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2020 (10) TMI 451 - AT - Income TaxTP adjustment made on account of payment of management charges - Proof of availment of services - determination of arm's length price by the TPO at Nil - HELD THAT:- Assessee was availing specialized services which were provided by the AEs from common pool and the evidences in this regard have been filed by the assessee and where the services were charged on cost to cost basis, there is no merit in the order of the AO in questioning the availment of services and the benefit derived by the assessee. AO in the alternate held that there was duplication of services. CIT(A) in the final analysis held it to be shareholder activity. All the above said observations of the authorities below, establish the availment of services. We have also perused the data of evidences filed by the assessee to establish its case of availment of services; under law the benefit, if any, arises to the assessee or not cannot be questioned. Hence, the payment made by the assessee being cost to cost reimbursement of the services availed from common pool is duly allowable as a business expenditure in the hands of the assessee. TPO has exceeded his jurisdiction in holding the value of the said international transaction at NIL. The Hon’ble Delhi High Court in CIT v. EKL Appliances Ltd.[ 2012 (4) TMI 346 - DELHI HIGH COURT] had held that benchmarking of cost to cost reimbursement of expenses was not within the jurisdiction of the TPO while computing the arm’s length price of the international transaction u/s 92CA of the Act. In such facts, we direct the Assessing Officer/TPO to allow the claim of the assessee in entirety. The Ground of appeal Nos. 1 & 2 are allowed.
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