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TMI Blog2018 (5) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... el/2014 - - - Dated:- 11-5-2018 - SHRI R.S. SYAL, VICE PRESIDENT AND SHRI LALIET KUMAR, JUDICIAL MEMBER For The Assessee : Shri Percy Perdiwala, Sr. Advocate And Shri Divyanshu Agrawal, Advocate For The Department : Shri Kumar Pranav, Sr. DR ORDER PER R.S. SYAL, VP: These three appeals filed by the assessee relate to assessment years 2008-09, 2009-10 2012-13. Since some of the issues raised in these appeals are common, we are, therefore, disposing them by this consolidated order for the sake of convenience. Assessment Year 2008-09 2. The only issue raised in this appeal is against the confirmation of addition of ₹ 4,55,25,620/- by the ld. CIT(A) on account of transfer pricing adjustment in the international transaction of Management group cost. 3. Briefly stated, the facts of the case are that the assessee is a wholly owned Indian subsidiary of Atotech B.V., a company incorporated in the Netherlands. The assessee is engaged in the business of manufacturing and marketing of specialty chemicals and compounds used for general metal finishing and production of printed circuit boards. The assessee reported six international t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s resulted into an addition for the equal sum by the Assessing Officer. The ld. CIT(A) echoed the assessment order in making the above addition by holding that it was not a case of CCA, but, payment for receipt of intra-group services; CUP method was applicable; and no benefit was demonstrated to have been received as a result of such services. The assessee has come up in appeal before the Tribunal. 4. We have heard the rival submissions and perused the relevant material on record. The authorities below have determined Nil ALP of the international transaction of Management group cost on the ground that either no services were obtained or it was a case of duplication of services. Further, the authorities went on to apply the benefit test for determining the ALP of such services at nil. 5. The Hon ble jurisdictional Punjab Haryana High Court in Knorr- Bremse India P. Ltd. vs. ACIT (2016) 380 ITR 307 (P H) has held that the question whether a transaction is at an arm s length price or not is not dependent on whether the transaction results in an increase in the assessee s profit. A view to the contrary would then raise a question as to the extent of profitability necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the file of TPO for determining if it was a case of CCA or intra group services. Relevant discussion has been made in para 11 of the order, whereby it has been observed that: The ld. TPO is also required to examine the nature of services whether there is cost sharing arrangement or intra group services with respect to various agreement. There is no adjudication on this issue by the Tribunal in its order for the A.Y. 2007-08. Since the matter has already been restored by the Tribunal for determining if it is a case of CCA or for intra-group services and the relevant Agreement continues to remain the same for the instant year as well, we are of the opinion that it would be just and fair if the impugned order holding payment of Management group cost as intra-group services instead of CCA, is set aside and the matter is restored to the file of Assessing Officer/TPO for deciding it in conformity with the decision taken pursuant to the directions given by the Tribunal in the other year. 8. Coming to the most appropriate method, it is found that the assessee aggregated all the international transactions and applied the TNMM on entity level. On the other hand, the TPO came to hold t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopted by the assessee. 11. Having held that the international transactions of Management Group cost should be separately benchmarked, the next crucial question is the determination of the most appropriate method. It is seen that the assessee applied the TNMM as the most appropriate method on an aggregate basis, which has been rejected by the TPO. Obviously, the TNMM applied by the assessee simply establishes the aggregate price paid for independent international transactions to be at ALP. Since the international transaction of Management Group cost has been held above to be separate, the determination of its ALP also needs to be done distinctly. 12. Insofar as the Tribunal orders in the case of the assessee on the applicability of the most appropriate method are concerned, we find that as against the assessee applying the TNMM, the TPO applied the CUP method for determining the ALP of the international transaction in the immediately preceding year. The Tribunal approved the CUP as the most appropriate method, but on the basis of a concession given by the assessee as has been recorded therein. The ld. AR did not give any concession for the applicability of the CUP as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant data or for some other genuine reasons, he is free to apply any other appropriate method for a fresh determination of the ALP of the international transaction of Management Group cost . Needless to say, the assessee will be allowed a reasonable opportunity of hearing in such fresh proceedings. 15. In the result, the appeal is allowed for statistical purposes. Assessment year 2009-10 16. This appeal by the assessee is directed against the final assessment order dated 07.01.2014 passed by the Assessing Officer u/s 143(3) read with section 144C of the Act. The only dispute in this appeal is against the addition of ₹ 5,34,99,556/- made by the Assessing Officer in the international transaction of Management group cost. 17. Both the sides are in agreement that the facts and circumstances of this appeal are mutatis mutandis similar to those of assessment year 2008- 09. Following the view taken hereinabove, we set aside the impugned order and remit the matter to the file of Assessing Officer/TPO for a fresh determination of the ALP of the international transaction of Management group cost in accordance with the observations made in our order for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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