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2017 (8) TMI 642 - AT - Income TaxTransfer pricing adjustment - whether the payment made by the assessee under the head management service should be allowed or not? - TPO and DRP sustained the additions even after 2nd round of proceedings - DRP observed that, TPO had rightly rejected the TNM method, that intra group services had to be benchmarked separately, that the TPO had rightly applied the CUP method, that the evidences produced by the assessee indicated that some incidental benefit might have been accrued to it. Held that:- while deciding the ALP of umbrella of services what has to considered is the right of assessee that it is entitled to avail. If it avails only a few services out of the boquet of services the TPO should not reject the TP study of the assessee on the ground that it did not avail all the services or the majority of services as mentioned in the agreement. Availing selected services from a composite agreement is sufficient for claiming the deduction. For rejecting the TP study of the assessee the TPO should prove that price shown by the assessee from the services availed was not at arm’s length. Non-availing of services cannot be the basis for rejecting the claim. These are two different things and are fundamentally separate. In the case under consideration the TPO or the DRP has not stated that payment made by the assessee to its AE were not at Arm’s length. Therefore, we decide the first ground of appeal in favour of the assessee. Addition on account of non reconciliation of TDS statement and the computation of income -Held that:- Before us, the AR stated that due to mistakes committed by some of the deductors of tax mismatch of income had occurred, that proper verification was not done by the AO in that regard. The DR stated that the issue could be decided on merits. In our opinion, in the interest of justice matter should be remanded back to the file of the AO for fresh adjudication. He is directed to afford a reasonable opportunity of hearing to the assessee. The assessee would submit all the necessary documents to reconcile the TDS statement with computation of income. Second ground of appeal is decided in favour of the assessee, in part.
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