TaxTMI 
TaxTMI 
2026 (7) TMI 1592
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....ised by the assessee in respect of AO/TPO erring in making a transfer pricing adjustment of Rs. 45,02,173/- in relation to payment of IGS including mark-up on third-party cost of ITSS. 3. We have heard rival submissions and perused the materials available on record. We find that the issue is recuring issue, which is decided by Co-ordinate Bench in assessee's own case in ITA No.2565/Kol/2024 for A.Y. 2021-22, dated 05.12.2025, wherein the Co-ordinate Bench has decided the issue in favour of the assessee by following the decision in A.Y. 2016-17 and 2017-18 in assessee's own case. The operative part of the order is extracted below: "2.5 After hearing the rival contentions and perusing the materials on records, we find that the iss....
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....onclusion that the Ld. TPO and Hon'ble DRP were in error in holding that the nature of services rendered by AE were in the nature of stewardship activity or shareholder activity, we hold that the TPO's conclusion that no charges ought to have been paid by the Assessee is without any basis. After considering all the evidences submitted by the Assessee and various judicial precedents relied on the Ld. Counsel, we conclude that the charges paid by the Assessee to AE are held to be at Arm's Length. Consequently, the addition made by the revenue authorities in this regard are directed to be deleted and relevant grounds raised on this issue are allowed." (Emphasis supplied) 2.6 Even on the rule of consistency the ground raise....
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....y and using the net cost plus as the profit level indicators. We note that the Department has consistently accepted the TNMM applied by the appellant for benchmarking of marketing support services right from A.Y.s 2011-12 to 2018-19. Since there is no change in the facts and circumstances during the year, vis-à-vis the earlier assessment years, we are inclined to follow the order passed in the previous years. For ready reference, the operative part of the decision in A.Y. 2021-22, which is extracted below: "3.1 The facts relating the issue are that during the year under consideration, TDK India provided marketing support services to its AEs for sell of TDK Group products in India. The business is conducted as a direct busine....
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....ed by TPO - No adjustment done TNMM 7. 2017-18 Adjustment deleted by TPO post DRP Direction TNMM 8. 2018-19 Adjustment deleted by TPO post DRP Direction TNMM 3.2 The Ld. DRP dismissed the appellant's plea of following the rule of consistency as the facts were similar, by stating that rule of consistency is applicable only in respect of "accounting principles." However, they directed the TPO to broaden his search to more comparables agreements. In accordance with the direction of Hon'ble DRP, the Ld. TPO added one more non-comparable agreement and determined the arm's length price of the international transaction under consideration. 3.3 The ld AR submitted that Rule of Consistency sho....
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....ation. Products are different: The Appellant deals in capacitors and ferrites. One of TPO's agreement deals in LED Lighting Solutions/Technologies. The other agreement deals with use of trade name, trade mark etc. and not for marketing of products. Remuneration model is different: The appellant has a cost-plus model, whereas the agreement selected by the Ld. TPO have a percentage of sales model of remuneration. 3.4 The DR could not controvert the above differences but relied on the order of the DRP. Without prejudice to the above on merit, it was submitted that TNMM has been consistently accepted as the method for benchmarking marketing support services, the same should be followed, especially since the TPO/DRP have not given a....
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....ion comparability, which is not met in the instant case for the reasons cited by the learned AR before us. The case of the assessee is squarely covered by the decisions as cited above by the learned AR. Consequently, we set aside the order of DRP and direct the AO /TPO to delete the addition. The grounds no. 17 to 23 are allowed." 7. Considering the facts and circumstances of the instant appeal and the decision of the Co-ordinate Bench as discussed above direct the AO/TPO to delete the addition. Accordingly, second issue raised by the assessee in respect of marketing support services is allowed. 8. Third issue raised by the assessee in respect of late deposit of employee's contribution to ESI to the tune of Rs. 17,838/-. 9. After h....