TMI Blog2017 (12) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... tibility or otherwise of such a payment in terms of section 37(1) of the Act. This addition has been made by the AO in his final assessment order giving effect to the direction given by the DRP and not by invoking section 37(1) of the Act. As the TPO in the instant case initially determined Nil ALP by holding that no benefit etc. accrued to the assessee because of Royalty payment and the AO made the addition without examining the applicability of section 37(1) of the Act, we find the actions of the AO/TPO running in contradiction to the ratio laid down in Cushman & Wakefield (2014 (5) TMI 897 - DELHI HIGH COURT ). Respectfully following the precedent, we set aside the impugned order and remit the matter to the file of AO/TPO for deciding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Ltd. In the same way, the assessee entered into similar agreements with Honda Motorcycles and Scooters India Ltd. and Honda Siel Power Products Ltd. It reported eight international transactions in Form No. 3CEB. The Assessing Officer referred the matter of determination of arm s length price (ALP) of these international transactions to the TPO. The TPO observed that the assessee applied TNMM to demonstrate that the international transactions were at ALP. Not convinced with the assessee s method, the TPO applied Resale Price Method (RPM) as the most appropriate method and determined the amount of transfer pricing adjustment at ₹ 27,01,51,919/-. The assessee remained unsuccessful before the Dispute Resolution Panel (DRP). That is h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regards the application of the most appropriate method, the Tribunal upheld the RPM as the most appropriate method for Distributor/trading segment and in cases where procurement was done by placing job work orders, fresh adjudication was directed to be done de novo for determining the most appropriate method. The order of the Tribunal was challenged by the assessee before the Hon'ble High Court. Vide judgment dated 20.07.2016, the Hon'ble High Court has held that when the matter was remanded, the authority who has to consider the matter of remand, should be free to look into the entire matter without being influenced by any observations in the Tribunal order etc. Crux of the litigation for the immediately preceding two years, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erns that the functional profile of the assessee during the instant year, despite the acquisition of Licence to use intellectual property rights and technical information etc., has not undergone any change vis- -vis the preceding two years, which have been decided by the Hon ble High Court and the Tribunal. Respectfully following the judgment of the Hon'ble High Court amending the order of the Tribunal to a limited extent for the preceding two years, we set aside the impugned order and remit the matter to the file of TPO/Assessing Officer for a fresh determination of the ALP of the international transaction in the light of the observations of the Tribunal and those of the Hon'ble High Court, which have modified the Tribunal order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such services exist or benefits did accrue to the assessee. Such later aspects have been held to be falling in the exclusive domain of the AO. In that case, it was observed that the e9 mails considered by tribunal from Mr. Braganza and Mr. Choudhary dealt with specific interaction and related to benefits obtained by assessee, providing a sufficient basis to hold that benefit accrued to assessee. As the details of specific activities for which cost was incurred by both AEs (for activities of Mr. Braganza and Mr. Choudhary), and attendant benefits to assessee were not considered, the Hon'ble High Court remanded the matter to file of concerned AO for an ALP assessment by TPO, followed by AO's assessment order in accordance with law con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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