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TMI Blog2021 (1) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... wed for statistical purposes. - IT(TP)A No.2196/Bang/2017 - - - Dated:- 12-1-2021 - Shri Chandra Poojari, AM And Shri George George K, JM Appellant by : Sri.K.R.Vasudevan, Advocate Respondent by : Sri.Sunil Kumar Singh, CIT-DR ORDER Per George George K, JM This appeal at the instance of the assessee is directed against the final assessment order dated 21.09.2017 passed u/s 143(3) r.w.s. 144C(13) of the I.T.Act. The relevant assessment year is 2013-2014. 2. The assessee has raised seven grounds. All the grounds relate to the solitary issue regarding Arms Length Price (ALP) adjustment amounting to ₹ 1,33,76,590 made to group service fees paid by the assessee to its Associate Enterprises (AEs). 3. The b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O. passed final assessment order dated 21.09.2017. 6. Aggrieved by the final assessment order passed u/s 143(3) r.w.s. 144C(13) of the I.T.Act, the assessee has preferred this appeal before the Tribunal. The learned AR submitted that an identical issue was considered by the Tribunal in assessee s own case for assessment year 2012-2013 in IT(TP)A No.290/Bang/2017 (order dated 25.11.2020). The learned AR submitted that the Tribunal in assessee s own case for assessment year 2012-2013 (supra), had restored the matter to the AO/TPO directing to determine the ALP afresh for the group service fees paid by determining the most appropriate method and comparability analysis. 7. The learned Departmental Representative also agreed that the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P of such transaction. Ld.TPO cannot consider ALP at NIL and value of transaction has to be computed as per law. 19. The Income Tax Act provides computation of arms length price of any international transaction as under: Computation of income from international transaction having regard to arm's length price. 92. (1) Any income arising from an international transaction shall be computed having regard to the arm's length price. Explanation.- For the removal of doubts, it is hereby clarified that the allowance for any expense or interest arising from an international transaction shall also be determined having regard to the arm's length price. (2) Where in an international transaction [or specified domestic tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost or expenses allocated or apportioned to such enterprise or contributed by such enterprise shall be determined having regard to Arm s length price of such benefit, service or facility received by the enterprise. In order to satisfy arm s length price participant s contributions must be consistent with what an independent enterprise would have agreed to contribute under comparable circumstances considering the benefits it expects to derive from the agreement. 21. We direct Ld.TPO to judge the requirement of services from viewpoint of assessee as a businessman. Therefore in this regard we are of view that assessee has to substantiate that these services are required by it. We note that assessee has entered into Intra Group Service a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts his business is entirely his prerogative and it is not for the revenue authorities to decide what is necessary for an Assessee and what is not. An Assessee may have any number of qualified accountants and management experts on his rolls, and yet he may decide to engage services of outside experts for auditing and management consultancy; it is not for the revenue officers to question Assessee's wisdom in doing so. The Transfer Pricing Officer was not only going much beyond his powers in questioning commercial wisdom of Assessee's decision to take benefit of expertise of Dresser Rand US, but also beyond the powers of the Assessing Officer. We do not approve this approach of the revenue authorities. We have further noticed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at all, and that since there is No. evidence of services having been rendered at all, the arm's length price of these services is 'nil'. 23. Another aspect that was made clear by coordinate bench of this Tribunal in Delloite Consulting India (P.) Ltd. v. Dy. CIT/ITO reported in [2012] 137 ITD 21/22 taxmann.com 107 (Mum) is that: 37. On the issue as to whether the Transfer Pricing Officer is empowered to determine the arm's length price at nil , we find that the Bangalore Bench of the Tribunal in Gemplus India (P.) Ltd. v. Asstt. CIT [IT Appeal No. 352 (Bang.) of 2009, dated 20- 10- 2010] held that the assessee has to establish before the Transfer Pricing Officer that the payments made were commensurate to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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