TMI Blog2019 (12) TMI 1630X X X X Extracts X X X X X X X X Extracts X X X X ..... l transactions was at arm s length. Tribunal has concluded that the expenses paid to the employees of the A.E. were in the nature of reimbursement of their salaries without any mark up. Thus, the payment per se was to third party employees and not to any related party for services rendered. In light of the findings of the fact arrived at by the ITAT, the questions of law raised are answered against the revenue and in favour of the assessee. - ITA-8535-2018 (O&M), ITA-105-2019 (O&M), ITA-104-2019 (O&M) - - - Dated:- 10-12-2019 - HON'BLE MR. JUSTICE AJAY TEWARI AND HON'BLE MR. JUSTICE VIVEK PURI Mr. Tajinder Joshi, Senior Standing Counsel with Mr. Vikram Bali, Junior Standing Counsel for the appellant. Ms. Radhika S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cost incurred by the service provider and thus the assessee had failed to follow basic principle of independent behavior. However, although the CUP Method was applied by the TPO, no comparable was referred to or adverted to while making the said adjustment. The Assessing Officer passed a draft order based on the observations of the TPO to which the Assessee filed its objections before the DRP. The Assessee specifically objected to the use of the CUP method for evaluation of Intra Group Services contending that the TPO had failed to provide any instance where a service provider is sending its employees incurring travel cost and other overheads and still the third party service provider did not pay anything. The DRP brushed aside the obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s follows:- i. The Respondent Assessee had engaged the service of the employee of A.E. M/s. George Moll and M/s. Rita Ricken who helped the assessee in material development, development of product as per European Standard, maintenance of CNG Machines and rendered Technical Support to the assessee. ii. The Respondent Assessee paid only the salary and related cost of the employees and no mark up had been charged by the assessee on the transaction. iii. The CUP Method applied by the Transfer Pricing Officer without any comparable to substantiate that the A.E. provided similar services to an independent enterprise in comparable circumstances or any instance where comparable services were provided to an independent enterprise in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ALP of Infra Group Services? 2.) Whether on the facts and in circumstances of the case and in law, the Hon ble ITAT was right in holding that segregation of the transaction of Infra Group Services was not correct and permissible? 3.) Whether on the facts and in circumstances of the case and in law, the Hon ble ITAT was right in ignoring the findings of the TPO/AO that services were not received by the assessee from A.E.? 7. It is the contention of Mr. Tajender Joshi, Ld. Counsel for the Revenue that the Tribunal had fallen in error in rejecting the Cup Method employed by the TPO and accepting the TNMM used by the assessee in its transfer pricing analysis. It was also argued that the ITAT has not passed the order as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench whether in terms of Rule 10C read with Section 92C of the Income Tax Act and Rules, the Transfer Pricing Officer had referred to any comparables to apply the Cup Method in the facts and circumstances of the case, the counsel could not indicate any instance where an independent entity had availed of services and had not paid any remuneration for the same. 10. In light of the above, the conclusion of the ITAT could not be faulted as the same was inconsonance with the provisions of the Act and the Rules. The contention of the Counsel for the revenue cannot be accepted as the Tribunal while upholding the TNMM Method has observed that the other methods prescribed under the Act namely the CUP or Cost Plus Method being not applicable in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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