TMI Blog2019 (12) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... . - ITA No. 343/MUM/2017 - - - Dated:- 27-12-2019 - Shri Saktijit Dey (Judicial Member) And Shri N.K. Pradhan (Accountant Member) For the Assessee : Mr. Farrokh V. Irani, AR For the Revenue : Mr. Suhas Kulkarni, DR ORDER PER N.K. PRADHAN, A.M. This is an appeal filed by the assessee. The relevant assessment year is 2012-13. The appeal is directed against the order passed by the Deputy Commissioner of Income Tax, Central Circle-6(4), Mumbai (in short AO ) u/s 143(3) r.w.s. 144C(13) of the Income Tax Act 1961, (the Act ). 2. Briefly stated, the facts of the case are that the assessee filed its return of income for the assessment year (AY) 2012-13 on 08.11.2012 declaring total income of ₹ 28,91,46,998/-. A reference u/s 92CA(1) was made by the AO to the Transfer Pricing Officer (TPO) for determination of Arm s Length Price (ALP) with reference to all the transactions referred in Form 3CEB filed by the assessee. The assessee is a part of Brink s Global Services (BGS) which provides global risk management and secure logistics for valuables ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Services provided are bifurcated into regional services and global services. The allocation key is based on turnover where the total global and regional cost has been allocated. However, the TPO was not convinced with the above explanation of the assessee and observed that the assessee has not benchmarked the transaction separately and relied on global report and agreement and therefore, the same is not acceptable, as under the TP provisions, each international transaction is to be benchmarked separately. Thus the TPO held that as management fees constitute a separate class of transaction, it should be benchmarked separately. The TPO held that in the case of the assessee the payment for service is to be benchmarked by Comparable Uncontrolled Price (CUP). Further, the TPO noted that the assessee has filed for availing of the services only one Brink s Global Regional Services Report 2011. The TPO held that while the assessee has given description of the various services for which payment is stated to have been made, actual evidence for receipt of service has not been furnished to justify the cost allocation or to enable the AL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, then following the direction of the DRP, made an addition of ₹ 3,83,75,622/- on account of transfer pricing. 3. Before us, the Ld. counsel for the assessee submits that the assessee has consistently been benchmarking all of its transactions with the AE under Transactional Net Margin Method (TNMM) from the beginning, for now over seven years and in all three previous assessment years i.e. from AY 2009-10 to 2011-12, wherein its international transactions with AEs were in scrutiny, the assessments have been completed by accepting the transactions with AE being at arm s length, holding TNMM as the most appropriate. It is stated that in respect of management fees paid/payable during the year under consideration, the assessee has inter alia submitted its working, calculation, allocation, method, rational and business expediency before the TPO. In respect of management fees paid/payable by the assessee, it has furnished the report titled Brinks Global Regional Services 2011 , which provides inter alia the department/category-wise details, working and supporting in various appendices. It also included the details of services provided by the AE and break up o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed. Elaborating further, the Ld. DR submits that the assessee has not submitted any details and evidence of costs actually incurred by the AE, specifically for providing the services to the assessee; it has also not been able to give separate details of costs paid for each service stated to have been availed; all that is stated is that costs incurred by AE have been reimbursed on allocation basis, however, no details of such costs incurred by AE and actual evidence thereof were furnished. On the basis of the above arguments, the Ld. DR supports the order passed by the AO. 5. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. In the instant case, the assessee has consistently been benchmarking all of its transactions with the AE under TNMM from the beginning, for now over seven years. In all three previous assessment years i.e. from AY 2009-10 to 2011-12, wherein its international transactions with AEs were in the scrutiny, the assessments have been completed by accepting the transactions with AE being at arm s length holding TNMM as the most appropria ..... X X X X Extracts X X X X X X X X Extracts X X X X
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