9911796707
TMI Blog2021 (3) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no statutory mandate to adopt the TP analysis made by the Revenue Department in the earlier years in order to make the adjustment in the subsequent years. In these circumstances, we are of the considered view that passing such an order on the basis of conjectures and surmises is in contravention of the provisions contained in Rule 10B (2) of the Income-tax Rules, 1962. Consequently, impugned order passed by the ld. CIT(A) is set aside and file is remitted back to the ld. CIT(A) to decide afresh after providing an opportunity of being heard to the taxpayer. The appeal filed by the taxpayer is hereby allowed for statistical purposes. - ITA No. 4240/Del./2017 - - - Dated:- 3-3-2021 - Kuldip Singh, Member (J) And Prashant Maharishi, Member (A) For the Appellant : Atul Jain, Advocate For the Respondents : Dhiraj Jain, Senior DR ORDER Kuldip Singh , Member ( J ) Appellant, M/s. Intercontinental Hotels Group (India) Private Limited (hereinafter referred to as 'the taxpayer') by filing the present appeal sought to set aside the impugned order dated 24.04.2017 passed by the Commissioner of Income-tax (Appeals)-1, Gurgaon in an appeal challenging the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or this initiation even when no such penalty is warranted in the present case. 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : M/s. Intercontinental Hotels Group (India) Pvt. Ltd. (IHG India), the taxpayer was incorporated as H.I. Crowe Plaza (I) Pvt. Ltd. on August 23, 1996 as subsidiary of Bass International Holdings N.V. Netherlands (now known as Six Continents International Holding B.V.) for managing and offering services mainly to Indian Hotels. IHG India provides ancillary management support services to Six Continents Hotels Inc. and to Inter Continental Group (Asia Pacific) Pte. Ltd. (IHGAP). During the year under consideration, the taxpayer entered into international transactions with its Associated Enterprises (AE) as under:- Sl. No. Nature of Transactions Value Rs. Method Applied Arm s Length Result Result of Assessee 1 Provision of Ancillary management and operational assistance services 120,925,638 TNMM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ALP to the extent of ₹ 1,09,13,894/-. However, ld. DR for the Revenue has failed to controvert the factual argument addressed by the ld. AR for the taxpayer rather relied upon the order passed by the Revenue authorities below. 8. Perusal of the impugned order passed by the ld. CIT(A) goes to prove that ld. CIT(A) instead of examining the legality of TP analysis made by the TPO as well as the taxpayer to benchmark the international transactions straightaway jumped to adopt the TP analysis made by the TPO and accepted by ld. CIT(A) in taxpayer's own case for AY 2010-11 to determine the ALP of international transactions qua provisions of support services by returning following findings:- 3.9 I have carefully considered the appellant's submissions. I have also perused the TPO order in the appellant's case for AY 2010-11 and the order of the CIT(A) in appellant's case for AY 2010-11. Following issues need to be considered in this case:- I. Whether the use of internal comparables as done by the TPO, is correct. II. The quantum of adjustment required to be made in this case. Each of the aforesaid issues is being discussed as under:- I. Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NCP FY 2010-11 (%) 1 Apitco Limited 25.07 2 Cameo Corporate Services Limited 11.03 3 Global Procurement Consultants Limited 30.86 4 Quadrant Communication Limited 14.58 5 TSR Darashaw Limited 41.32 6 H C C A Business Services Private Limited 13.99 7 HSCC (India) Limited 16.01 8 IDC (India) Limited 10.60 9 ICRA Management Consulting Services Limited 15.71 Arithmetic Mean 19.91 B. The comparables used by the TPO were upheld by the CIT(A) in his order dated 29/03/2016. The appellant has not given any explanation or justification against the comparables adopted by the TPO in appellant's own case for AY 2010-11. C. Keeping in view th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of consistency adopted the TP analysis made by the TPO and accepted by the ld. CIT(A) in taxpayer's own case for AY 2010-11 without examining the legality of the TP study conducted by the taxpayer finding its international transactions at arm's length and TP analysis of the TPO vide which he has adopted the internal comparables and proposed an adjustment of ₹ 1,39,87,736/-. 10. This method of TP analysis is unheard of as every assessment year is required to be examined independently to reach the logical conclusion to determine the ALP of international transactions. Merely because of the fact that during the year under consideration, there is no change in the business model of the taxpayer and the services rendered are identical, there is no statutory mandate to adopt the TP analysis made by the Revenue Department in the earlier years in order to make the adjustment in the subsequent years. In these circumstances, we are of the considered view that passing such an order on the basis of conjectures and surmises is in contravention of the provisions contained in Rule 10B (2) of the Income-tax Rules, 1962. Consequently, impugned order passed by the ld. CIT(A) is set a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
