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TMI Blog2018 (8) TMI 1845X X X X Extracts X X X X X X X X Extracts X X X X ..... r. "1. On the facts and in the circumstances of the case, the orders passed by the LAO and TPO and the directions of the Hon. DRP are bad in law and not in accordance with the provisions of the Act and to the extent they are prejudicial to the Appellant, since the same were undertaken without appreciating the submissions of the Appellant. 2. The LAO, the Ld. TPO and the Hon. DRP erred in concluding that the license fees and management fees transactions are a separate class of transactions and are not closely linked with the transaction relating to manufacture and export of drug formulations to AIHPL. 3. The LAO and the Ld. TPO erred in holding that the Appellant is a captive manufacturer and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfy market conditions without appreciating that the Appellant is a joint venture entity. 4.5 In not appreciating the contention of the Appellant that the license feeisrecovered as part of the sales price. The Hon. DRP erred in affirming the orders above by not correctly appreciating the facts and the judicial precedents on the above. 5. The LAO and the Learned TPO erred in not appreciating the totality of the facts of the Appellant and erred in holding that the ALP of the management fee is 'nil' and consequently erred in treating the entire management fee payment of Rs. 35,521,487/- as a transfer pricing adjustment under section 92CA of the Act. More specifically, 5.1 The LAO and the Learned TPO erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or amend the above grounds of appeal, at any time before or at the time of hearing of the appeal so as to enable to decide this appeal according to law." 3. It was submitted by ld. AR of assessee that in ground nos. 1 to 5 of the assessee's appeal, only one issue is involved i.e. regarding TP adjustment made by the AO by holding that the ALP of the management fee is Nil and he consequently held that the entire management fee payable of Rs. 3,55,21,487/- has to be disallowed by way of TP adjustment u/s. 92CA of IT Act. He submitted that this issue is squarely covered in favour of the assessee by the Tribunal order rendered in assessee's own case for Assessment Years 200910 and 2010-11 in IT(TP)A Nos. 1039 & 1078/Bang/2015 date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese services cannot be held to be NIL. Similarly, the findings that no services were rendered and that the assessee could have performed these services on its own are contradictory. If no services were rendered, which services the authorities below hold that the assessee could have performed on its own. Even the agreement for Management services provided for cost allocation based on turnover at the rate of 3 percent. For the sake of repetition approach of the assessee as well as the Commissioner has not been challenged by the revenue before us whereby by the aggregation of transactions has been done. The computation of nil for Management services by the TPO was done on the basis of method not permissible under the laws by bringing in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT (A) for examining the correctness of the ALP at the entity level by applying the TNMM as the most appropriate method by aggregating the transactions. The CIT (A) is directed to take the remand report from the TPO in this regard and afford the assessee adequate opportunity of being heard in the matter. .Thus Ground nos.3, 4, 5 & 6 of revenue appeal are allowed for statistical purposes." 5. We find that as per this para no. 22 reproduced from the Tribunal order in assessee's own case for Assessment Years 2009-10 and 2010-11, the matter was restored back to the file of CIT(A) for examining the correctness of ALP at the entity level by applying the TNMM as the most appropriate method by aggregating the transactions. In the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again bring on record if the matter is restored back to the file of DRP. The ld. DR of revenue supported the assessment order on this issue. 7. We have considered the rival submissions and since the major issue regarding TP adjustment is going back to the file of DRP, we feel it proper that this issue also should go back to the file of DRP for fresh decision because as per the DRP, necessary evidence was not brought on record but the ld. AR of assessee submitted that the evidence were furnished before the authorities below but these were not considered. Be that as it may but in the interest of justice, we set aside the assessment order on this issue also and restore it back to the file of DRP for fresh decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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