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TMI Blog2015 (7) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... %. For the assessment year 2008-09, the TPO has accepted the payment made for intra group services wherein held that the payment is made towards ‘cost contribution’ and the taxpayer has also submitted the payment is in nature of ‘reimbursement of allocated costs’ which amounts to 6.99% of the local allocation made the Filtrona UK Limited to all the AEs at a mark-up of 5.8%. As it is evident from the facts and submissions, the payment is clearly for the ‘cost contribution’ and therefore, there should not be any mark-up on such allocations made by the Parent Company. Hence, for the same reason, the mark-up of 5.8% paid towards ‘cost contribution’ is not at arm’s length and the ALP for the markup is treated as nil. No error or illegality in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entity level was 33.31% as compared to mean margin on cost of the comparables selected by the TPO at 10.11%. The TPO accepted TNMM as most appropriate method for determination of ALP in respect to all other international transactions except the payment for intra group services. The assessee is making the payment for intra group services with a markup of 5.8% whereas the TPO has determined the ALP in respect of the group services at nil by holding that the intra group services did not result increase any profit margin. 4. On appeal, the CIT(A) has allowed the payment for intra group at cost by excluding the mark-up of 5.8% and accordingly, directed the AO/TPO to make the adjustment to the extent of 5.8% mark-up of cost. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of intra group services was accepted y the TPO at arm s length under the TNMM where the percentage of profit on cost of assessee at entity level was only 16.31% in comparison to the current years margin at 33.31%. We find that for the assessment year 2008-09, the TPO has accepted the payment made for intra group services as under; However, from the submissions made by the taxpayer and facts of case, it is seen that the payment is made towards cost contribution and the taxpayer has also submitted the payment is in nature of reimbursement of allocated costs which amounts to 6.99% of the local allocation made the Filtrona UK Limited to all the AEs at a mark-up of 5.8%. As it is evident from the facts and submissions, the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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