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2017 (11) TMI 715 - AT - Income TaxDetermination of ALP of the international transaction of AMP expenses - Held that:- Since the orders of the authorities below are not in conformity with the ratio laid down in Sony Ericsson (2015 (3) TMI 580 - DELHI HIGH COURT) as discussed above and further necessary details for doing this exercise at our end are also not available, we set aside the impugned order and send the matter back to the file of the TPO/AO for determining the ALP of the international transaction of AMP spend afresh in accordance with the manner laid down by the Hon’ble High Court in Sony Ericson Mobile (supra). International transaction of ‘Receipt of I.T. Support Services’ is required to be separately benchmarked, distinct from the international transactions of purchase etc. - Held that:- Since the view of the TPO as regards the receipt of no services etc. has been set aside by us, we remit the matter to the AO/TPO for determining the ALP of this international transaction afresh as per law after allowing a reasonable opportunity of being heard to the assessee. International transactions of ‘Procurement support’ and ‘Training services' - Held that:- On going through the nature of services given in this Annexure, it is manifested that the assessee was supposed to procure the goods from India and export it to the global production network of the BMW Group. For doing this, the assessee was carrying out supplier assessments to identify the most suitable supplier. The assessee was receiving proposal from the supplier and forwarding it to BMW AG for final assessment and approval. On such approval, the International Purchase Office (IPO) was working with the supplier to ensure compliance of BMW AG requirements. In so far as ‘Training services’ are concerned, a copy of the relevant agreement between the assessee and BMW AG is available on page 599 of the paper book. Preamble of the agreement provides that BMW AG entered into a contract with Satyam Venture Engineering Services for the provision of design and simulation services. Because Satyam was unfamiliar with BMW processes and tools, the assessee was assigned a duty to impart training to the employees of the Satyam for their utilization in complying with design and simulation services for BMW AG. It is overt from the two Agreements that the nature of ‘Procurement’ and ‘Training’ services is entirely different and bear no functional similarity with each other. Whereas the Procurement services were rendered by IPO of the assessee, the Training services were rendered by its technical staff. In view of there being functional differences between the two and use of separate work force for their rendition, we are not inclined to accept the view point of the TPO for aggregating these two distinct services into one and thereafter determine their ALP in a combined manner. We, therefore, set aside the impugned order and remit the matter to the file of the AO/TPO for a fresh determination of ALP for these two services independently, after allowing a reasonable opportunity of being heard to the assessee. Higher depreciation on DVR - Held that:- It is noticed that the DRP followed its order for the A.Y. 2009-10 for negating the assessee’s claim of higher depreciation on DVR. Such issue came up consideration before the Tribunal in assessee’s case for the A.Y. 2009-10. The Tribunal has held in its order that higher rate of depreciation is applicable to switches. Thus the departmental view was upheld on others. Since DVR is not a switch, respectfully following the precedent, we approve the view taken by the AO in its order for treating DVR as a part of Plant and machinery and not computer peripherals and allowing depreciation accordingly.
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