9911796707
TMI Blog2022 (10) TMI 1168X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaring loss of Rs.17,96,482/- was assessed at Rs. 1,34,66,184/- by making an adjustment of arm's length price of international transaction by Rs. 1,52,62,664/-. 02. The assessee has raised following ground of appeals: "The Appellant objects to the order dated 25 January 2017 (received on 10 February 2017) passed under section 143(3) r.w.s. 144C (13) of the Income-tax Act, 1961 ('Act') by the Income Tax Officer- 15(2)(1), Mumbai ('Assessing Officer' or 'AO') for the Assessment year 2012-13 on the following grounds: The grounds stated here under are independent of, and without prejudice to one another. Direct Tax- Set-off of unabsorbed depreciation 1. The learned Assessing Officer erred in not settingoff the unabsorbed depreciatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant towards regional fees, headquarter fees and royalty. 4. The learned Assessing Officer/TPO erred in disregarding the detailed substantial documentary evidence maintained and furnished by the Appellant under section 92d of the Act read with Rule 10D of the Income-Tax Rules, 1962 ('the Rules) and not appreciating the factual details, submissions and various documentary evidence demonstrating benefits to the Appellant made towards regional service fees and headquarter fees. 5. The learned Assessing Officer/TPO erred in not giving due consideration to the additional evidence filed and the explanations provided in the reply to the remand report filed before the Hon'ble DRP to relation to regional service fees, headquarter fees an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned TPO, on reference held that a. payment of regional fees of Rs. 71,60,700/- is the services claimed to have been received fall under passive association benefits. The assessee is not the manufacturer hence, R&D facilities cannot be a requirement for the assessee. However, the assessee has sharing expenses of the AE under this head. The benefit received for other services are also not clearly laid out, no methodology for determination of markup has been furnished by the assessee and the basis for allocation key is not properly justified hence, ALP of the same is determined at Rs. Nil. b. With respect to payment of management fees of Rs. 18,60,449/- the learned Transfer Pricing Officer determined ALP at Rs. Nil in absence of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 25/01/2017 was passed wherein TPO adjustment of Rs. 1,52,62,664/- was confirmed. 08. Therefore, assessee aggrieved with that order has preferred appeal before us. The learned authorized representative submitted that i. assessee has availed the services of its associated enterprises with respect to payment of regional fees and payment of management fees. He submitted detailed chart containing six services involved in regional service fee giving the brief description and further several evidence produced in the form of E-mails as evidence of services received and consequent benefit arising out of those services. ii. With respect to the management charges, he also submitted a chart giving brief description of five different kinds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as only 10 individuals to manage its India operation and out of that 5 employees were involved in food sales, 1 employee in industrial starch sales and 1 employee in finance and administration etc showing that it did not have adequate human resources to perform the functions for which services of AE is availed. It was stated that assessee does not have dedicated staff for the various services included therein. The assessee has listed six kind of services which were provided for by the Singapore office to the assessee. Further, assessee has also incurred headquarter management fees amounting to Rs. 18,60,449/- to its AE which performs central corporate and administrative services for the benefit of all its foreign affiliates. The claim of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dified starch in Indian market. Therefore, it is never to be a manufacturer. 012. The assessee benchmarked all these above three transactions on an aggregate basis using transactional net margin method as the most appropriate method. The claim of the assessee is that net operating margin of the assessee is higher than the comparable companies and therefore it is at arm's length. The learned TPO has determined ALP of royalty at Rs. Nil. The assessee claims that the MNE group has a global royalty policy which is common across all regions. The agreement entered into is also containing standard clauses. Picking one of the standard clause from that agreement cannot be used against the assessee. The royalty payment by using trademark and patent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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