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2021 (12) TMI 936 - AT - Income TaxTP Adjustment - ALP of international transactions with its AE - reclassification of the assessee’s business profile from contract marketing service provider to a full-fledged technical/business support service provider - HELD THAT:- The entire international transaction of the assessee was based on the agreement dated 8.8.1994 with its AE i.e. Parametric Holdings Inc. Parametric India is engaged in marketing and support services in India on behalf of its AE. On this basis, the international transactions have taken place - TPO in the impugned assessment order observed that the services provided by the taxpayer to the AE are in the nature of marketing support services. However, while making the TP adjustment, he changed the business profile of the assessee recorded of the TP order. Contrary to this, he reclassified the assessee’s business profile from contract marketing service provider to a full-fledged technical/business support service provider only on the reason that the assessee has not furnished proper bifurcation of employees involved in the two activities. In our opinion, this cannot be a reason to reclassify the business profile of the assessee. The engineers could have been appointed to carry out some work in the field of marketing services. There is no prohibition on this count. The assessee is not disentitled to appoint engineers for carrying out the marketing services with regard to international transactions to its AE. Since judicial discipline requires consistency in its proceedings from year to year, the business profile of the assessee cannot be changed from year to year wherein the all the international transactions of the assessee are based on the same agreement dated 8.8.1994 with its AE. Being so, in our opinion, it is appropriate to vacate the findings of the revenue authorities on this count and allow the grounds taken by the assessee. Accordingly this ground is allowed.
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