9911796707
TMI Blog2024 (3) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... law and on facts in upholding the action of Ld. AO. in determining the ALP of international transactions of the appellant at Rs. 11,85,928301- and thereby making an addition of 1,80,70,738/- on account of alleged difference in ALP, on the basis of order of Ld.TPO u/s 92CA (3), more so when the same was beyond jurisdiction of the A.O and was made by recording incorrect facts and findings. 2. That having regard to the facts and circumstances of the case, the Ld.CIT(A) has erred in holding that the reference made to the transfer pricing officer u/s 92CA(3) by Ld.A.O. is in conformity with law and facts of the case. 3. That having regard to the facts and circumstances of the case, Ld.CIT(A) has erred in upholding the action of the Ld. TPO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions between the assessee and its Associated Enterprise [AE] have been identified to be international transactions: (1) Provision of Administrative and Agency Services The assessee provides administrative and marketing support services to four of its AEs - namely: (i) NCD Infrared Engineering Ltd - UK, (ii) Red Lions Controls Inc - USA, (iii) Servomex Group - UK and (iv) Ircon Inc - Us For providing such services, the assessee receives fees on cost plus mark-up basis and mark-up basis is 6% on cost in case of Servomex Group and 10% on cost in case of other AEs. The assessee also provides Agency services to Spectris Singapore for selling the equipment and spare parts in India, Nepal and Sri Lanka. For providing such servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has misunderstood the facts in true perspective while doing FAR analysis of the assessee. 8. The quarrel revolves around the following observations of the TPO confirmed by the ld. CIT(A): "5.2 The FAR analysis of the assessee revealed that the 'Provision of AMC services' was inextricably linked to other functions being performed by the assessee, i.e, Purchase of equipment, Provision of marketing and administrative support services, Provision of agency services, purchase of spare parts and equipments and other related activities. However, it was found that the assessee had artificially segmented its accounts into two segments viz. AE and non AE segments for Transfer Pricing purposes. This has been carried out so as to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port function and provision of agency support function performed y the assessee. 4. In view of above analysis, it is proposed to aggregate the income and expenditure with respect to AE and non AE segments which have been artificially created for transfer pricing purposes to show profitability in the AE related services and losses in the C business wherein the AMC business is clearly and inextricably linked to the main business of the assessee." 9. The ld. counsel for the assessee further objected to the observations of the TPO that no basis for allocation of expenses relating to income streams between two segments have been furnished by the assessee and also pointed out that the TPO has grossly erred in analyzing the assets utilized and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee deploys necessary assets for performing its business. It does not own any manufacturing facilities, research and development facilities or other significant assets for this activity. Employees of the assessee possess technical knowledge especially those who are involved in providing AMC services. 13. However, under provision of Agency and Marketing support services, R & D are undertaken by the AE of the assessee. All the spare parts and equipment supplied to the assessee are manufactured by its AE. The AE of the assessee is responsible for maintaining the requisite inventory levels of all the spare parts and equipment. The assessee does not employ any specific assets, tangible asset for providing agency and administrative servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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