TMI Blog2023 (1) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Bench of the Tribunal in the case of Kellogg India Pvt. Ltd. v. DCIT [ 2019 (8) TMI 698 - ITAT MUMBAI] TPO has determined the ALP of the transaction without following any of the prescribed methods - Appeal of assessee allowed - SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER For the Appellant : Shri Farrokh V Irani For the Respondent : Ms.Samruddhi Dhananjay Hande ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the assessment order dated 20/07/2018 passed u/s. 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 [in short the Act ] for the assessment year 2014-15. 2. The brief facts of the case as emanating from records are; the assessee is a 100% subsidiary of Brink s Security International Inc. USA and Brink s Dutch Holding BV. Thus, the assessee is part of Brink s Global Services which provides global risk management and secure logistics for high valuables viz. diamonds, jewellery, precious metals, securities, currency, hi-tech devices, etc. During the period relevant to the assessment year under appeal, the assessee carried out various international transactions with its overseas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee s claim with respect to management services is similar to assessment year 2013-14 and the method of benchmarking in assessment year 2013-14 and 2014-15 is also same. The DRP in para 4.1 of the directions has again reiterated that there is no material change from assessment year 2013-14. 4. Ms.Samruddhi Dhananjay Hande, representing the Department vehemently defended the assessment order. However, the ld. Departmental Representative fairly submits that the solitary issue raised in the appeal has been considered by the Tribunal in assessee s own case in the preceding assessment years. 5. Both sides heard, orders of authorities below examined. The solitary issue raised in the appeal by the assessee is with respect to adjustment of Rs.4,08,27,526/- in respect of management fee paid by the assessee to its AE. At the outset, we find that the TPO and the DRP in their respective order /directions have recorded that, the facts in the impugned assessment year are similar to the facts in assessee s own case for assessment year 2012-13 and 2013-14. 6. The Co-ordinate Bench in assessee s appeal in ITA No.7071/Mum/2017(supra) decided the issue in favour of assessee by placing relia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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.21.78 crores; the profit level indicator i.e. OP/OR works out to 12.90% for the year under consideration. The assessee submitted working of it before the TPO. Also it submitted the arithmetic mean of the profit level indicator of the comparables which worked out to 4.86% for the year under consideration. We find that in respect of management fees paid/payable during the year under consideration, the assessee had submitted before the TPO its working, calculation, all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Coordinate 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 determined by comparable uncontrolled price method; resale price method; cost plus method; profit split method; transactional net margin method or such other method as may be prescribed by the Board. Hence, the TPO is bound to determine the ALP by following one of the prescribed methods, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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