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TMI Blog2020 (8) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... file of the AO as in his remand report, the AO has not made any comment on the cost benefit analysis - as per CIT-A AO was not justified in adopting CUP method and determining the ALP of the transaction as NIL and consequently making an adjustment to the income - HELD THAT:- We do not find any force in this contention of the ld. DR. In our considered opinion, no second innings should be given to appreciate the same set of facts which were already before the Assessing Officer. Moreover, in the remand report, the Assessing Officer himself has accepted that if the management fees had not been paid by the appellant, the true up adjustment received would have been ₹ 2.51 crores only and profits of the appellant would have been less than th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is engaged in the business of importing of cars as completely built units for the purpose of distribution in the Indian market. This is the first financial year of the assessee s business operations. 5. During the year under consideration, the assessee has made a payment of ₹ 2,94,56,764/- to its parent company on account of management service fees on which taxes were deducted at source. The assessee earned margin of 1.59% from its operations and as per TP study carried out by the assessee, average margins of comparable companies was shown at 1.86% and since the margin of the assessee with comparable companies was within +/- 5% range, international transactions were concluded to be at arms length. 6. During the course of sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r non-payment of management charges would result in receipt of lesser amount of true-up adjustment consequently reduction of profit of appellant? 5. Whether appellant has deducted withholding tax and service tax on management charges paid to AE during relevant assessment year? 6. Whether details of services rendered by the AE and service agreement were submitted by appellant during the time of assessment proceedings? 7. Whether in circumstance mentioned above, disallowance of management charges paid by appellant to its AEs is justified? 10. Vide his report dated 06.01.2016, the Assessing Officer submitted his report on the points raised by the ld. CIT(A). 11. After considering the facts and submissions and the remand report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lysis has been furnished by the appellant during the remand proceedings. (vi) The details of services rendered by the AE have been shown in the service agreement which was duly provided by the appellant to the AO as is evident from the remand report. (vii) No adjustment on account of management services fee has been made by the TPO/AO in the assessment orders for A.Y. 2011-12 and A.Y. 2012- 13. 3.13 From the facts discussed above it is evident that the AO s observation that this expenditure has been debited to the profit and loss account to inflate the expenses and thereby reduce the taxable profits in India is not borne out from the facts on record. Further as mentioned above, the claim of management service fee paid by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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