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TMI Blog2021 (9) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... pect to the international transactions in relation to payment for corporate management services and reimbursement of expenses of the respondent. 2. The Ld. DRP erred both in facts and law in confirming the action of the Ld. AO/Ld. TPO of making an adjustment to the transfer price of the Appellant in relation to transaction of corporate management services and reimbursement of expenses, holding that the international transactions does not satisfy the arm's length principle envisaged under the Income-tax Act, 1961. In doing so, the Ld. DRP grossly erred in. 2.1. Holding that corporate management services and reimbursement of expenses is in the nature of stewardship activities. 2.2. Disregarding the genuineness of the arrangement of the Appellant with its Associated Enterprise C"AE") despite furnishing a legal and contractually binding agreement with respect to transactions. 2.3. Upholding the conclusion that no commercial or economic benefits have been received by the Appellant disregarding the collective evidences provided by the Appellant to establish the benefit received from services provided by the AE. 2.4. Not considering the information/documents/clarification pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be NIL. 3. That the learned AO and the learned DRP erred in upholding the approach of the learned TPO of recharacterising the functions of CAE India from overall project management services comprising of installation, up-gradation and assembling and execution of different projects related to simulators as enunciated in the transfer pricing ("TP") documentation to a software development service provider. In doing so, the Ld. DRP grossly erred in 3.1. Disregarding application of multiple year/prior year data as used by the Appellant in the TP documentation and holding that current year (i.e. Financial Year 2010-11) data for companies should be used for comparability. 3.2. Upholding the approach of the learned TPO of rejection of comparability analysis undertaken in the TP documentation by the Appellant and in conducting a fresh comparability analysis. 3.3. Upholding the rejection of companies similar to the Appellant while performing the comparability analysis. 3.4. Upholding the approach of learned TPO of not allowing the use of financial projections for arriving at the arm's length price as submitted by the Appellant. 3.5. Upholding the approach of the learned T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t are likely to materially affect the margin. 3. Whether the Hon'ble DRP is correct in law & fact in disregarding the position of law that there could be differences between the enterprises compared under the TNMM method that are not likely to materially affect the price or cost charged or the profits accruing to such enterprises. 4. Whether the Hon'ble DRP has erred on fact in deleting M/s. E-infochips as a comparable on the ground that it fails the filter of service income less than 75% of the sales, when the said company has service income being 100% of the sales. 5. Whether the Hon'ble DRP is correct in applying "onsite revenue filter" without appreciating the fact that the function carried out is "Software Development" irrespective of whether onsite or offshore. 6. Whether the Hon'ble DRP is correct in excluding M/s. L& T Infotech Ltd., on the ground that they have significant onsite revenue without appreciating the fact that onsite development of software entails more cost 'and thereby results in lower profit margins. 7. Whether the Hon'ble DRP is correct in holding that expenses on secondment of employee is not Stewardship in nature, when th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arm's length value of the said transaction to be NIL. 3. The Ld. DRP and Ld. AO/Ld. TPO erred in failing to appreciate that once the payment for project expenses is established to be at arm's length under Transactional Net Margin Method ('TNMM'), there no further requirement of a separate analysis. 4. That the Appellant erred in mentioning that the international transaction relating to reimbursement of expenses was established to be at arm's length by considering TNMM as the most appropriate method. That the Respondent craves leave to add to and/or to alter, amend, rescind, modify the grounds herein above or produce further documents before or at the time of hearing of this Appeal." 3. The assessee has also raised an additional ground in both the appeals, which reads as follow:- "On the facts and in the circumstances of the case and in law: Transfer Pricing related 1A. The impugned order u/s. 92CA(3) of the learned Transfer Pricing Officer has been passed beyond the time limit provide under section 92CA(3A), therefore, bad in law and liable to the quashed." We shall first adjudicate the additional ground raised by the assessee. 4. At the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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