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2022 (3) TMI 1512 - AT - Income Tax
TP adjustment - adjustment made towards cost contribution charges - HELD THAT:- We notice that the coordinate bench of the Tribunal in the case of Ingersoll Rand India Ltd [2016 (4) TMI 202 - ITAT BANGALORE] has considered the similar issue wherein Tribunal has held the appeal in favour of the assessee by deleting the DRP adjustment made towards cost contribution charges.
As considered the submission of the Ld AR with respect to the cost contribution charges which is paid for cost allocation done by the group and that a similar cost is getting allocated to Ingersoll Rand India Ltd using the same allocation methodology. The contention of the Ld AR that the decision of the coordinate bench is applicable to the assessee’s case has merits. Decided in favour of assessee.
Treating cost construction charges as a separate class of transaction and applying CUP as the most appropriate method as against TNMM - Hon’ble Tribunal while rendering the decision in the case of Ingersoll Rand India Ltd (supra) has also addressed the issue of adopting CUP as the most appropriate method for the cost contribution charges - In assessee’s case the TPO has treated the cost contribution charges as a separate class of transaction quoting that there is no restriction that the TP should be done only at enterprise level and also on the basis that it is an intra group transaction. From the details of services and the benefits received from these services as submitted by the Ld AR, the payment made towards these charges are integral part of the core business of the assessee.
Thus we are of the considered view that the TPO is not justified in applying CUP is the most appropriate method for computing the ALP treating the cost contribution charges as the most appropriate method.
Disallowance made on non-production of invoices by the assessee - HELD THAT:- The assessee has produced as additional evidence, in the form of invoice copies before the Tribunal. The additional evidence now produced go to the root of the issue of disallowance - Invoice copies submitted by the assessee and taken as additional evidences require thorough examination to check the genuineness of the expenses and the allowability thereon. Hence, we remand the matter back to the AO - Grounds raised allowed in favour of the assessee for statistical purposes.