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TMI Blog2022 (11) TMI 1417X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The Appellant filed return of income on 28.11.2013 declaring income of INR 16,42,15,172/-. The case of the Appellant was selected for scrutiny. During the assessment proceedings, the Assessing Officer noted that the Appellant has entered into international transactions with its Associated Enterprises (AEs) and therefore, a reference was made under Section 92CA(1) to the Transfer Pricing Officer (TPO) for the determination of Arm's Length Price (ALP) of the international transactions. 3.1. The TPO noted that the Appellant had paid Management Fee of INR. 8,06,32,267/- to Brink's Incorporated USA. First time Management Fee was paid by the Appellant in the immediately preceding Assessment Year 2012-13 and this was the second year wherein expenditure by way of Management Fee was incurred by the Appellant. The TPO noticed that in the immediately preceding assessment year upward transfer pricing adjustment had been proposed by the then TPO and therefore, the Appellant was asked to show cause why similar transfer pricing adjustment should not be made during the Assessment Year 2013-14. In response, the Appellant submitted that the facts and circumstances prevailing during the Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer passed Final Assessment Order, dated 25.09.2017, making transfer pricing addition of INR. 7,83,82,267/- leading to the file of the present appeal by the Appellant. 4. When the matter was taken up for hearing, the Ld. Authorised Representative for the Appellant submitted that the authorities below had made/confirmed the transfer pricing addition merely on the basis of transfer pricing adjustment for the immediately preceding Assessment Year 2012-13. He placed on record copy of the order passed by the Tribunal for Assessment Year 2012-13 passed in ITA No. 343/Mum/2017 (Pronounced on 27.12.2019) whereby the appeal filed by the Appellant was allowed by the Coordinate Bench of the Tribunal. He submitted that by way of the aforesaid order, the Tribunal had rejected the basis of which transfer pricing adjustment was made by the TPO/Assessing Officer. He further submitted that following the decision of the Tribunal in the case of the Appellant for the immediately preceding Assessment Year 2012-13, the transfer pricing addition made by the TPO/Assessing Officer are liable to be deleted. The Ld. Departmental Representative, responding to the aforesaid submissions, relied upon para No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details and evidence of costs actually incurred by the AE, specifically for providing the services to the assessee; it has also not been able to give separate details of costs paid for each service stated to have been availed; all that is stated is that costs incurred by AE have been reimbursed on allocation basis, however, no details of such costs incurred by AE and actual evidence thereof were furnished. On the basis of the above arguments, the Ld. DR supports the order passed by the AO. 5. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. In the instant case, the assessee has consistently been benchmarking all of its transactions with the AE under TNMM from the beginning, for now over seven years. In all three previous assessment years i.e. from AY 2009-10 to 2011-12, wherein its international transactions with AEs were in the scrutiny, the assessments have been completed by accepting the transactions with AE being at arm's length holding TNMM as the most appropriate method. The assessee had submitted before the TPO that its operating revenue is Rs. 168.88 crores and the operating profit is Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LP of Management Fee at INR 22,50,000/- (750 hours x INR 3,000/- per hour) by using CUP Method, and while doing so the TPO made an adhoc unilateral estimation by assuming that around 750 hours would have been spent for providing the aforesaid services for which remuneration of INR 3,000/- per hour was appropriate. The Tribunal deleted the addition holding that the TPO had resorted to an adhoc unilateral pricing of the Management Fee without applying any of the prescribed methods and disregarding the facts of the case by placing reliance upon the decision of the co-ordinate Bench of the Tribunal in the case of Kellogg India Pvt. Ltd. v. DCIT (ITA No. 2866/Mum/2014) for AY 2009-10; M/s CLSA India Pvt. Ltd. v. DCIT (ITA No. 1182/Mum/2017) for AY 2012-13; Firmenich Aromatics India P. Ltd. v. DCIT (ITA No. 2590/Mum/2017) for AY 2012-13. 7. We note that in the case of CLSA vs. DCIT [ITA No. 1182/Mum/2017, pronounced on 16.01.2019], relied upon by the Ld. Authorised Representative for the Appellant, the Co-ordinate Bench of the Tribunal has held as under: "22. Section 92C(1) of the Act, contemplates that the arms length price in relation to an international transaction shall be determi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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