TMI Blog2022 (7) TMI 1293X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions of the assessee with its AE for the services availed is held to be at arm's length. Disallowance of foreign travel expenses - HELD THAT:- As evident that the foreign travel expenses for the family of the employees disallowed by the Assessing Officer pertains to the family members of the employees, who are other than the employees of the assessee. Admittedly, the assessee had no supporting evidences to substantiate its claim. Following the decision of the co-ordinate bench of this Tribunal, we direct the AO to verify the claim of the assessee that if fringe benefit tax has been paid by the assessee, in order to allow the claim and thereby pass consequential orders as per the provisions of the Act. - ITAT No. 1870/Mum/2014 - - - Dated:- 15-7-2022 - SHRI M. BALAGANESH ( ACCOUNTANT MEMBER ) And SMT. KAVITHA RAJAGOPAL ( JUDICIAL MEMBER ) Assessee represented by : Shri Jehangir D Mistry Department represented by : Shri Jayant Jhaveri CIT DR ORDER Per Kavitha Rajagopal , ( JM ) This appeal has been filed by the assessee against the order passed by the DCIT dated 31/01/2014 for Assessment Year 2009-10 under section 143(3) r.w.s. 144C(13) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and in law, the learned AO/TPO, under the directions of the Hon'ble DRP erred in holding the arm's length price of the Appellant's international transaction of payment of regional administration, regional co-ordination and worldwide training cost allocation at Nil instead of Rs. 4,21,32,081 as determined by the Appellant. 3. On facts and in the circumstances of the case and in law, the learned AO/TPO, under the directions of the Hon'ble DRP erred in determining the arm's length price of the Appellant's international transaction of payment of information technology cost allocation on an ad hoc basis at Rs. 50,00,000 instead of Rs. 4,29,27,940 as determined the Appellant. 4. On facts and in the circumstances of the case and in law, the learned AO, under the directions of the Hon'ble DRP erred in disallowing the foreign travel expenses of Rs. 15,85,847. 5. On the facts and in the circumstances of the case and in law, the learned AO erred in short-granting TDS credit by Rs. 4,10,94,623. The Appellant prays that the learned AO be directed to grant TDS credit of Rs. 4,10,94,631. 6. On the facts and in the circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground that it relates to marketing and sale modules. (3) The third agreement was that of Oracles which was rejected on the ground that the royalty charged in this case was only 1% and the agreement pertains to sales addendum. Further to this, this comparable was also rejected on the ground that the assessee could not produce the original agreement for evaluating comparability. 5. The Ld. DRP upheld the TPOs decision on rejecting the three comparables for want of details thereby upholding the action of the AO/TPO action in treating the ALP for the impugned transaction at Nil. 6. Ground 2 pertains to the assessee's international transaction of payment of regional administration, regional co-ordination and worldwide training cost allocation which was determined by AO/TPO and under the directions of Hon'ble DRP at Nil instead of Rs. 4,21,32,081/- as determined by the assessee. This pertains to the recomputation of ALP for the impugned transaction of regional administration, regional co-ordination and worldwide training cost allocation a sum of Rs. 1,12,34,445/- which was supported by adequate evidences and no adjustments were made with regard to the said amount w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO/TPO has not disputed the CUP method adopted by the assessee, the AO/TPO has not considered the ALP determined by the assessee using the said method nor has he prescribed any alternate method for determining the ALP for the said transactions. The assessee has relied on the decision of the co-ordinate bench of this Tribunal in assessee's own case for A.Y. 2008-09 in ITA No. 7600/Mum/2012 dated 31/07/2020. He has further relied on another decision of the co-ordinate bench in the case of ACIT vs. Netafim India P. Ltd. in ITA No. 1874/Mum/2011 order dated 25/04/2019 wherein identical issue has been decided by the Tribunal in favour of the assessee. It is admitted that in the transfer pricing study report, where all the international transactions of the assessee have been aggregated and have been benchmarked applying CUP as the most appropriate method. The AO/TPO has rejected the benchmarking made by the assessee in the transfer pricing study report for the reason that the assessee has not provided complete details of the cost incurred by the AE for the impugned transactions. We are of the considered opinion that the TPO should have determined the ALP of the impugned internation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Before us, the Ld. Senior Counsel contended that identical expenses were claimed in earlier years and there is a decision of the co-ordinate bench of this Tribunal in assessee's own case for A.Y. 2008-09 in ITA No. 7600/Mum/2012 order dated 31/07/2020. The Ld. Senior Counsel further stated that fringe benefit tax was paid for the said expenses and cited judicial precedents wherein it was held that disallowance cannot be made if fringe benefit tax was paid. 16. The Ld. DR, on the other hand, relied on the decision of the lower authorities. 17. Having heard both the rival submissions and perused the materials on record, it is evident that the foreign travel expenses for the family of the employees disallowed by the Assessing Officer pertains to the family members of the employees, who are other than the employees of the assessee. Admittedly, the assessee had no supporting evidences to substantiate its claim. Following the decision of the co-ordinate bench of this Tribunal, we direct the Assessing Officer to verify the claim of the assessee that if fringe benefit tax has been paid by the assessee, in order to allow the claim and thereby pass consequential orders as per the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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