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TMI Blog2021 (4) TMI 1283X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered view that the issue needs to be set aside to the file of the AO for limited purpose verification of facts with regard to rendering of services by the AE to the assessee in connection with payment of management fees. In case, the assessee produced particulars of actual receipt of services, then the TPO is directed to accept the TP study conducted by the assessee by applying TNMM as the most appropriate method and delete TP adjustment made towards management fees - Appeal filed by the assessee is allowed for statistical purposes. - ITA No.2095/Chny/2017 - - - Dated:- 12-4-2021 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER Appellant by: Mr. Ashik Sha, CA Respondent by: Mr .G. Srinivasa Rao, CIT Mrs. R. Anita, JCIT ORDER PER G. MANJUNATHA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the final Assessment Order passed by the Assessing Officer u/s.143(3) r.w.s.144C(13) of the Income Tax Act, 1961 (in short Act ) dated 30.06.2017, in turn which was passed in pursuant to the directions of the Dispute Resolution Panel-2, Bangalore, issued u/s.144C(5) of the IT Act, 1961, and pert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the services received were incidental and in the nature of stewardship or shareholder services; and that the services were duplicative in nature, 9. The ld. TPO and the Id. DRP erred in not considering the information and documents submitted by the appellant. 10. The Appellant craves leave to add, substitute, amend, delete, or otherwise modify any of the grounds of appeal stated hereinabove before commencement of or at the time of hearing. 3. The brief facts of the case are that the assessee, M/s.Control Techniques India Pvt. Ltd., is the wholly owned subsidiary of M/s.Control Techniques India Pvt. Ltd., UK (CTL-UK). The assessee is engaged in the business of manufacturing and sale of electric drives for electric motors. During the year under consideration, the assessee has reported various international transactions entered into with its Associated Enterprises (in short AE ) which are tabulated below: Nature of International transaction Amount (in Rs.) MAM PLI Margin of taxpayer Margin of comparables Purchase of raw materials, Components, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjustment suggested by the TPO towards payment of management fees on the ground that the assessee has not provided any rationale for adopting TNMM as most appropriate method. The DRP, further, held that each transaction has to be evaluated separately and the nature of expenditure incurred by the assessee, it is difficult to accept the arguments that when all transactions are tested by adopting TNMM as most appropriate method, segregation of few transactions and applying CUP method is incorrect. The DRP, further, held that the assessee has not furnished any evidence to prove that it had received service from its AE with regard to payment of management fees except for marketing services. Pursuant to the directions of the DRP, the AO has passed final Assessment Order on 30.06.2017 u/s.143(3) r.w.s.144C(13) of the Act and made additions of ₹ 1,51,79,164/- towards downward adjustment on account of management fees paid to CTL-UK. Aggrieved by the final Assessment Order, the assessee has filed this appeal before us. 6. The Ld.AR for the assessee submitted that the issue is squarely covered in favour of the assessee by the decision of ITAT in assessee s own case for the AY 2012- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties, perused the material available on record and gone through orders of the authorities below. The TPO has suggested downward adjustment of management fees paid to CTL-UK basically on two grounds. The first reason given by the TPO to make TP adjustment is that the assessee has not filed any evidences to prove receipt of services from its AE. The TPO, further, was of the opinion that the services claimed to have received by the assessee from its AE are in the nature of shareholders/stewardship services, which did not give any cost benefit to the assessee. The another reason given by the TPO to suggest TP adjustment is that the method selected by the assessee to compare payment of management fees is not a proper method. Because, if CUP is selected, then it is easy to compare the transactions in a similar scenario, an independent entity would not be willing to pay such amount for services so claimed to have been received by the assessee. We have given our thoughtful consideration to the reasons given by the TPO to make downward adjustment for management fees paid to AE and find that in so far as selection of most appropriate method, although the TPO is correct in selecting CUP meth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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