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2019 (8) TMI 643 - AT - Income TaxTP adjustment - royalty payment for the use of tangibles - application of CUP method as a comparable uncontrolled transaction in comparable circumstances - HELD THAT:- We find it difficult to ignore the contention of the assessee has been that the assessee had a compounded annual growth rate of 31.31% from FY 2006-07 to FY 2012-13 and the sale had been rapidly growing over the past few years, whereas, the growth in royalty payment to Bain USA has been negligible in comparison at 1% on domestic Revenue and 2% on foreign Revenue (affecting royalty of 1.18%) paid to Bain USA, for there is no evidence to disprove the same. On a perusal of the result of the search carried out by the taxpayer from the SIA database summarised by the Ld. CIT(A) in his order at page No. 14 we are satisfied that the payment made by the assessee to Bain USA is far less than the list percentage paid by E.Merck (India) Ltd at 2%. Further as is evident from the order of the Ld. TPO at page No. 5, the Bain USA said to have provided the specialised expert eyes and vide spectrum of consulting capability which are running into dozens. On a careful consideration of all these services are enumerated by the Ld. TPO himself in his order and in the light of the decisions of Sony Ericsson [2015 (3) TMI 580 - DELHI HIGH COURT], AWB India private limited [2014 (11) TMI 284 - ITAT DELHI] and EKL appliances [2012 (4) TMI 346 - DELHI HIGH COURT] we are of the considered opinion that the Ld. TPO erred in applying the benefit test, in the absence of any dispute as to the actual payment or the provision of services by Bain USA at the disposal of the assessee by way of models at their website which the assessee accesses and applies as and when necessary. With this view of the matter where unable to agree with the Ld. DR that the Ld. CIT(A) committed any error in upholding the contention of the assessee and in deleting the addition made on the suggestion of the Ld. TPO. Uphold the reasoning given and conclusions reached by the Ld. CIT(A) in the impugned order. We accordingly conclude that these appeals are devoid of merits and are liable to be dismissed.
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