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2015 (11) TMI 1619 - HC - Income TaxAddition on account of fees for technical services - TPA - ALP determination - lowering of bench marking - Held that:- It is an undisputed position before us that the assessee is a wholly owned subsidiary of its parent company which is registered in Switzerland. The respondent pays to its parent company Royalty for use of its Trademark/brand name. Therefore, admittedly the present case is covered by Clause IV and not Clause III of the Press Note 9(2000 series). The aforesaid clause IV of the Press Note 9 (2000 series) allows payment of Royalty upto 8% on export sales by wholly owned subsidiaries to its offshore parent companies. On the last occasion that is on 23 September 2015 Revenue sought time to take instructions on whether Clause IV as reproduced hereinabove is applicable in the case of respondent assessee. Today Mr. Tejveer Singh, on instructions, states that the respondent assessee is covered by clause IV of the Press Note 9 (2000 series) dated 8 September 2000. Therefore, the bench marking of the Royalty paid at 3% by the respondent to arrive at the ALP is much below the Royalty for trade mark / brand name which is allowed to be paid by wholly owned subsidiary to its offshore parent company. The grievance of the Revenue that the Tribunal ought to have lowered the bench marking on application of Clause III of the Press Note 9 (2000 series) dated 8 September 2000 does not survive. Accordingly, question as proposed does not give rise to any substantial question of law. Thus not entertained. - Decided against revenue
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