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2019 (5) TMI 1796 - AT - Income TaxTP Adjustment - Determination of arms length price by the Assessing Officer / TPO / DRP for management support services received by the assessee - HELD THAT - As decided in own case 2018 (4) TMI 503 - ITAT KOLKATA determination of ALP for Management Support Services at Rs NIL is unwarranted and accordingly the upward adjustment made by the ld TPO Arm s length price for advertising marketing and promotion (AMP) expenses - HELD THAT - As in assessee s own case 2018 (4) TMI 503 - ITAT KOLKATA for assessment year 2013-14 whereby the issue of arm s length price for advertising marketing and promotion expenses (AMP) have been discussed and adjudicated in favour of the assessee. Determination of arm s length price for information technology (IT services) - HELD THAT - As decided in own case 2017 (12) TMI 1117 - ITAT KOLKATA is no change in facts and law and the revenue is unable to produce any material to controvert the above said findings of the Co-ordinate Bench. We find no reason to interfere in the order of the division bench and the same is hereby upheld. Therefore respectfully following the decision of Co-ordinate Bench we allow ground raised by the assessee. Adjustments made by the TPO on a without prejudice basis in respect of the other segments namely consumer Lifestyle Distribution Healthcare distribution and Healthcare contract Manufacturing division - HELD THAT - As decided in own case 2018 (3) TMI 211 - ITAT KOLKATA issue is squarely covered in favour of the assessee. Nature of expenses - lease rent paid in respect of motor cars - revenue or capital expenditure - HELD THAT - As the issue is squarely covered in favour of the assessee by the decision of Co-ordinate Bench in assessee s own case 2018 (4) TMI 503 - ITAT KOLKATA and there is no change in facts and law and the revenue is unable to produce any material to controvert the above said findings of the Co-ordinate Bench. We find no reason to interfere in the said order of the Co-ordinate Bench and the same is hereby upheld. Excess depreciation to the tune of 15% claimed by the company on moulds - HELD THAT - As the issue is squarely covered in favour of the assessee by the decision of Co-ordinate Bench in assessee s own case ( 2018 (4) TMI 503 - ITAT KOLKATA ( where the ITAT restored this matter back to the file of AO for fresh adjudication and the assessee is at liberty to adduce fresh evidences before the ld AO in support of its contentions ) and there is no change in facts and law and the revenue is unable to produce any material to controvert the above said findings of the Co-ordinate Bench. We find no reason to interfere in the said order of the Coordinate Bench and the same is hereby upheld. Therefore respectfully following the decision of Co-ordinate Bench we allow ground raised by the assessee for statistical purposes. Directions to Compute correctly DDT and grant credit for the amount of DDT paid by the assessee after appropriate verification and examination of the facts.
Issues Involved:
1. Determination of arm's length price (ALP) for management support services (MSSA). 2. Determination of ALP for advertising, marketing, and promotion (AMP) expenses. 3. Determination of ALP for information technology (IT) services. 4. Rule of consistency. 5. Variation of 3% from the arithmetic mean. 6. Adjustments made by the Transfer Pricing Officer (TPO) on a without prejudice basis in respect of other segments. 7. Use of non-contemporaneous data by the TPO. 8. Disallowance of lease rent paid in respect of motor cars treating the same as capital expenditure. 9. Disallowance of excess depreciation claimed on moulds. 10. Short grant of tax deducted at source (TDS) / tax collected at source (TCS). 11. Interest under sections 234A and 234B. 12. Levy of additional tax and interest on distributable profits. Detailed Analysis: 1. Determination of ALP for Management Support Services (MSSA): The assessee's appeal regarding MSSA was adjudicated in its favor. The Tribunal referred to its previous order for the assessment year 2013-14, where similar issues were discussed and resolved favorably for the assessee. The Tribunal noted that the TPO had treated MSSA as stewardship services and valued the ALP at NIL. However, the Tribunal found that the assessee had provided detailed benefits derived from MSSA during assessment proceedings, which were ignored by the TPO. The Tribunal emphasized the principle of consistency and cited previous decisions, including those of the Hon’ble Supreme Court and High Courts, supporting the assessee's claim. Consequently, the upward adjustment made by the TPO was deleted. 2. Determination of ALP for Advertising, Marketing, and Promotion (AMP) Expenses: The Tribunal upheld the assessee's appeal, referring to its previous order for the assessment year 2013-14, where the AMP expenses were not considered an international transaction. The Tribunal relied on the judgment of the Hon’ble Delhi High Court in Maruti Suzuki India Limited vs. CIT, which held that AMP expenses do not constitute international transactions. The Tribunal dismissed the revenue's argument and directed the deletion of the upward adjustment made by the TPO. 3. Determination of ALP for Information Technology (IT) Services: The Tribunal decided in favor of the assessee, referring to its previous order for the assessment year 2011-12. The Tribunal emphasized the principle of consistency, noting that the assessee had been claiming IT expenses for several years without denial. The Tribunal cited the Hon’ble Supreme Court's decision in Radhasoami Satsang vs. CIT, which supports maintaining consistency in the absence of material changes. The Tribunal reversed the lower authorities' decision and allowed the assessee's appeal. 4. Rule of Consistency: The assessee did not press this ground, and it was dismissed as not pressed. 5. Variation of 3% from the Arithmetic Mean: The assessee did not press this ground, and it was dismissed as not pressed. 6. Adjustments Made by the TPO on a Without Prejudice Basis in Respect of Other Segments: The Tribunal referred to its previous order for the assessment year 2012-13, where similar adjustments were discussed. The Tribunal noted that the TPO's passive observations were ignored by the lower authorities and had no relevance in the proceedings. The Tribunal upheld the decision, finding no reason to interfere. 7. Use of Non-Contemporaneous Data by the TPO: The assessee did not press this ground, and it was dismissed as not pressed. 8. Disallowance of Lease Rent Paid in Respect of Motor Cars Treating the Same as Capital Expenditure: The Tribunal referred to its previous order for the assessment year 2013-14, where the issue was resolved in favor of the assessee. The Tribunal cited the Hon’ble Supreme Court's decision in ICDS Ltd vs. CIT, which supports the deduction of lease rentals paid for motor cars taken on finance lease. The Tribunal allowed the assessee's appeal. 9. Disallowance of Excess Depreciation Claimed on Moulds: The Tribunal referred to its previous order for the assessment year 2013-14, where the issue was restored to the AO for fresh adjudication. The Tribunal directed the AO to verify the assessee's claim and allowed the appeal for statistical purposes. 10. Short Grant of TDS / TCS: The Tribunal directed the AO to verify the TDS certificates and grant credit to the assessee in accordance with the law. 11. Interest under Sections 234A and 234B: The Tribunal noted that these grounds are consequential in nature and do not require adjudication. 12. Levy of Additional Tax and Interest on Distributable Profits: The Tribunal directed the AO to compute the correct Dividend Distribution Tax (DDT) and grant credit for the amount paid by the assessee after appropriate verification. Conclusion: The appeal of the assessee was allowed as per the detailed discussions on each issue, with specific directions given for verification and fresh adjudication where necessary. The Tribunal's order was pronounced on 15.05.2019.
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