Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (5) TMI 1519 - AT - Income TaxTP Adjustment - TPO has accepted that the international transactions at "entity level" is at arm’s length - ALP of international transactions - A.R has contended that the TPO could not have benchmarked management fee paid by the assessee separately - HELD THAT:- It is well settled proposition of law that the ALP of international transactions could be determined by TPO under one of the prescribed methods only. However, in the instant case, TPO has applied benefit test and determined ALP of payment of management services as NIL. Hence the approach of the TPO is not in accordance with the mandate of law. When the assessee is making identical payment every year for identical services provided by AE and the revenue has taken a particular stand with regard to the services so provided by the AE, in our view, there is no scope for applying the principle of res-judicata in other years for this matter for taking different stand in others for the identical payments made by the assessee. It is not clear as to whether the decision rendered by AAR against the assessee has attained finality or not. Accordingly, on a conspectus of the matter, we are of the view that the issue relating to transfer pricing adjustment in respect of three types payments referred in the table issue needs to be examined in the light of contentions of the assessee discussed supra at the end of TPO/AO. Tax authorities should first examine the contention of the assessee that there is no requirement of making separate bench marking for these services, when they are aggregated and the ALP of international transactions were accepted to be at arm’s length. The AO/TPO should also take into consideration the decision rendered by AAR in the assessee's own case, if it has attained finality. After carrying out these exercises, if the AO/TPO comes to the conclusion that the bench marking is still required to be made, then the TPO shall determine ALP of these transactions under one of the prescribed methods only. The assessee shall be given adequate opportunity of being heard. Disallowance of write of loose tools - HELD THAT:- We notice that the co-ordinate bench of Tribunal has considered an identical issue in the assessee's own case in AY 2008-09 [2020 (12) TMI 387 - ITAT BANGALORE] - we set aside the order passed by Ld CIT(A) on this issue in AY 2012-13 and 2013-14 and direct the AO to delete this disallowance.
|