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2020 (2) TMI 503 - ITAT MUMBAITP Adjustment - adjustment made to the arm's length price (ALP) of provision of Application engineering Service to the Associated Enterprises (AE) - Comparable selection - HELD THAT:- Assessee is into Application Engineering Service thus companies functionally dissimilar with that of assessee need to be deselected. Companies with extraordinary events relating to merger and amalgamation need to be deselected. Arm's length price of payment made to the AEs towards corporate fees - TPO disallowed the payment made towards Intra Group Services (Corporate Fee) primarily on the reason that the assessee failed to furnish required documentary evidences to show that it has received such services from the AEs and further, to show that it has been benefited by such services AND in an arm's length scenario, no independent party would have made such payment to another party - HELD THAT:- In the facts of the present case, though, the Transfer Pricing Officer has mentioned that CUP is the most appropriate method, however, it is very much clear that he has neither applied CUP method as per letter and spirit of rule 10B(1)(a) nor has followed any other prescribed method while determining the arm's length price at nil. In our considered opinion, the Transfer Pricing Officer is not authorized under the statute to do so. Therefore, the adjustment made by the Transfer Pricing Officer with regard to the arm's length price of the Corporate Fee cannot be sustained. Our aforesaid view is well supported by the judicial precedents cited by the learned Authorised Representative. As regards the contention of the learned Departmental Representative for restoring the issue to the Assessing Officer, we are of the view that there is no necessity to do so in the facts of the present case, as all the required evidences relating to the issue are already on record and have been considered by the Transfer Pricing Officer and learned DRP. In fact, after perusing the evidences available on record, learned DRP has recorded a categorical finding that receipt of service is ascertainable. Learned DRP has upheld the action of the Transfer Pricing Officer by merely observing that the benefits received by the assessee is not proved and further the assessee has not proved that such services were really required by the assessee. In our considered opinion, the aforesaid decision of the Revenue authorities cannot be upheld in view of the ratio laid in the judicial precedents cited before us. Accordingly, we delete the addition made on account of adjustment made to the arm's length price of Corporate Fee. Grounds are allowed. Levy of interest under section 234B and 234C, which is consequential in nature, hence, no adjudication is required.
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