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TMI Blog2012 (9) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... Bang/2011 - - - Dated:- 20-7-2012 - SHRI GEORGE GEORGE K, AND SHRI JASON P. BOAZ, JJ. Appellant By : S/shri Amit Siryania Ankur Goel. Respondent By : Shri Farhat Hussain Qureshi. O R D E R Per Shri Jason P. Boaz : This appeal by the assessee is directed against the directions of the Dispute Resolution Panel, Bangalore (hereafter referred to as DRP) dt.21.9.2011 passed under section 144C the Income Tax Act, 1961 (herein after referred to as 'the Act') for Assessment Year 2007-08. 2. The facts of the case, in brief, are as under : 2.1 The assessee company (herein after referred to as assessee ) filed its return of income for Assessment Year 2007-08 on 14.11.2007 declaring income of Rs.41,44,70,704. The return was processed u/s.143(1) and the case was taken up for scrutiny by issue of notice u/s.143(2) on 10.9.2008. The Assessing Officer, with the prior approval of the CIT, Bangalore-I, referred the international transactions entered into by the assessee in the relevant period to the concerned Transfer Pricing Officer (TPO) for determination of the arms length price (ALP) under section92CA of the Act. The TPO after conducting the Transfer Pricing Audit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t these international transactions do not satisfy the arm's length principle envisaged under the Act and in doing so grossly erred in: 4.1. Upholding the application of Comparable Uncontrolled Price ('CUP') Method as the most appropriate method as against application of Transactional Net Margin CTNM') Method by the Appellant in the Transfer Pricing documentation. 4.2. Upholding the conclusion of the learned TPO that no commercial or economic benefits have been received by the Appellant on payment of management fees and sales commission to the Associated Enterprise. 4.3. Upholding the approach of the learned TPO of questioning the necessity of making payment of management fees and sales commission to the Associated Enterprise without appreciating the business exigencies behind such payment. 4-4. Upholding the conclusion of the learned TPO that the arm's length price of payment of management fees and sales commission as NIL, therein completely ignored the evidences provided by the Appellant in respect of services/benefit received against such payment. 5. That the learned AO and the learned Panel erred both in facts and law in confirming the action of the learned TPO of dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned adduced by the learned Assessing Officer (Ld. AO) for making this addition is that the appellant company has not explained the nature of reimbursements. - Disallowance of expenditure amounting to Rs. 3,98,38,794/- incurred by the Appellant Company on payment of management fee to its associated enterprise. The main reasons adduced by the Ld. AO for making this disallowance is that the Appellant Company has not received any service from its associated enterprise; - Disallowance of expenditure amounting to Rs. 14,04,55,153/- incurred by the Appellant Company on payment of sales commission to its associated enterprise. The main reason adduced by the Ld. AO for making this disallowance is that the Appellant Company has not received any service from its associated enterprise. That following are the additional evidences produced before your Honours (Complied as a paper book containing 742 pages). The said additional evidence are relevant for the adjudication of the issues raised in the captioned matter: - Documentary evidence describing the nature of various reimbursements received by the Appellant Company from its associated enterprise, attached herewith at page no.1 to 11 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal documents. Reliance in this regard is placed on Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963: The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any documents to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or {or any other substantial cause, or, if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them, or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced. That there cannot be any doubt about the genuineness of the said documents as they form part of regular records maintained by the appellant. That the admission of the additional evidence will cause no prejudice to the Department, the same shall only advance the cause of justice and fair play. Therefore, it is prayed that the additional evidence may be admitted and adjudicated upon. The Appellant Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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