9911796707
TMI Blog2016 (12) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... in the shape of service charges and corporate services received from its AEs - Held that:- As relied upon CIT vs. EKL Appliances (supra) and further contended that during the AY 2010-11 and AY 2012-13 in assessee’s own case, the revenue has accepted the contention of the assessee that intra-group services have actually been received by the assessee from its AEs. Even otherwise, there is a mistake apparent on record that the TPO/DRP have treated ₹ 3,14,87,895/- as adjustment u/s 92A on account of intra-group services when the assessee has actually charged to profit & loss account of ₹ 2,57,91,160/- for intra-group services received and claimed in returned income for the year under assessment after offering ₹ 48,20,700/- as prior period charges. So, the TPO required to verify all these facts and to decide the issue afresh after providing an opportunity of being heard to the assessee. So, this issue is also restored to the TPO. - ITA No.1592/Del./2014 - - - Dated:- 22-9-2016 - SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER and SHRI KULDIP SINGH, JUDICIAL MEMBER For The Assessee : Shri Vidur Puri, CA For The Revenue : Shri Munesh Kumar, CIT DR ORDER PE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t support service charged by ₹ 6,49,905 to ₹ 54,28,236 instead of actual receipts of ₹ 47,78,331. 6. On the facts and in law, the ld. AO, ld. TPO and hon'ble DRP erred in not allowing benefit of variation of 5% while determining the additions of ₹ 4,42,08,235 on the basis of arm's length price of international transaction, which is allowable as per Proviso to section 92C (2) of the Income Tax Act, 1961. 7. On the facts and in law, the ld. AO erred in not allowing MAT credit of ₹ 56,28,145 u/s 115JAA of the Income Tax Act, 1961. 8. On the facts and in law, the ld. AO erred in excess interest charged u/s 234B of the Income Tax Act. 9. On the facts and in law, the ld. AO, ld. AO erred in excess interest of ₹ 3,96,342 charged u/s 234C of the Income Tax Act, 1961 which is chargeable on the returned income. 2. Briefly stated the facts of this case are : assessee group comprises Magotteaux Group SA founded in 1920 in Liege by Lucien Magotteaux and is market leader in both grinding media and castings. Assessee group provides worldwide adapted solutions i.e. products and expertise to increase the wear resistance to abrasion, corros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Sale of finished goods 23,16,64,685 3. Payment of Royalty 1,20,70,435 4. Receipt of services 3,14,87,895 5. Provision of support services (amount received) 47,78,331 6. Cost Reimbursement (paid) 2,50,51,980 7. Other receipts 16,99,028 8. Interest on loans 42,26,328 9. It is also not in dispute that assessee company had debited the payment to the tune of ₹ 1,20,70,435/- on account of payment of royalty during the year under consideration and justified the payments of these amounts by aggregating transactions along with other international transactions based on CUP. Assessee claimed that the comparables operating margin is 5.25% and that of assessee is 6% (on the net sales of XWIN products), 4.5% (on net sales of classic products) and however, effective rate or royalty is 1.91%. 10. TPO as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in disallowing brand fee in computation of ALP - Held, yes [In favour of assessee] 12. Keeping in view the law laid down by the Hon ble jurisdictional High Court and the fact that the contention of the assessee company that the payment on account of royalty by aggregating transaction along with all other international transactions based on CUP has been accepted by the revenue in assessee s own case qua AY 2010-11 and 2012-13 (TPO vide order dated 30.01.2014 qua AY 2010-11 held that on the basis of functional and economic analysis of assessee company and that of comparables, no adverse inference is drawn in respect of the international transaction undertaken by the assessee during FY 2009-10), we are of the considered view that the matter is required to be remanded to the TPO to decide afresh on furnishing the facts by the assessee after providing an opportunity of being heard to the assessee. Consequently, grounds no.2.1, 2.2 2.3 are determined in favour of the assessee for statistical purposes. GROUNDS NO.3.1, 3.2, 3.3 4 13. Ld. TPO/DRP have made adjustment in respect of intercorporate services to the tune of ₹ 3,14,87,895/- on the ground that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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