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2023 (8) TMI 809 - AT - Income TaxTP Adjustment - ALP of the services provided by the AE (China) to the assessee - eligibility of benefit test - TPO deciding the value of the services at Rs. Nil. - TPO held that assessee has not furnished any evidence regarding the services availed - AR pleaded that assessee has established receipt of services and also established that it was benchmarked using TNMM. Once TPO has accepted assessee s TNMM result, TPO cannot take out one single transaction and separately benchmarked. HELD THAT - The entire thrust of TPO was that assessee failed to provide necessary evidence that assessee had received intra group services. However, once the ACIT(IT), Circle-1, Pune has held that Benteler Automotive (China) Investment Ltd., had provided services, the finding of TPO that no services were received becomes erroneous. Therefore, the adjustment made by the TPO on the basis that no services were received becomes erroneous. Hence, TPO is directed to delete the adjustment - Decided in favour of assessee. Short credit of MAT - Assessee has submitted that he has already filed rectification application before the AO but AO has not acted on it - HELD THAT - We direct the AO to verify the assessee s claim of short credit of MAT. The AO shall give opportunity to the assessee before deciding the same.
Issues Involved:
1. Validity of the assessment order. 2. Transfer Pricing adjustments. 3. Erroneous computation of Minimum Alternate Tax (MAT) credit. 4. Initiation of penalty proceedings. 5. Levy of interest under Sections 234B and 234D. Summary: Issue 1: Validity of the Assessment Order The assessee claimed the assessment order was void-ab-initio due to a violation of natural justice principles. However, the Tribunal observed that the Dispute Resolution Panel (DRP) had provided adequate opportunities to the assessee. Therefore, Ground No. 1 was dismissed. Issue 2: Transfer Pricing Adjustments The primary issue was the Arm's Length Price (ALP) of services provided by Benteler Automotive (China) Investment Ltd. to the assessee. The Transfer Pricing Officer (TPO) and DRP concluded that no chargeable intra-group services were received, setting the ALP at Rs. Nil. However, the Tribunal noted that the Assistant Commissioner of Income Tax (IT), Circle-1, Pune had previously recognized that Benteler China provided various managerial services to the assessee. Consequently, the Tribunal found the TPO's adjustment erroneous and directed the deletion of the Rs. 11,52,81,428/- adjustment. Grounds No. 3 to 12 were allowed. Issue 3: Erroneous Computation of MAT Credit The assessee contended that the Assessing Officer (AO) had granted short credit for MAT. The Tribunal directed the AO to verify the claim and provide an opportunity for the assessee to present their case. Grounds No. 13, 15, and 16 were allowed for statistical purposes. Issue 4: Initiation of Penalty Proceedings The ground related to the initiation of penalty proceedings under Section 270A was considered premature and was dismissed. Ground No. 14 was dismissed. Issue 5: Levy of Interest under Sections 234B and 234D The Tribunal directed the AO to verify the assessee's claims regarding the erroneous computation of interest under Sections 234B and 234D and to decide the matter as per law after giving the assessee an opportunity to be heard. Grounds No. 15 and 16 were allowed for statistical purposes. General Grounds: Ground No. 2 was dismissed as it was general in nature and had been addressed in the discussion of other issues. Conclusion: The appeal of the assessee was partly allowed, with specific directions for verification and correction of certain claims. The order was pronounced in open court on 29th March 2023.
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