Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (3) TMI 34 - AT - Income TaxTP Adjustment - Allowability of intergroup payment of management fees - principle of consistency - CIT(A) has partly allowed the claim of assessee - main contention of the A.R. is that the issue is already decided by this Tribunal in favour of the Assessee in earlier Assessment Years and the same to be followed - HELD THAT:- As various Courts/Tribunals have held that each year is distinct and different and it is to be governed by facts and circumstances of each year. Thus, the assessee contention that no adjustment in the current year is to be made on the issue of services because in earlier years no adjustment was made is of no consequence because in the case of intra Group Services, assessee has to establish receipt of services with convincing evidence/details for each year, which assessee has failed to prove and accordingly its case cannot be taken as precedent from earlier years decision. On going through the order of the TPO/AO which is speaking and detailed one, and based on the above discussion on evidences filed, it is absolutely clear that the assessee has failed to prove the rendition of services and the TPO/AO has rightly taken the ALP as nil on account of Assessee’s failure to prove receipt of services along with the benefit received by assessee. Though the Need/ Benefit Test has been accepted as the valid ground for benchmarking of IGS by several authorities, but the disallowance has been made primarily on the rendition of services. Assessee has also stated that the TPO/AO cannot question the need or the benefit achieved by the assessee from services given by AE. As found that, though the TPO/has mentioned/asked about the benefit received, however the disallowance was mainly based on the assessee failure to prove the rendering receipt of services. It is surprising that though the assessee has relied on OECD guidelines, but at the same time it is forgetting that the OECD guidelines clearly provides for Benefit Test for payment of intra group services and also the benefit test is duly recognized as several countries as mentioned by TPO/OECD in its commentary. There is absolutely no rendering/receipt of services and the assessee has miserably failed to discharge the onus of providing the basic evidences with regard to so called services received from AE. Thus, the Assessee’s appeal on this grounds deserves to be rejected and the grounds raised by the Revenue to be allowed on this issue. Interest on outstanding receivables from the AE - international transaction or not? - AO/TPO made addition by applying interest rate of 12.6% on account of interest on delayed receivables - HELD THAT:- The issue in hand has to be decided in favour of the assessee, following the ratio laid down by the Tribunal in earlier year for assessment year 2009-10 [2020 (2) TMI 1567 - ITAT DELHI] to delete the addition on account of interest outstanding receivables as held conclusion in the explanation to section 92B of the Act of the expiration receivables does not mean that de hors the context every item of receivables appearing in the accounts of an entity which may have dealings with the foreign AEs would be characterised as an international transaction. There may be a delay in collection of monies for supplies made, even beyond the agreed limit, due to a variety of facts which will have to be investigated on a case to case basis. Importantly, the impact this would have on the working capital of the assessee will have to be studied. Therefore, the ground raised is to be decided in favour of the Assessee.
|