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2015 (8) TMI 610 - AT - Income TaxTransfer pricing adjustment - DRP deleted the ALP adjustment proposed by the AO - disallowance of payment of royalty and technical service fee to M/s. Kirby Building Systems, Kuwait analysed under the provisions of transfer pricing - Held that:- The assessee had entered into international transactions for payment of royalty and fee for technical services vide agreement dated 1.4.2000. Further we find that this agreement had undergone several amendments and the assessee had started paying royalty only from the P.Y 2005-06 onwards. Therefore, the ALP adjustment of these transactions has arisen only from P.Y 2005-06 onwards. This Tribunal, in assessee’s own case for A.Ys 2006-07 onwards, had considered this issue at length and had come to the conclusion that it is not required by the assessee to demonstrate that payment of royalty is justified as such agreements are periodically approved by the RBI and by the Ministry of Industries and the assessee was paying the amount as per the agreements. For coming to the conclusion, the Tribunal relied upon the decision of the Hon’ble Delhi High Court in the case of CIT vs. EKL Appliances (2012 (4) TMI 346 - DELHI HIGH COURT). This decision of the Tribunal was also followed by the Coordinate Bench of this Tribunal in assessee’s own case for A.Ys 2008-09 and 2009-10 holding that the royalty paid by the assessee was at ALP. DRP has only followed the decision of the ITAT in assessee’s own case for earlier A.Ys. As the DRP has only followed the precedent on the issue in the assessee’s own case and has accordingly issued directions to the AO and the assessment order is in consonance with such directions of the DRP, we do not find any reason to interfere with the same. - Decided against revenue.
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