9911796707
TMI Blog2021 (2) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... Charges, cost benefit analysis of Regional Management Charges, reasons for availing intra group services, nature of services availed, basis of charges, etc. The ld. Departmental Representative has not disputed that the nature of expenditure in respect of Regional Management Charges in the impugned assessment year is in any manner different from that in the preceding assessment year.[ 2021 (2) TMI 773 - ITAT MUMBAI] .- Appeal by the assessee is allowed. - ITA No. 2163/MUM/2017 - - - Dated:- 3-2-2021 - Vikas Awasthy , Member ( J ) And N. K. Pradhan , Member ( A ) For the Appellant : Madhur Agrawal and Dhiren For the Respondents : Sushil Kr. Mishra and Sunil Deshpande ORDER This appeal by the assessee is directed against the assessment order dated 30/01/2017 passed under section 143(3) r.w. section 144C(13) of the Income Tax Act, 1961 (in short 'the Act') for the assessment year 2012-13. 2. Shri Madhur Agrawal, appearing on behalf of the assessee submitted that the solitary issue raised by the assessee in present appeal is against the Transfer Pricing adjustment in respect of Regional Management Charges. The ld. Authorized Representative for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AE and benefits derived by the assessee from such services. 5. We have heard submissions made by rival sides and have examined the orders of authorities below. The assessee in appeal has raised six grounds. All the grounds are directed towards single issue of T.P adjustment in respect of Regional Management Charges. We find that identical issue had come up before the Coordinate Bench in assessee's own case for assessment year 2011-12. The contention of the assessee is that the nature of services rendered by the AE in impugned assessment year and in assessment year 2011-12 are identical. This submission of the assessee also find support from the observations of the DRP in para 2.3 and para 2.3.2 of the directions dated 01/12/2016. The same are reproduced herein below for ready reference: 2.3 We have considered the submission made by the assessee, the findings of the TPO and the material on record. We find that the issue is covered by the decision of the DRP in the case of assessee for A.Y 2011-12. xxxxxxxxxx xxxxxxxxx xxxxxxxxx 2.3.2 In the previous year under consideration and also, the assessee has failed to establish that services, if any, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decision making and adoption of the best policies and practices which had therein resulted in a better market position and ultimate increase in its sales. As observed by us hereinabove, the A.O/TPO had determined the ALP of the regional management services received by the assessee from its AE at Rs. nil, for the reason, that no material was placed on record by the assessee which would evidence availing of any such services by the assessee from its AE. We have perused the material available on record and are afraid that the aforesaid observation of the lower authorities do not find favour with us. On a perusal of the Regional Services Agreement , dated 23.11.2010 executed between the assessee and its AE, viz. Henkel AG Company, KGaA, we find that the complete details of the regional management services to be rendered by the AE to the assessee are therein clearly described at length. Further, the assessee had in the course of the proceedings before the lower authorities placed on record the copies of the debit notes which were raised on it by its AE viz. Henkel AG Company, KGaA for rendering of the aforesaid services. Also, copies of the various e-mail correspondences betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendering of regional management services by its AE, viz. Henkel AG Company, KGaA to the assessee company. We are persuaded to subscribe to the claim of the ld. A.R that as the regional management services received by the assessee from its AE are intangible in nature, therefore, evidence in support of availing of such services and the benefit received therefrom can only be demonstrated by narrations, descriptions and documentary evidence................................. On the basis of our aforesaid observations, we are of a strong conviction that the material placed on record by the assessee to substantiate its claim of having received regional management services from its AE, viz. Henkel AG Company, KGaA therein clearly establishes the same. We thus are unable to persuade ourselves to subscribe to the view taken by the AO/TPO that the assessee had failed to substantiate its claim of having received regional management services from its AE during the year under consideration. 10. Apart from our aforesaid observations wherein it stands clearly established that the assessee had received regional management services from its AE, viz. Henkel AG Company, KGaA, we are even o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra group services, nature of services availed, basis of charges, etc. The ld. Departmental Representative has not disputed that the nature of expenditure in respect of Regional Management Charges in the impugned assessment year is in any manner different from that in the preceding assessment year. 7. We further observe that in subsequent assessment year i.e. assessment year 2013-14, as well, the TPO had made similar transfer pricing adjustment in respect of Regional Management Charges. The assessee carried the issue in appeal before the Tribunal in ITA No. 6999/Mum/2017. The Tribunal vide order dated 11/01/2021 following its own order in ITA No. 1049/Mum/2016(supra) deleted the addition in respect of Regional Management Services. 8. Considering the fact that in the impugned assessment year the services were rendered by AE in pursuance to the same Regional Services Agreement dated 23/11/2010 and there has been no change in the nature of services rendered by AE and method of remuneration, we see no reason to take a different view. Therefore, in the facts of the case and the decisions of Co-ordinate Bench in assessee's own case for assessment year 2011-12 and assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
