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2023 (3) TMI 1023 - AT - Income TaxTP Adjustment - adjustment made to the international transaction of royalty paid by the assessee to the associate enterprise - benchmarking done by the assessee by adopting internal CUP - second round of litigation before the ITAT - assessee had paid royalty at the rate of 5% - HELD THAT:- It is a fact on record and has not been denied by the Revenue, that the assessee’s agreement for payment of royalty was for transfer of technology for assembling of entire vehicle and similarly also in the case of comparable selected by the assessee royalty was paid for transfer of technology for assembling of entire vehicles. The comparable selected by the Revenue on the other hand, are for transfer of technology for manufacturing of particular part of the vehicles. Surely technology for assembling vehicles and that for manufacturing a particular part cannot be the same. Merely because the technology for assembling cars and manufacture of parts relate to the same project does not mean that the technology transferred is the same. Apparently technology for assembling cars and that for manufacturing parts of car are different. At least this is what any layman would understand. Revenue has given no technical input as to how the two technologies are the same in the circumstance that they relate to the same project of vehicle manufactured/assembled. It is abundantly clear therefore that the comparable selected by the assessee is the correct comparable being payment of royalty for technology acquired for identical activity as availed by the assessee, while that of the TPO are for totally different activity We uphold the benchmarking done by the assessee by adopting internal CUP and delete the adjustment made to the ALP of royalty transaction - Ground raised by the assessee is allowed.
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