TMI Blog2014 (2) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... e desirable and in the interest of justice to set aside both the issues to the file of assessing officer to consider the same afresh after giving the assessee adequate opportunity of being heard – Decided in favour of Assessee. - ITA No. 6226/Del/2012 - - - Dated:- 26-9-2013 - R.P. TOLANI AND B.C. MEENA, JJ. For the Appellant : G.C. Srivastava and Manoneet Dalal For the Respondent : Peeyush Jain and Yogesh Kumar Verma ORDER:- PER : R.P. Tolani This is assessee's appeal against assessment orders dated 17-10-2012for A.Y. 2008-09, passed by the assessing officer u/s 143(3) read with section 144C(13) of the Income-tax Act, 1961 ("the Act"). 2. Various issues are raised which in effect involve following two grounds: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an international transaction with Associate Enterprise ("AE") within the meaning of Sec. 92B of the Act. Requisite form no. 3CEB was filed and the case was referred to TPO for determination of arm's length price ("ALP"). Various TP adjustments were made, part of which were deleted by DRP qua the same by following observations: "The issue before this office is whether the payment that you have made of Rs. 97,956,317 on account of supposed receipt of technical services answers to the arm's length principle or not. It may be mentioned here that for the purpose of benchmarking you have clubbed this transaction with another international transaction related to import of raw materials and components. You have proceeded to draw up segmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng costs. 4.1 Ld. Counsel contends that since DRP did not give any reasons or findings in not excluding the above amounts, additional evidence is filed before us vide application dated 7-5-2013 to substantiate the nature of above transactions to be excluded from the ambit of technical services, since this evidence was never asked and aditions have been made in summary manner, the admission of documents become important for adjudication of tax liability. Besides, assessee was prevented by a sufficient cause in filing the same. 4.2 It is pleaded that: (a) no actual services have been received. (b) Assessee did not need the services and has not received any tangible benefits from the services. (c) The services received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered and compared with the profitability of projects with no inter-company transactions (Segment B) (iv) The use of combined transaction approach for closely linked transactions has also been upheld in the various case laws relied upon by the TPO. 4.6 It is pleaded that the TPO erred in applying CUP method. DRP while approving the same, has given no finding whatsoever on the objections raised by assessee in this behalf for non applicability of CUP method. The contentions of the assessee are: (i) ALP has to be determined using one of the prescribed method. (ii) The TPO did not provide any reasons to reject TNMM as the most appropriate method. (iii) Even under a transaction by transaction analysis, the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying on the similar disallowances made in AY 2005/06 and 2007-08. 4.11 Ld. Counsel for the assessee in brief contends that: (i) No interest bearing funds were used for making the investment. (ii) Assessee did not earn any dividend income or any other tax free income from such investment. (iii) Disallowance u/s 14A is not automatic. 4.12 Reliance is placed on the ratio of decisions in: - Hero Cycles Ltd. (P H High Court) - Paharpur Cooling Towers Ltd. (ITAT Kolkata ) - Gillette Group India Pvt. Ltd. (ITAT Delhi) - Siva Industries and Holdings Ltd. (ITAT Chennai) - Torrent Power Ltd. (ITAT Ahmedabad) 4.13 Ld. Counsel for the assessee contends that assessee had received an order am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make a payment for supposed technical assistance. There is obviously no benefit being received if the assessee is left in losses. It had been brought out in the show cause notice that the profits in the year under consideration could not wife out the carried forward losses. Under these circumstances, there is very little justification for payment of royalty also. However, no interference is made in that transaction since it is a composite payment. There is definitely no justification for a separate payment on account of supposed receipt of technical services. The assessee was asked to submit a copy of the JV agreement. It has failed to do so. All things considered, it can be said that neither the JV agreement nor the arrangement of the JV ..... X X X X Extracts X X X X X X X X Extracts X X X X
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