TMI Blog2022 (5) TMI 1519X X X X Extracts X X X X X X X X Extracts X X X X ..... of the TPO is not in accordance with the mandate of law. When the assessee is making identical payment every year for identical services provided by AE and the revenue has taken a particular stand with regard to the services so provided by the AE, in our view, there is no scope for applying the principle of res-judicata in other years for this matter for taking different stand in others for the identical payments made by the assessee. It is not clear as to whether the decision rendered by AAR against the assessee has attained finality or not. Accordingly, on a conspectus of the matter, we are of the view that the issue relating to transfer pricing adjustment in respect of three types payments referred in the table issue needs to be ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Ld CIT(A)-4, Bangalore for assessment years 2009-10 to 2013-14. Since common issues are urged in these appeals, they were heard together and are being disposed of by this common order, for the sake of convenience. 2. In all the five years, the assessee is challenging the decision of Ld CIT(A) in confirming the transfer pricing adjustment made in respect of fee paid for management services determining the ALP as NIL. In AY 2012-13 and 2013-14, the assessee is challenging the decision of Ld CIT(A) in confirming the disallowance of writing of loose tools. 3. The assessee is engaged in the business of manufacture and sale of Carbon Blocks and brushes, fuses and heat exchangers and also trading in fuses. The assessee was formerly know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces but a way to siphon of the profits with minimum incidence of tax. 8.5 The taxpayer did not show what is the tangible and substantial commercial benefit derived by the taxpayer from the alleged services and consequent payment of management/maintenance fees of Rs.91,51,375/- and consequently did not prove the arm s length nature of management fees paid to its AE. 4. The Ld CIT(A) accepted Arm s Length Price in respect of five items and confirmed the decision of TPO in respect of remaining three items. It is pertinent to note that the revenue has not filed appeals challenging the relief granted by Ld CIT(A) in respect of all the five years and hence the said issue has attained finality. The assessee is contesting the transfer p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ALP only and nothing else. Hence determination of ALP at NIL by applying benefit test is not in accordance with the provisions of Chapter X of the Act and also beyond his jurisdiction. (iv) the TPO has erred in failing to appreciate that the AAR, in the assessee's own case reported as Mersen AAR (2012) 208 Taxman 486 (AAR) has upheld, on identical set of facts, the argument of the revenue that the associated enterprises is not only rendering managerial and consultancy services to the assessee, but also is making available to technical knowledge to the assessee. Hence the revenue could not have taken a different stand in the years under consideration. (v) the Ld CIT(A) was not justified in confirming the action of the TPO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entions (i) with regard to the necessity of segregating this transaction, when the ALP had been determined at entity level aggregating the payment of management fee and (ii) with regard to not following the decision rendered by AAR in the assessee's own case in an earlier year. We notice that the Ld CIT(A) has held that the principle of resjudicata cannot be applied in income tax proceedings and accordingly refused to follow the decision rendered by AAR. We are unable to agree with the view so expressed by Ld CIT(A). When the assessee is making identical payment every year for identical services provided by AE and the revenue has taken a particular stand with regard to the services so provided by the AE, in our view, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical issue in the assessee's own case in AY 2008-09 in ITA No.2184/Bang/2017 dated 11.09.2020. We notice that the co-ordinate bench has deleted an identical disallowance made in AY 2008-09 with the following observations:- 10. Next ground is regarding disallowance of Rs.3,50,544 being 25% of charges of tools which are written off during the year. The assessee has debited a sum of Rs.3,50,544 as being the charges of tools written off. It was submitted before the Assessing Officer that the assessee has practice of writing off of 25% of charges of tools in each assessment year. According to the Assessing Officer, it has to be grouped under the head Block of Assets and depreciation to be claimed at applicable rate. The Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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