9911796707
TMI Blog2021 (4) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... determined the ALP at NIL on the reasoning that assessee has not received the services and has not proved the benefit test. Since the facts are similar to the facts in Assessment Year 2013-14[ 2020 (2) TMI 503 - ITAT MUMBAI] , we deem it fit to follow the decision of Coordinate Bench of ITAT for Assessment Year 2013-14. Accordingly, the grounds of appeal raised by the assessee are allowed. - I.T.A. No. 689/Mum/2017 - - - Dated:- 25-3-2021 - S. Rifaur Rahman , Member ( A ) And Ravish Sood , Member ( J ) For the Appellant : Karishma R. Phatanphekar , Harsh R. Shah and Pratik Poddar , ARs For the Respondents : Anand Mohan , DR ORDER PER S. RIFAUR RAHMAN ( ACCOUNTANT MEMBER ) The present appeal has been filed by the assessee against the assessment order passed u/s. 143(3) r.w.s. 144C(13) of the Act by DCIT, Mumbai in short 'AO' for AY 2012-13. 2. The brief facts of the case are, assessee filed its return of income on 28.03.2014 declaring total income of ₹ 5,56,17,488/-. Subsequently, the case was selected for scrutiny and notices u/s. 143(2) and 142(1) along with questionnaire were issued and served on the assessee. In response, AR of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound before the Tribunal to challenge the addition of ₹ 4,88,96,708/-. They also observed that this was a substantial part of the petitioner's challenge in the appeal before the Tribunal. In support of such ground, assessee had also sought permission to produce additional evidence. Such permission was granted and additional evidence was allowed to be brought on record. They further observed that thereafter the choice before the Tribunal was either to ask the AO to take such additional evidence into account and re-decide the issue or to do itself. They observed that Tribunal disposed of the assessee's appeal without giving any answer to the assessee's challenge to the addition of ₹ 4,88,96,708/-. Accordingly, matter was remitted back to the Tribunal to decide on hand. 7. At the time of hearing, Ld. AR brought to our notice the additional evidences which are placed on record page 534 to 604 of the paper book. He further brought to our notice page 138 of the paper book which is the Management services agreement between Rolls-Royce Marine AS, Norway and other subsidiary companies. He further brought to our notice para 8.3 of DRP order and submitted that Ld. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to our notice page 133 of the paper book which is TP study submitted by the assessee and in the TP study, assessee has not followed any method except giving a general note no. 3. Further, in reference to the service agreement filed by the assessee, he submitted that what is the cost incurred and how the fees are determined by the AE for the services rendered are not clear. He further brought to our notice the details of additional evidences submitted by the assessee which is not anything but a general communication between the sisters concern. He prayed that additional evidences should be rejected and sustained the addition made by TPO/AO. 9. In rejoinder, Ld. AR submitted that assessee has already bench marked based cost allocated and he brought to our notice page 79 of the paper book and also brought to our notice OECD guidelines in this regard, wherein the uses of other method are encouraged. He further brought to our notice page 181 182 of the paper book in which assessee has submitted the basis of transactional/split profit and loss account for various business segment based on the services rendered and allocation of cost on actual basis. He further brought to our noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... length price at nil on the reasoning that the assessee has not received the service and has not proved the benefit test. Though, learned DRP has upheld the aforesaid decision of the Transfer Pricing Officer, however, accepting without prejudice submissions of the assessee, they have granted partial relief by holding that since the cost is charged back to the AEs with mark-up, no addition can be made if the payment and receipt are to the very same AE. Be that as it may, the issue before us is, whether the Transfer Pricing Officer can determine the arm's length price of an international transaction at nil without following any approved method and whether he can apply the benefit test. On a careful reading of the relevant statutory provisions i.e., section 92C and rule 10B, we are of the considered opinion that the Transfer Pricing Officer cannot determine the arm's length price of a international transaction at nil on purely ad-hoc basis without applying any one of the prescribed methods. In the facts of the present case, though, the Transfer Pricing Officer has mentioned that CUP is the most appropriate method, however, it is very much clear that he has neither applied CUP ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
