2023 (3) TMI 778 - AT - Income Tax

TP adjustment - payment of cost allocation charges towards Central & Regional Support Services and Business Support Services - HELD THAT:- Once availing of various services from the associated enterprise is duly substantiated by the documentary evidence and the cost allocation among the group companies is also on the basis of a well-accepted allocation key method, we find no basis in upholding the transfer pricing adjustment made by the TPO/AO. Accordingly, the AO is directed to delete the transfer pricing adjustment on account of payment of cost allocation charges towards Central & Regional Support Services and Business Support Services. As a result, grounds no.2 and 4 raised in assessee’s appeal are allowed.

TP Adjustment on account of payment of cost allocation charges towards Software Development and other IT services - HELD THAT:- As once availing of various services from the associated enterprise is duly substantiated by the documentary evidence and the cost allocation among the group companies is also on a cost-to-cost basis, we find no reason to uphold the transfer pricing adjustment made by the TPO/AO. Accordingly, the AO is directed to delete the transfer pricing adjustment on account of payment of cost allocation charges towards Software Development and other IT services. Ground no.3 raised in assessee’s appeal are allowed.

TP Adjustment on account of payment made for availing Investment Advisory Services - HELD THAT:- As it is evident that the assessee has not only proved the receipt of services from the associated enterprise but also provided the details of the benefit received by it from the Investment Advisory Services received from the associated enterprise. Therefore, in view of the above, we find no basis for upholding the transfer pricing adjustment made by the TPO/AO. Accordingly, the AO is directed to delete the transfer pricing adjustment on account of payment made for availing of Investment Advisory Services. As a result, ground no.5 raised in assessee’s appeal is allowed.