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TMI Blog2025 (5) TMI 1642X X X X Extracts X X X X X X X X Extracts X X X X ..... o the directions issued by the Hon'ble Dispute Resolution Panel - I, Bengaluru (hereinafter referred to as the Hon'ble DRP) on the following grounds which are without prejudice to one another: General ground: 1. On the facts and circumstances of the case and in contrary to law, the Deputy Commissioner/Assistant Commissioner of Income Tax, Transfer Pricing Officer - 2, Hyderabad (hereinafter referred to as 'the Ld. TPO') and the Ld. AO pursuant to the directions issued by the Hon'ble DRP erred in making a transfer pricing adjustment of INR 2,22,20,986 to the Appellant's income and thereby determining a total income of INR 12,98,27,726 and the said adjustment being wholly unjustified is liable to be deleted. Receipt of management and technical assistance services (referred to as 'intra group services'): 2. On the facts and circumstances of the case and in contrary to law, the Ld. TPO erred in and the Hon'ble DRP further erred in upholding / confirming the action of Ld. TPO, in not considering an aggregate benchmarking approach under Transactional Net Margin Method ('TNMM') for receipt of intra group services from its Associated Ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. TPO erred in and the Hon'ble DRP further erred in disregarding the documentary evidences including cost allocation workings and other factual and legal submissions, provided by the Appellant to substantiate the "Need-Benefit- Evidence' for each category of service, corresponding economic or commercial value derived on receipt of intra group services, during the course of proceedings, without providing any cogent and specific findings or defects. 9. On the facts and circumstances of the case and in contrary to law, the Ld. TPO erred and the Hon'ble DRP further erred in disregarding the supplementary benchmarking analysis maintained and submitted by Appellant during the course of proceedings, considering AE as the tested party. Corporate tax: 10. On the facts and in the circumstances of the case and in law, the Ld. AO erred in not granting of credit of tax deducted at source ('TDS') amounting to INR 13,33,073 and tax collected to source ('TCS') amounting to INR 34,995 while computing taxes payable/(refundable) for AY 2020-21. Consequential: 11. On the facts and in the circumstances of the case and in law, the Ld. AO erred in levying inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V Mane Fils S.A., France 16.39.773 15 Trade Payables P T Mane, Indonesia 85.66.959 Mane Italia SRL 1.89.354 V Mane Fils S.A., France 6.21.35.875 16 Mane (Shanghai) Fragrance & Flavors Co. Limited 43.686 17 Outstanding ECB Loan V Mane Fils S.A., France 45,00,00,000 18 Interest accrued but not due 64.86,657 19 Commission Payables Mane SA, Switzerland 16.31.825 20 Commission receivable 7.17,549 21 Trade receivables P T Mane, Indonesia 6,81,639 22 Other Payables V Mane Fils S.A., France 7,780 4. The TPO accepted all the transactions at Arms' Length, except the international transaction on account of payments made towards management and technical assistance services to the AE. In the TP study, the assessee has benchmarked all its transactions by aggregating the above international transactions including the payment towards management and technical assistance services to the AE under TNNM as the most appropriate method. The TPO has held that the assessee has not furnished any details of formula that were transferred by the AE for which the assessee has made the payment. Thus, the TPO found that in the abse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24 Taxmann.com 199 (Delhi) ii) CIT vs. Cushman & Wakefield India (P) Ltd (2014) 46 Taxmann.com 317 (Delhi). iii) CIT vs. Lever India Exports Ltd (2017) 78 Taxmann.com 88 (Bombay). iv) CIT vs. Johnson & Johnson Ltd (2017) 80 Taxmann.com 337 (Bombay). 5. The learned AR has then referred to the agreement between the assessee and the AE for management and technical assistance services and submitted that the payments towards management and technical assistance services are made under the said agreement. The terms & conditions of the agreement are binding on the parties. The assessee also referred to the invoices and the break-up details of the services provided by the AE to the assessee placed at page Nos.530 to 557 of the paper book. The learned AR then referred to the list of material/advisory services provided by the AE placed at page No.450 of the paper book, online meeting and training placed at page No.340 of the paper book. All these documents were filed before the DRP. The learned AR has submitted that even the AE charges only 5% mark-up which is at Arms' Length and therefore, when the AE has offered the income to tax in India, it cannot be a case of shifting of profit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence to prove that the AE has actually provided the management and technical assistance services to the assessee for which the payment in question is made. Now the assessee has filed the additional evidences comprising of the correspondence between the assessee and AE to show that the services were provided by the AE to the assessee. It is also an undisputed fact that the payments made by the assessee to the AE is subjected to TDS and the AE has also offered the said income to tax in India. Therefore, it is not a case of shifting of profit by the assessee for over payment to the AE when the AE has offered the income to tax in India. Accordingly, in the facts and circumstances of the case, when the assessee has filed the additional evidence in support of the claim that the payment was made by the assessee against the management and technical assistance services provided by the AE, in our considered opinion, the additional evidence filed by the assessee is required to be verified and examined at the level of TPO and then to determine the ALP as per T.P. provisions. The TPO cannot simply ignore the agreement between the parties and formula, if any, provided by the AE to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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