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TMI Blog2022 (1) TMI 1306X X X X Extracts X X X X X X X X Extracts X X X X ..... management to be in the nature of stewardship services and alleged that the assessee did not submit any evidence of the receipt of services disregarding the fact that these services were emanating from the same agreement. The rendering of services was duly evidenced by the agreement as well as debit notes issued against the assessee. The copies of email / correspondences to support the receipt of services were duly furnished (43 to 88 of paperbook). Another observation of TPO is that the assessee may not be requiring these services in the normal course of business. The same, in our opinion, is not correct approach since the role of Ld. TPO was limited to determine the ALP of the transactions and not to adjudge the same at the threshold of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed. Therefore, the value of impugned transactions, in our considered opinion, could not be taken to be nil in this year. We would hold that the TP adjustment as made by Ld. AO in the final assessment order could not be upheld in the eyes of law. By deleting the same, we allow the appeal. X X X X Extracts X X X X X X X X Extracts X X X X ..... ice (ALP). These transactions are detailed in para-4 of Ld. TPO's order. The assessee, in its Transfer Pricing (TP) study report, aggregated all these transactions and benchmarked the same using entity level Transactional Net Margin Method (TNMM). Since assessee's margin was stated to be higher than the mean margin of comparable entities, no TP adjustment was proposed by the assessee. 4.2 One of the transactions carried out by the assessee was payment of Rs.392.53 Lacs paid by the assessee to one of its AE i.e. M/s AVO Carbon Holdings, LLC to procure management services. These services include payment of Rs.89.12 Lacs towards finance and general management / administration services. The services were availed by the assessee under an agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. DRP, however, the same could not convince Ld. DRP. The Ld. DRP, vide para-2.6 of the direction, held that the nature of services was part of shareholder's activity which do not justify any charges to be paid to the recipient. Accordingly, ALP was rightly determined as Nil. Pursuant to these directions, final assessment order was passed by Ld. AO incorporating this adjustment. Aggrieved, the assessee is in further appeal before us. 6. Going by the factual matrix as enumerated in preceding paragraphs, it could be seen that the assessee has availed bundle of services from its AE and made payment pursuant to the terms of the agreement. These payments are recurring in nature and are determined by applying specific allocation keys. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Tribunal in Flakt (India) Ltd. V/s DCIT (ITA No.1032/Mds/2014) wherein it was held that in the absence of any comparison of the transaction with transaction carried out in uncontrolled market, Ld. TPO could not independently come to conclusion that volume and quality of services was disproportionate to the payment made by the assessee. The estimation of the services rendered and costs of such service was outside the scope of transfer pricing adjustment. The Ld. CIT-DR has referred to the decision of Delhi Tribunal in Bombardier Transportation India Pvt. Ltd. V/s DCIT (ITA No.1626/Del/2015 dated 04-11-2015) which is factually distinguishable since in that case the assessee could not file sufficient documentary evidences and the adju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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