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TMI Blog2016 (2) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... tted before the authorities below. Further, the genuineness of the documents which were relied on by the authorities have not been doubted by the Department. Thus, in view of the above, we do not find any illegality and infirmity in the orders and further we are of the opinion that a concurrent finding of fact on the basis of the documents on records was recorded by the First Appellate Authority as well as the Second Appellate Authority. Accordingly, no question of law arises out of the judgment rendered by the authorities below. - GA 2314 of 2015, ITAT 96 of 2015, GA 2318 of 2015, ITAT 95 of 2015 - - - Dated:- 8-1-2016 - RAJIV SHARMA AND SHIVAKANT PRASAD, JJ. For The Appellant : Md. Nizammuddin, Adv. For The Respondent : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... length price of the relevant transactions undertaken by the appellant with 12A and 12B while selecting 12A and 12B as the tested party . From the facts and documents presented before me, I find that the appellant s business arrangement with its foreign subsidiaries can be categorised into the following two revenue sharing models: Model 1- In this model, the agreement are executed between the appellant and the overseas customers. In cases where the appellant retains 75 of the revenue and pays 25% of the revenue to its subsidiaries 12A/12B for the marketing the administrative support services provided by them in terms of the Master Service Agreement entered into between the appellant and the AE s namely 12A/12B. Model 2- I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract. The entire capabilities and financial strength in this regard lie with the Appellant in India and thus, as per the very conduct of the parties while doing business, it can be said that the Appellant bars the full risk of such maters under either of the two models, as enunciated above. The TPO observed that the foreign customers, while entering into the contracts with 12A or 12B would be in a position to hold such entities responsible for failure of delivery/non-performance of the contract and thus in cases of such direct dealings, 12A and 12B bear greater risk as compared to the other model where the customers enter into contracts directly with the appellant. In my view, this logic is flawed. The determinant factor is not whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s arbitrary fixation of the remuneration model of 13% /15% revenue sharing in the later scenario, namely whether the customers enter into contracts directly with the appellant, since the same appears to be without any basis whatsoever. Further, as discussed above, the logic of the TPO in coming to the conclusion of difference in functional and risk profiles under the two scenarios, appear to be erroneous. I also find support from the decisions of the Hon ble Mumbai Tribunal rendered in the case of DCIT 9(2) Vs M/s Indo American Jewellery Ltd (ITA No.6194/Mum/2008) and ITO 10(3)(4) Vs M/s. Zyds Atlanta Healthcare Pvt. Ltd. (ITA No.3311 3312/Mum/2008), which have been relied upon by the appellant that of the appellant enjoys tax holiday or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al has erred in law as well as on facts in holding that the adjustment made by the TPO of ₹ 6,25,88,125/- on account of Account Management charges is arbitrary without considering fact that even if the issue enjoys certain tax benefits, the adjustments in Arm s Lengh Price would still be made? iii) Whether on the facts and in the circumstances of the case Ld. Tribunal has erred in law as well as on facts in holding that the adjustment made by the TPO of ₹ 6,25,88,125/- on account of Account Management charges is arbitrary without considering the fact that the foreign clients choose to bypass assesses foreign subsidiaries which indicates that by action in this manner, the foreign clients reduced their risk perception? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risk perception? iv) Whether on the facts and in the circumstances of the case conclusion arrived at by the Ld. Tribunal in granting the aforesaid relief to the assessee, is perverse? The submission of the appellant that the adjustment of TPO towards Account of Management charges is arbitrary has been dealt by the First as well as the Second Appellate Authority and a concurrent finding of fact has been recorded that the TPO in principle accepted the remuneration model of 25% revenue sharing and the same has been substantiated and justified by the documents so submitted before the authorities below. Further, the genuineness of the documents which were relied on by the authorities have not been doubted by the Department. Thus, in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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