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TMI Blog2018 (5) TMI 1972X X X X Extracts X X X X X X X X Extracts X X X X ..... t the DRP/TPO/Assessing Officer grossly erred in making a transfer pricing addition of Rs. 6,05,36,749/- while computing the income of the assessee. 3. The representatives of both the sides were heard at length, the case records carefully perused and with the assistance of the ld. Counsel/DR, we have considered the relevant documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules. Judicial decisions relied upon were duly considered. 4. Briefly stated, the facts of the case are that the assessee [ATKBO] is an independent branch office of ATK Ltd which was set up in 1997 for providing management consultancy services to Indian and foreign clients. ATKBO has two offices in India, namely, New Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of certain services purposed to have been received by the assessee. The TPO noticed that this amount has been split by the assessee into its management consultancy segments and treated as cost while the overall transactions were benchmarked using TNMM. 8. The breakup of the management fee paid by the assessee are as follows: * Management services from ATK USA [Rs. 2,98,70,820/-] * Account services * Global financial planning services * K-Net services * Knowledge services * Information systems * Human resource information system * Global tax * Operations control and compliance * Treasurey * Global marketing * Office of the CEO * Office services * Procurement * Legal * Management services from ATK Australia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned hereinabove are part of the I.T support functions performed under the I.T. support provided by ATK UK for which cost allocation has been done to the ATKBO. The ld. DR vehemently stated that to make payments once again for same set of services to the ATK UK would amount to duplication of activities which are not allowed for tax purposes. Strong reliance was placed on the OECD guidelines wherein intra group services have been dealt in Chapter VII. 11. After considering the written submissions of the ld. DR and the orders of the authorities below, in our considered opinion, in order to examine the ALP of intra group services received by one of the associated enterprises, following essential information should be available: 1. Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... normal commercial conditions as may have been structured by the tax payer to avoid or minimize tax. The significance of the aforesaid guidelines lies in the fact that they recognise that barring exceptional cases, the tax administration should not disregard the actual transaction or substitute other transactions for them and the examination of a controlled transaction should ordinarily be based on the transaction as it has been actually undertaken and structured by the associated enterprises. It is of further significance that the guidelines discourage re-structuring of legitimate business transactions." 14. It has been held by various courts that it is not for the revenue authorities to dictate to the assessee as to how he should conduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td which is a separate entity whose financial/TP study are placed on our record for the year under consideration. Detailed cost allocation sheets showing different personnel involved for each service has been placed on record separately. We find that the revenue authorities have simply rubbished the email evidences brought on record without examining and pointing out defects in the evidences. It is not proper for the lower authorities to disregard such direct evidences. 19. In so far as the payment relating to management services provided by ATK Australia is concerned, we find that the same has been dismissed by lower authorities on flimsy grounds. We find that the allocation in respect of services provided by Shri John Yoshimura Regional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prime lending rate of RBI during the year under consideration should be applied and accordingly direct the TPO. 24. We find that the assessee has earned interest on fixed deposits @ 7.56%. In our considered opinion, since the assessee has received interest from its AE in France, applying prime lending rate of RBI is not proper In any case, since the assessee is receiving interest on FD @ 7.56%, interest received from AE @ 8.46% can be considered at ALP. Therefore, no TP adjustment is called for. We direct accordingly. 25. The other issues are consequential in nature and the Assessing Officer is directed to decide the same as per provisions of law. 26. In the result, the appeal of the assessee in ITA No. 6249/DEL/2012 is allowed. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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