TMI Blog2020 (9) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerning industrial and commercial matters, etc. The receipt of services further find support from the evidences in the form of documents showing compliance to various acts like filing of Income tax return, VAT return, preparation of financial statements, tax audit report, time sheets filled in by BGEPIL employees, TPO has grossly erred in appreciating the facts in true perspective when he held that the employees of BGEIPL sitting in UK cannot comply with tax provisions in India. The fact of the matter is that BGEPIL was rendering these services from its office situated in India and the employees were very much based in India. The Tribunal in assessee's own case for A.Y. 2010-11 [ 2019 (1) TMI 107 - ITAT DELHI ] on identical set of facts has deleted the adjustment made on account of disallowance of payment of management services and unit charges by the assessee to its AE - Thus no merit in the upward adjustment and the same is directed to be deleted. - Decided in favour of assessee. - ITA No. 1370/DEL/2016 - - - Dated:- 14-9-2020 - N.K. Billaiya and Sudhanshu Srivastava, JJ. For Appellant: Vishal Kalra, Adv. For Respondents: Surendra Pal, CIT-DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the taxpayer company. 3. Please specify the amount of payment made for each of such services. 4. Please submit the contemporaneous documentary evidence to show that these services have actually been received by the taxpayer company. 5. Please justify the need for the receipt of such services for which payment has been made. 6. Please state with documentary evidence as to when and how these services were requisitioned from the AEs. 7. Please state as to how the rate or payment for IGS has been determined at the time of entering in to the agreement? Please also furnish the basis thereof. 8. Please state as to whether any cost benefit analysis was done while entering into the agreement and while requisitioning the services for payment of IGS? a. If so the details of such cost benefit analysis should be furnished. The cost benefit analysis should include the expected benefit from the IGS vis a vis the payment made for the same. b. Please specifically state as to whether any benchmarking analysis was done at the time of entering into the agreement so as to compare the payment of IGS to the AE vis a vis an independent party under similar circumstances. If so, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een provided. The assessee failed miserably to demonstrate the need for these services and also receipt of the same. After referring to OECD guidelines and several judicial decisions, the TPO finally concluded that the assessee had made payment of ₹ 179,11,717/- to its AE for intra group services pertaining to management support services which are not found to exist fully and accordingly, made an upward adjustment of ₹ 1,79,11,717/-. 12. Objections were raised before the DRP but were of no avail. 13. Before us, the ld. counsel for the assessee reiterated what has been stated before the lower authorities. It is the say of the ld. counsel for the assessee that the assessee availed certain support services from BGEPIL which included assistance in procuring and selling LNG, obtaining information concerning industrial and commercial matters, services related to promotion, marketing and sale of LNG, and incidental support services like financial reporting, assistance on international and local taxation issues, insurance related assistance, budgeting services, legal services, etc where allocation of actual cost incurred by BGEPIL charged with a mark-up of 12 percent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y BGEPIL employees, 21. The TPO has grossly erred in appreciating the facts in true perspective when he held that the employees of BGEIPL sitting in UK cannot comply with tax provisions in India. The fact of the matter is that BGEPIL was rendering these services from its office situated in India and the employees were very much based in India. 22. The Tribunal in assessee's own case for A.Y. 2010-11 in ITA No. 1980/DEL/2015 on identical set of facts has deleted the adjustment made on account of disallowance of payment of management services and unit charges by the assessee to its AE. The relevant findings of the Tribunal read as under: 13. We have carefully considered the orders of the authorities below and with the assistance of the ld. AR, 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. 14. It is true that the international transactions reported by the assessee have been accepted excepted for MSU charges amounting to ₹ 1,45,06,572/-. The same has not been accepted because the TPO/DRP were of the opinion that the payments for these services are duplicative and when the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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