2026 (7) TMI 599

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....tion Penal (DRP) dated 09.05.2024 for assessment year (AY) 2020-21. The assessee has raised following grounds of appeal: "1. erred in making transfer pricing adjustment of INR 46,88, 168 to total income declared by Appellant. 2. erred in not providing copy of reference made to Ld. TPO despite specific request. 3. erred in not accepting the economic analysis undertaken by the Assessee in accordance with provisions of the Act read with the Rules. 4 erred in re-characterizing reimbursement received from Associated Enterprises to be part of stability testing services without indicating any basis for such presumption and erred in charging same mark-up on cost-to-cost reimbursement. 5. Without prejudic....

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....her hand, the learned Senior departmental representative (Ld. Sr. DR) for the revenue supported the order of AO / TPO. The ld. SR DR for the Revenue submits that assessee has not disputed most appropriate method before TPO. The ratio of decision relied by ld. AR of the assessee is not applicable on the facts of the present case. 4. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We find that assessee is a company engaged in conducting stability studies for group companies located outside India. The assessee operates on cost plus model. The assessee filed its return on A.Y. 2020-21 declaring income of Rs. 7.60 crore. During assessment, the assessing officer note....

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....2.60 crore from its AE namely Teva Pharmaceutical Industries Ltd., Israel towards salary and travel cost of five employees deputed on AEs location for on-site work and has recovered salary and travel cost on cost basis. This transaction is reported by assessee in its TPSR. The assessee also explained the working of employees deputed and submitted that they are recovered the amount from AE on cost-to-cost basis. The assessee or the home country was not responsible for the work done by these employees during deputation period. The assessee also explained that the entered in Advance Pricing Agreement (APA) with CBDT for FY 2013-14 to FY 2017-18. The ALP was negotiated under APA for recovery of expenses states that if the recovery of expenses r....