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2017 (5) TMI 1615

proof of receipt of the services. The appellant also filed an application for admission of this additional evidence, in terms of provisions of Rule 29 of the ITAT Rules. No doubt the parties to the appeal are entitled to produce the additional evidence either on suo motto direction of the Tribunal on its own in terms of Rule 29 of ITAT Rules, 1964. - Where the additional evidence is filed by the either party to the appeal, the additional evidence can be admitted by the Tribunal at its discretion only in the event that the party leading the additional evidence satisfied the Tribunal that it was prevented by sufficient cause from leading such evidence and this evidence would have material bearing on the issue which is to be decided by the Tribunal and ends of justice demands the admission of such evidence. - The Tribunal can only admit this evidence after satisfying the above conditions and passing an order to that effect. In the present case, the appellant had not explained as to how it was prevented from furnishing evidences before lower authorities and also how this evidence would prove conclusively that AE had rendered the services for which management fee was paid by t .....

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s "management services") from the associated enterprises (AEs), to be 'Nil", and in doing so grossly erred in: 3.1 Upholding the act of the learned TPO of erroneously applying the Comparable Uncontrollable Price ('CUP') Method. 3.2 Upholding the conclusion reached by the learned TPO that the Appellant received no economic and commercial value from the management services provided by the AEs. 3.3 Ignoring the fact that the Appellant was a joint venture company with one of the partners being an Indian concern, 3.4 Erred in considering the quantification of transaction value as 'Nil' for management services being rendered by the AE. 4. The interest liability under Section 234C and 234D has arisen as a result of the order of the learned AO making an addition as discussed above, leading to an enhanced tax liability. The interest liability would consequentially abate in consideration of our request to set aside the order of the learned AO." 3. Briefly the facts of the case are the appellant is a company incorporated under the Companies Act, 1956. It is engaged in the business of manufacturing, trading and marketing. The return of income for the ass .....

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Enterprises and therefore held that the arm's length price is 'Nil' and accordingly suggested the TP adjustment of ₹ 2,21,64,344/-. The AO passed the draft assessment order dated 18.11.2009 incorporating the above TP adjustment. After receipt of the draft assessment order, the appellant filed an objection before the Hon'ble DRP contending interalia that TPO was not justified to treat the transaction of payment of management fee as a separate class of transaction without rejecting the TP study report submitted by the appellant. It was further contended that the TPO was not justified in not aggregating the transaction of management fee with other transactions as the transactions were interlinked. It was further contended that the TPO is not justified in applying the 'CUP' method as against the TNMM adopted by the appellant for bench marking the management service fee and finally contended that the TPO was not justified in suggesting the TP adjustment of ₹ 2,21,64,344/-. The Hon'ble DRP after considering the submission of the appellant confirmed the findings of the TPO vide order dated 27.08.2010. Pursuant to the order of Hon'ble DRP, final .....

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ot determine the ALP in such transaction at Nil. The reliance in this regard can be placed on the decision of Hon'ble Delhi High Court in the case of Delhi High Court in the case of EKL Appliances Ltd. (supra). The Hon'ble Delhi High Court has reiterated the position laid down by the Hon'ble Supreme Court in the case of Eastern Investments Ltd. v. CIT [1951] 20 ITR 1 and Sassoon J. David & Co. (P.) Ltd. v. CIT [1979] 118 ITR 261/1 Taxman 485. The decision of Hon'ble Delhi High Court in the case of EKL Appliances Ltd. (supra) was followed by several coordinate benches of this Tribunal, few of them are as follows: i. Dresser-Rand India (P.) Ltd. v. Addl. CIT [2011] 13 taxmann.com 82/[2012] 53 SOT 173 (Mum.) ii. Ericsson India (P.) Ltd. v. Dy. CIT [2012] 25 taxmann.com 472 (Delhi) iii. AWB India (P.) Ltd. v. ACIT [IT Appeal No. 4454 of 2011] iv. SC Enviro Agro India Ltd. v. Dy. CIT [2013] 34 taxmann.com 127/143 ITD 195 (Mum. - Trib.) v. Abhishek Auto Industries Ltd. v. Dy. CIT [2011] 9 taxmann.com 27 (Delhi) vi. McCann Erickson India (P.) Ltd. v. Addl. CIT [2012] 24 taxmann.com 21 (Delhi) vii. DSM Anti-Infectives India Ltd. v. Addl. CIT [2014] 50 taxmann.com 239 (C .....

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ellant had not explained as to how it was prevented from furnishing evidences before lower authorities and also how this evidence would prove conclusively that AE had rendered the services for which management fee was paid by the appellant. In the circumstances, we do not find any valuable reason for admission of additional evidence as the additional evidence does not conclusively prove that the services were actually rendered by the AE. The coordinate bench of this Tribunal in the case of Volvo India (P.) Ltd. v. CIT (Appeals) [2017] 77 taxmann.com 207 of which the Hon'ble AM is the author, held as follows:- "12. Thus in the light of the above legal position, the ALP of services of AE cannot be determined at Nil by questioning the necessity of benefits of expenditure incurred. But the matter does not end there. The onus lies on the assessee to prove that the services are actually rendered by the AE. But the assessee had failed to discharge this onus lying upon it despite being asked to do so by the TPO. The TPO had especially invited the assessee company to produce the proof in support of the services rendered by AE. The appellant only had tried to prove this by producing .....

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