Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (9) TMI 1027 - AT - Income TaxTP Adjustment - availing of Marketing Services and Global Infrastructure Support Services - rule of consistency- HELD THAT:- AR has submitted that no such adjustment has been proposed in the subsequent years also. In the said factual matrix, it is difficult to accept the allegations of the revenue that no such services were rendered and the assessee derived no benefits by availing the said services. These services were being availed pursuant to common agreement entered into by the assessee in Financial Year 2008-09 and therefore, disputing the same only in one year while accepting the same in other years, would only reflect contradictory approach adopted by the revenue. TPO, rejected the assessee’s methodology by stressing upon benefit test by observing that the assessee could not establish the factum of receipt of services and also could not demonstrate the corresponding benefits received by the assessee by availing these services. The said services, in the opinion of TPO, could be obtained from an independent consultant in India at lower cost and further, the assessee already had requisite expertise which is further evidenced by the fact that the assessee was acquired by its AE owing to its domain expertise. However, as noted earlier, the said services have been received by the assessee pursuant to agreements entered in Financial Year 2008-09, which has been found to be at Arm’s Length Price in the earlier two assessment years. Secondly, it was not the jurisdiction of Ld. TPO to question the assessee’s commercial wisdom to avail services in a particular manner. The assessee had placed on record plethora of documentary evidences, as enumerated by us in para 5.4, in support of the fact that the services were actually received and benefits were derived. However, the same has been disregarded and brushed aside in a very light manner which could not be held to be justified. Another aspect to be noted is that Ld. TPO has determined ALP of the transactions as Nil without applying any of the methods prescribed u/s 92C of the Act to determine the ALP. It is evident that no transfer pricing exercise was done by Ld. TPO to determine the value of the services, whatever, received by the assessee. No comment has been made on correctness or appropriateness of assessee’s TP methodology. Therefore, the approach of Ld. TPO could not be said to be in accordance with the spirit of law. We are unable to pursued ourselves to sustain the action of revenue in sustaining impugned additions in the hands of assessee. Hence, by deleting the additions of ₹ 448.47 Lacs as made in the final assessment order, we allow Ground Nos. 1 to 7 of the appeal. The suo-moto disallowance of ₹ 534.49 Lacs as made by the assessee u/s 40(a)(ia) shall be allowable in accordance with law.
|