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TMI Blog2016 (7) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... not possible to provide the details of the administrative services provided to the Indian company. Considering the functions performed by the joint venture partners as shareholders of the Indian company, the DRP found that the services rendered by the shareholders does not require any compensation from the assessee-company even as per the OECD guidelines. The DRP further found that the contribution said to be made by the joint venture partners to the sales of the existing business of the assessee-company was not available on record. In the absence of any material to indicate that services were rendered by the joint venture company, this Tribunal is of the considered opinion that the DRP has rightly confirmed the order of the Transfer Pricin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther and disposing of the same by this common order. 2. Shri G. Ravi Kumar, the Ld.counsel for the assessee, submitted that the assessee-company is a joint venture company of M/s JBM-Sung woo Private Limited. The assessee is engaged itself in the business of manufacturing and sale of sheet metal components, assemblies and sub-assemblies and supplying them to Hyundai Motors India Ltd. The assessee has paid 4% as service charges for the service rendered by the parent company. The parent company offered services in management and administration, right from the high level strategic planning, including the products to be ventured, type of customers to be targeted, etc. and also day-to-day operation of the assessee-company. The payment made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative also. According to the Ld. D.R., the assessee has not received any service from the parent company. Referring to the order of the Dispute Resolution Panel, the Ld. D.R. clarified that no evidence was filed before the Transfer Pricing Officer as well as DRP with regard to the services said to be rendered by the parent company. Referring to the directions of the DRP, the Ld. D.R. submitted that it appears that the parent company has done liaison work with Chinese authorities. If this is true, then the Indian company is not expected to make any payment for the liaison work done by the parent company with Chinese authorities. Therefore, the Ld. D.R. submitted that it is a clear case of diverting profit outside the jurisdiction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record. In the absence of any material to indicate that services were rendered by the joint venture company, this Tribunal is of the considered opinion that the DRP has rightly confirmed the order of the Transfer Pricing Officer. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. 6. Now coming to Revenue s appeals for the assessment years 2002-03 and 2007-08 in I.T.A. Nos.1692 1693/Mds/2014, the only ground is with regard to disallowance of payment of royalty. 7. Shri Duraipandian, the Ld. Departmental Representative, submitted that the assessee claims the payment of royalty as revenue expenditure for use of technical knowhow as per the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od and it is not for perpetual. The Ld.counsel further submitted that the right to use technology for manufacturing a product does not result in enduring benefit to the assessee. The right to use the technology would not make the assessee-company the owner of the technology, therefore, according to the Ld. counsel, the royalty paid by the assessee is a business expenditure for the purpose of carrying out the business. Hence, according to the Ld. counsel, it has to be allowed as revenue expenditure. 9. Referring to the directions of DRP for the assessment year 2009-10, the Ld.counsel for the assessee submitted that this issue was considered by the DRP and found that it is a recurring payment, therefore, it cannot be presumed that the paym ..... X X X X Extracts X X X X X X X X Extracts X X X X
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