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TMI Blog2016 (12) TMI 1589X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant is a company incorporated under the provisions of the Companies Act, 1956. It is a 100% subsidiary of M/s. Volvo Truck Corporation, AB, Sweden. It is engaged in the business of manufacture and sale of trucks, buses and distribution of construction equipment, etc. 4. The appellant filed the return of income for the assessment year 2005-06 on 31.10.2005 declaring a total income of Rs. 162,76,44,630/-. The said return of income was taken up for scrutiny assessment after issuing requisite notice under section 143(3). The AO, after noticing that the appellant had entered into following international transactions with its AE had referred the matter to the TPO for the purpose of bench marking the above international transactions with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Customer profiling done by Volvo Group 9. Assistance in drafting service agreements 10. Training of taxpayer's personnel by the technical people of Volvo group entities. Therefore, the TPO concluded that no actual services were rendered by the AE and also no benefit out of such expenditure was derived by the assessee company and therefore concluded that the ALP in respect of the above transactions is "Nil". The conclusions of the TPO on these transactions are as under: 7. Thus the AO concluded that the ALP in respect of management support services is "Nil" and suggested adjustment of Rs. 26,22,19,000/under section 92CAof the Act. The AO passed the final assessment order under section 143(3) vide order dated 19.12.2008, incorporating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttled proposition of law that it is beyond scope and powers of AO/TPO to question the necessity of incurring any expenditure. The Hon'ble Delhi High Court in the case of CIT Vs. EKL Appliance Ltd. 345 ITR 241 held that TPO cannot determine the ALP at Nil by holding that there was no need to incur any expenditure. The above decision was followed by the several coordinate benches of the Tribunal, some by them are as follows: 12. Thus in the light of the above legal position, the ALP of services of AE cannot be determined at Nil by questioning the necessity of benefits of expenditure incurred. But the matter does not end there. The onus lies on the assessee to prove that the services are actually rendered by the AE. But the assessee had faile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall deal with the alternative submission of the learned counsel for the appellant that the transaction of management and support fee should be bundled with other transactions and bench marked by adopting TNMM cannot be accepted for the reason that bundling of transactions is permissible only when the transactions are closely related to each other and reliance in this regard can be placed on the decision of Delhi High Court in the case of Sony Ericsson Mobile Communications India Pvt. Ltd., Vs. CIT 374 ITR 118 and Punjab Haryana High Court in the case Knorr Bremse India (P) Ltd., Vs. Asst. CIT 2016 (380 ITR 307). It is not the case of the appellant that these transactions are closely linked with the other transactions and therefore the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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