TMI Blog2017 (4) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)(c). Furthermore, having regard to the fact that the assessee's claim was in respect of a new line of business of manufacturing, introduced for the first time in the given year, its failure per se could not have triggered the automatic presumptive application of Seventh Explanation to section 271(1)(c) as perceived by the Revenue authorities in this regard. Undoubtedly, the application of the exception has to be based upon the facts of each case and no generalisation can be made. Given this reality, the court is satisfied that in the present instance, the Income-tax Appellate Tribunal did not commit any error of law. No substantial question of law arises. - I. T. A. No. 913 of 2016 and C. M. Appl. No. 46519 of 2016 - - - Dated:- 17-1- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer Pricing Officer has determined nil arm's length price of the three international transactions by holding that the assessee did not avail any services for which the payment was made to its associated enterprises as no benefit was shown to have been received, and, in any case, it was a case of duplication of services. 12. We do not find any force in the view point of the Transfer Pricing Officer that it was a case of duplication of services. It is for the reason that the assessee was incorporated in the Financial year 2007- 08 and its annual accounts for the year under consideration show that the manufacturing activity was undertaken for the first time during this year, as against the only trading activity in the preceding year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment falls in capital or revenue field. Since the Assessing Officer has imposed penalty by considering the transfer pricing adjustment made by the Transfer Pricing Officer on the premise of 'non-availing of services', which position is contrary to the actual factual matrix of having also received the entire business with Maruti Suzuki Ltd., for the stated consideration, we cannot improve the assessment order or the consequential penalty order to rope in another new reason for confirming the penalty. Fate of the penalty could have been different if a proper analysis of the business transfer agreement had been made by the authorities to ascertain if such payment of ₹ 3.14 crore (out of total addition of ₹ 3.31 crore) was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... technical support services in India. A brief description of the above agreements amply shows that the assessee paid under these international trans actions for acquiring the 'Business' of supply to Maruti Suzuki Ltd., and availing engineering services for setting up of plant required for manufacturing of the products to be supplied to Maruti Suzuki. Since no manufacturing activity was done by the assessee in past as it was simply a trader, acquiring of Business. and availing of the services under these three agreements cannot be characterised as duplication of services. The Income-tax Appellate Tribunal also held that to say that the assessee did not avail any services at all, is incorrect. The assessee had acquired business f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was obliged to disclose the benefits and advantages they had derived from the services and also describe the nature of the services and that its failure resulted not only in rejection of the transactional net marginal method but also reduction of losses- which meant that the application of section 271(1)(c), Seventh Explanation was warranted. 5. This court has considered the submissions. As is evident, the Income-tax Appellate Tribunal's impugned order has elaborately dealt with the rationale in rejecting the Assessing Officer's imposition of penalty. This court is of the opinion that the view taken by the Income-tax Appellate Tribunal does not in any manner deviate against the Seventh Explanation to section 271(1)(c). Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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