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TMI Blog2016 (11) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... en overall profit margin and the method has not been disturbed. The TPO for making an adjustment in the ALP has to benchmark the transaction and the ALP with the comparables under the prescribed Indian Transfer Pricing Regulations. He cannot value the ALP of the transaction at “Nil” without adhering to the proper procedure of law laid down under the Act and relevant rules. It is further noticed that, no penalty was levied in the case of the assessee for non-furnishing of the information and documents as required under section 92D(3), for which separate penal provision under section 271G have been prescribed. Thus on these facts and circumstances, prima facie we are of the opinion that no case can be made for the levy of penalty u/s 271(1)(c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in adopting the CUP method of the assessee ignoring the findings of the TPO the AO. 3. On the facts and the circumstances of the case the Ld.CIT(A) erred in deleting the penalty u/s. 271(1)(c) of the Act consequent to deleting the TP adjustment of ₹ 47,16,000/- made in respect of fees for technical services. The assessee failed to furnish any documentary evidence for the charge levied by the AE which is in the nature of services rendered by the personnel of the AE to the assessee company to support and maintain equipments supplied to customers in India. 4. On the facts and the circumstances of the case the Ld.CIT(A) erred in deleting the penalty u/s. 271(1)(c) of the Act levied on account of disallowance of deprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een set aside and remanded back for fresh adjudication, the penalty levied on the basis of impugned assessment order cannot be sustained, hence the same is directed to be deleted. 6. So far as the levy of penalty on T P adjustment of ₹ 41,61,900/-, facts in brief are that, assessee had made payment of ₹ 47,61,900/- to Kotak Polychrome Graphics, Singapore Pte. Ltd towards travel and salary costs of specialized technical personnel to provide technical support in connection with Computer to Plate Equipments which were newly launched and high end technology product at that point of time. These payments relate to the payment for personnel which included costs relating to the travelling as well as for the time spent in India by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order). Even before us the assessee, apart from a debit note, which is not legible at all (PB pg. 168), could hardly furnish any material or evidence with regard to the rendering of the services, i.e., as was the case before the Revenue authorities. The Id. AR also conceded before us to no material being available with the assessee to establish the rendering of the relevant services, which though is rendered of no consequence in the facts of the case. Under the circumstances, the assessee's grievance, as projected per its Ground No. 10, is wholly misconceived and unmaintainable. We decide accordingly 7. The penalty has been levied on such an adjustment/addition by the AO which has been deleted by the CIT(A). 8. We have heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us that the entire transaction has been benchmarked using TNMM as MAM and assessee has deducted TDS on the entire payment @ 15.7% made to the AE, the detail of which were produced before the AO. On these facts, it cannot be held that ALP adjustment can be or should be taken at Nil . Ld. Counsel before us further stated that the observation and finding of the Tribunal in the quantum order (which has been reproduced by us above) has proceeded with the issue on erroneous footing without properly appreciating the facts correctly. It was not a case of disallowance u/s 40(a)(i) by the departmental authorities but the ALP of the payment was taken at nill and moreover, Tribunal has held that debit note submitted was not legible. Now the legibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the deletion of penalty by the Ld. CIT(A) is affirmed. The relevant observation and finding of ld. CIT(A) which reads as under:- Under facts and circumstances of the case when the appellant s benchmarking of this international transaction following TNMM has not been disputed, further when such payment in the facts has not been disputed the merely for none furnishing of documents evidencing receipt of services by the appellant, there cannot be conclusion that can arrived that the benchmarking so done by the appellant either was without due diligence and lacked good faith. Accordingly, penalty so imposed on this amount of adjustment cannot be sustained and is directed to be deleted . is upheld. Thus, ground no.3 as raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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