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TMI Blog2019 (7) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... Jain, Advocates. O R D E R CM APPL. 29035/2018 (Exemption) 1. Exemption allowed subject to all just exceptions. CM APPL. 29036/2018 (Delay in filing) and CM APPL. 29037/2018 (Delay in filing) 2. For the reasons explained in the applications, the delay in filing and refiling the appeal is condoned and the applications are allowed. ITA 760/2018 3. This is an appeal against the order dated 9th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid royalty at 2% of the earnings in foreign currency for each of the aforementioned items to its AE. In its Transfer Pricing Analysis, the Assessee chose the CUP as the most appropriate method for determining the ALP. According to Assessee, payments of royalty up to 8% of exports and 5% of domestic sales under the 'Automatic Route' in terms of press note No. 2 dated 24.06.2003 was permissible a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to give an impression that some benefit had passed to the Assessee, when in fact that was not the case. 8. After the Dispute Resolution Panel (DRP) partially agreed with the TPO, the Assessee went in appeal before the ITAT. The ITAT noted that for the subsequent AY 2008-09, the DRP followed a survey report prepared by 'Franchising World', in which, it was noted that the average royalty percentage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustry which would give an indication as to the trend in the royalty payment. That could give reasonable indication whether the payment of royalty by the Assessee to its AE for the AY in question was unreasonable. In the absence of such empirical data, to merely conclude that the payment of higher royalty was not justified only because it did not result in any tangible benefit to the Assessee was n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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