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2016 (2) TMI 1306 - AT - Income TaxAddition on account of transfer pricing adjustment on the international transaction of ‘Payment of Corporate expenses.’ - assessee has submitted an application under Rule 29 of the Income-tax Appellate Tribunal Rules, 1963, filing additional evidence - AR contended that these documents could not be filed before the authorities below because of their non-availability from its AEs at the material point - HELD THAT:- As observed that similar position prevailed in the assessment of the immediately preceding assessment year, namely, 2008-09. The assessee filed additional evidence before the Tribunal in support of its claim on the disallowance of payment of ‘Corporate expenses.’ The Tribunal vide its [2014 (9) TMI 517 - ITAT DELHI] order dated 29.8.2014 in ITA No.5765/Del/2012, has admitted the additional evidence and remitted the matter to the file of AO/TPO for a fresh determination of the ALP of this international transaction in the light of such additional evidence. A copy of such order has been placed on record. In the absence of any distinguishing feature in the facts of the instant year vis-à-vis the preceding year and respectfully following the precedent, we also admit the additional evidence and send the matter back to the file of AO/TPO for fresh determination of the ALP of this international transaction, after allowing a reasonable opportunity of being heard in the light of the additional evidence filed before us. Transfer pricing adjustment on the international transaction of ‘Payment of Royalty’ - payment akin to the payment of fees for the use of technical know-how - HELD THAT:- TPO proposed the transfer pricing adjustment with Nil ALP of the international transaction of `Payment of royalty’ on the ground that no such payment was warranted and further no cost benefit analysis on this count was brought to his notice and as such the payment of royalty was not required. AO in his final assessment order dated 26.12.2013 has taken the ALP at Nil on the basis of recommendation of the TPO without carrying out any independent investigation in terms of the deductibility or otherwise of such payment in terms of section 37(1) of the Act. As per the ratio decidendi of Cushman & Wakefield India (P.) Ltd. [2014 (5) TMI 897 - DELHI HIGH COURT the TPO was required to simply determine the ALP of this transaction unconcerned with the fact, if any benefit accrued to the assessee and thereafter, it was for the AO to decide the deductibility of this amount u/s 37(1) of the Act. Since the authorities below have acted in contradiction to the ratio laid down in Cushman & Wakefield (supra), we set aside the impugned order on this score and remit the matter to the file of AO/TPO for deciding it in conformity with the law laid down by the Hon'ble jurisdictional High Court in the case of Cushman & Wakefield (India) (P.) Ltd. (supra). Disallowance u/s 14A as per Rule 8D - AO made disallowance @ 0.5% of the average investments, which resulted into addition - HELD THAT:- Having regard to the facts of the instant case and the submissions advanced on behalf of the assessee about the confirmation of similar disallowance u/s 14A by the tribunal for the immediately preceding year @ 0.5% of the average value of investments in terms of Rule 8D(2)(iii), we approve the action of the AO in making the disallowance to this extent alone. This ground fails.
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