's length under TMM, ascertained the arm's length price for Second Line Support ('SLS') services received by the appellant from its AEs to NIL. Based on the same, the Ld. TPO issued directions dated November 18, 2016 proposing an adjustment of INR 15,77,01,789. The Ld. AO relied upon the Ld. TPO's order and passed a draft assessment order as provided u/s 144C (1) of the ....
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....t basic level, maintenance services consist of network performance checks, ensuring that the network is operating to its full potential. At its most complex level, this service area extends to complete management of an outsourced network - from site acquisition to full end-to-end service assurance. The above system support services are extremely critical for the customers of EIL, as faults in the systems (especially of emergency nature) can prove to be very costly for the customer/ operator. All routine maintenance and repair services are undertaken by EIL using its own personnel. However, to take care of complicated technical problems, EIL utilises the services of the AEs. Further, in case of high-end technical support relating to repair of hardware/software, EIL obtains the same from the As manufacturer of the equipment. Further, for technical emergency services, EIL has round-the-clock access to help desk services from the AEs. The AEs also provide warranty support services to EIL wherever EIL gives warranty to its end-customers. With regard to the aforementioned function, the underlying technology, process, platform/ application etc. have been developed by the....
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.... (refer assessment order at page 686 of PB, Vol 2) 9. 2015-16 Allowed (Refer assessment order at page 691 of PB, Vol 2) 10. 2016-17 Allowed (refer assessment order at page 698 of PB, Vol 2) 11. 2017-18 Allowed 12. 2018-19 13. 2019-20 7.1 Thus based on the principle of consistency, alone the disallowance made by the AO/DRP should be deleted. 7.2 Reliance in this regard reliance is further placed by the ld. Counsel on the decision of the Tribunal in Appellant's own case for AY 2007-08, wherein it was held as under: "29. We have carefully considered the rival submissions in the light of material placed before us. The facts have already been discussed in detail in the above part of this order. Mainly it is the case of the Revenue that assessee does not require to make any payment with regard to Second Line Support (SLS) obtained by it from its AE. As against that it is the case of the assessee that SLS services have been availed to minimum level where the assessee on its own is not able to resolve the problem as most of the problems have been resolved at the level of the assessee. It has been submitted that during the rele....
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.... functioning of the instrument are efficiently resolved. That decision of the assessee is business expediency of the assessee so that the customers to whom the instruments have been supplied remain satisfied about the functioning of the equipment. Therefore, we find no force in the claim of the Revenue that for availing these services the assessee was not required to make any payment. The assessee has the right to enter into an arrangement according to which its business interests are protected and for protection of such interests of the business of the assessee, it has entered into an agreement with its AE. To hold that is the prerogative of the assessee to see and decide the business expediency, the reference can be made to the decision of Hon'ble Delhi High Court referred to by learned AR in the case of CIT vS.EKLAppliances Ltd. (supra) wherein their Lordships have observed that even Rule 108(1)(a) does not authorize disallowance of any expendtture on the ground that i was not necessary or prudent for the assessee to have incurred the same or that in view of the expenditure was unremunerative or that in view of the continued losses suffered by the assessee in his bu....