TMI Blog2022 (3) TMI 1471X X X X Extracts X X X X X X X X Extracts X X X X ..... BER Appellant by Sh. Ravi Sharma, Adv, Mr. Rishabh Malhotra, AR Ms. Subhangi Arora, AR Respondent by Sh. Surender Pal, CIT (DR) ORDER PER YOGESH KUMAR U.S., JM This is an appeal filed by the Assessee for the Assessment Year 2012-13 against the final assessment order dated 18/03/2016 passed under Section 143(3) r/w Section 144C of Income tax Act, 1961, by ACIT, New Delhi. 2. The grounds of appeal are as under:- That on the facts and circumstances of the case, and in law: 1. On the facts and in circumstances of the case and in law, The Ld. Dispute Resolution Panel (DRP)/Transfer Pricing Officer ( TPO ) erred in making an adjustment to income of the Appellant amounting to Rs. 1,53,10,763 by holding that the international transaction pertaining to availing of corporate management services from the Associated Enterprise does not satisfy the arm s length principle envisaged under the Act. In doing so, the Ld. DRP/TPO grossly erred in: 1.1 disregarding the benchmarking approach and methodology followed by the Appellant for determining the arm's length price ( ALP ) for availing of corporate management services excluding IT cost in its tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 142(1) of the Act have been issued. The Representative of the assessee attended the proceedings from time to time and furnished details. 5. The Ld. TPO in order to determine the Arms Length Price in international transaction undertaken by the assessee during the FY 2011-12, initiated proceedings u/s 92C(A) of the Act. The Representative of the assessee has attended the proceedings and furnished details. The findings of the TPO are hereunder:- The taxpayer has not been able to prove the benefits that it had derived from the services purportedly by the Expats. No independent entity would pay for such services without any cost benefit analysis. The taxpayer has not furnished any evidence as to the cost benefit analysis with regard to the independent local employees. No third party would like to avail services without any cost benefit analysis with regard to Expats Vs. independent employees. No documentation has been produced by the taxpayer to support its claim for the receipt of services. The benchmarking done by the taxpayer is not in accordance with the law and therefore CUP method is required to be applied in this case. Based on the above findings, Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l dated 03/10/2018 in the case of Hwawei Telecommunications (India) Pvt. Ltd. Vs. ACIT (ITA No. 7509/Del/2017). 12. Per contra, the Ld. DR submitted that, the assessee has not brought on record any evidence to show exactly what services were rendered by AE to the assessee. The assessee is not able to prove that, the assessee had indeed took into consideration the value of the services vis- -vis benefit claimed for the payment made to the service and assessee has not been able to give any evidence as to what is the benefit that had occurred on the receipt of services. Further, taken us though the World Wide Cost Allocation Agreement produced by the assessee and submitted that, the assessee is not a signatory for the said agreement. Further contended that, the assessee had claimed to have availed the service from its AE s which is an Australian entity, but the payment has been made to the German entity. There is no interaction and the transaction of the Assessee with German entity and there is no service availed from the German Company and the payment of service fee is only an arrangement to change the tax base without any economic substance in the transaction. The Ld. DR has ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e held that since payment of intra-group services is increasing day by day, it leads to profit shifting. 21. In view of what has been discussed above, we are of the considered view that issue at hand is required to be remitted back to the TPO/AO to decide afresh in the light of the observation made herein before and in view of the order passed by ld. TPO in preceding and succeeding years. Consequently, the appeal filed by the taxpayer is allowed for statistical purposes. Order pronounced in open court on this 3rd day of October, 2018. 15. Further, the Coordinate bench of this Tribunal in the case of Hwawei Telecommunications (India) Pvt. Ltd. Vs. ACIT (ITA No. 7509/Del/2017) vide order dated 24/02/2021 it is held as under:- 23. Hon'ble Delhi High Court in case of CIT vs. Cushman and Wakefield India (P) Ltd. (2015) 60 taxmann.com 168 (Delhi) judgment dated 07.05.2015 has held that, the court first notes that the authority of TPO is to conduct transfer pricing analysis to determine the ALP and not to determine whether there is a service or not from which the assessee benefits. 24. So, following the decisions rendered by the Hon'ble High Court and coor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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