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2023 (4) TMI 522 - AT - Income TaxTP Adjustment - intra/group services in the nature of management services - determining the value of the international transaction relating to management services availed from the associated enterprises at Nil - HELD THAT:- This is not the first year wherein the assessee received such services and made payment to the AE. The TPO himself has referred to similar nature of transaction made in assessment years 2012-13, 2013-14 and 2014-15. Thus, the assessee has made payment towards identical nature of transaction in various assessment years including assessment year 2011-12. In fact, DRP has referred to similar transaction in assessment year 2011-12. Notably, while deciding identical issue in assessee’s case in assessment years 2007-08, 2009-10, 2010-11, 2011-12 and 2012-13 [2019 (2) TMI 796 - ITAT DELHI] the coordinate Bench, deleted identical additions stating TPO accepted that services were rendered and received by the assessee. Once the rendering and receiving of the services were not disputed which is supported by the evidences, the TPO is not correct in holding that arms length value of the management fee is Nil and accordingly making an upward adjustment. Therefore, the finding of the TPO is not correct and this addition does not sustain. DRP ignored the evidences filed by the assessee demonstrating receipt of management services by merely stating that the assessee failed the benefit test. As per settled judicial principles the departmental authorities are not competent to apply the benefit test to determine the value of a transaction entered with the AE at Nil. See Avery Dennison (India) Pvt. Ltd [2016 (9) TMI 244 - DELHI HIGH COURT] - Adjustment made by the TPO by determining the arm’s length price of the management services at nil is unsustainable. Accordingly, we direct the Assessing Officer to delete the addition. Decided in favour of assessee.
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