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TMI Blog2022 (8) TMI 1345X X X X Extracts X X X X X X X X Extracts X X X X ..... spute Resolution Panel (DRP) and the order of the transfer pricing officer in so far as it is against the appellant is against the law, facts, circumstances, natural justice, equity, without jurisdiction, bad in law and all other known principles of law. 2. That the total income computed and the total tax computed is hereby disputed. 3. That the Order of the authorities below violates the principles of judicial discipline as the binding nature of the orders of the higher appellate authorities have been totally ignored. 4. The authorities below erred in not considering the details, evidences and information furnished by the assessee before passing the orders. 5. The authorities below erred in making adjustment towards the royalty for use of technology amounting Rs.1,74,04,730/- without determining the comparable transaction in the public domain as prescribed under the Act and Rules. 6. The authorities below have erroneously and contrary to Rule 10B(3) have relied on Advanced Micronic Devices Ltd (AMDL) as a comparable even after noticing that there was no payment of Royalty by the said AMDL. 7. The authorities below have deliberately overlooked the binding directio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein the equipment is under constant monitoring through the network of satellites. The advantage of such a system is that it allows remote monitoring besides remote maintenance. The assessee is a beneficiary of such facility. It would have cost hundreds of millions of dollars to have an own exclusive facility besides the assessee also does not have such technology to put up the facility. It would not have made any economic sense to facilitate such facility independently. Thus, the payment of royalty enhances the commercial value for the business of the assessee. 3.3 The Tribunal for AY 2005-06 and 2006-07 in IT(TP)A 40/B/11 & 1647/B/13 dt.21.04.2017 has set aside the issue of royalty to the file of the TPO/AO for reconsideration in the light of the directions of the Tribunal for the AY's 2002-03 to 2004-05. The Tribunal has dealt with the issue in para 16 to 18 of the order. Relevant portion is extracted as under: ''18. Since the issue was already set aside to the file of the Assessing Officer for choosing the proper comparable therefore in view of the earlier year of this Tribunal, we set aside this issue to the record of the TPO/AO for reconsideration of the same in the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as part of the trading segment. The margin of the assessee in the trading segment works out to 39.49% after considering royalty as operating cost as against the margin of the comparable M/s Advanced Micronic Devices Ltd being 28.06%. Since the margin of the assessee is higher than that of the comparable, the transaction is at arm's length and consequently the addition requires to be deleted. 3.6. The Ld. D.R. submitted that there is no proof of any services having actually been rendered by the A.E. The facts of issue shows that the services, even if any, rendered by the A.E. were mere duplication of the functions being carried out by the tax payer on its own and independently. The assessee did not get any economic value from the alleged trade mark/trade name fee paid. The ALP of the so-called trade mark/trade name for charges so paid by the assessee was determined as nil and he prayed that the same to be confirmed. 3.7 We have heard the rival submissions and perused the materials available on record. In earlier occasion, assessee came in appeal before this Tribunal. The Tribunal remitted the issue with the directions in IT(TP)(A) No.40/Bang/2011 & 1647/Bang/203 dated 21.4.2017 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness and disallowed the same u/s 37 of the Act. 4.2 The assessee disagrees with the findings of the AO as he has erred in wrongly interpreting the facts, submissions, method of accounting and the practice consistently followed by the assessee. The sales are booked by various dealers appointed by the assessee and commission is paid on the sales made by them, however, the actual payment is made upon realization of the sales proceeds and on fulfilling other concomitant services / obligations. At the time of booking sales, the quantification of commission to each dealer is uncertain in nature, hence the amount of dealer commission expense is not booked against particular dealer account, but carried in the books under "Other Liabilities" account. Once the dealer fulfils the conditions related to the sales, he becomes eligible to claim the commission. Then, the commission will be moved from "Other liabilities" account to respective dealer account, and paid immediately after deducting TDS on the same. This practice is followed consistently and TDS is deducted where ever applicable. Hence it is prayed that the dealer commission incurred be allowed in the interests of justice as the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (DRP) and the order of the transfer pricing officer in so far as it is against the appellant is against the law, facts, circumstances, natural justice, equity, without jurisdiction, bad in law and all other known principles of law. 2. That the total income computed and the total tax computed is hereby disputed. 3. That the Order of the authorities below violates the principles of judicial discipline as the binding nature of the orders of the higher appellate authorities have been totally ignored. 4. The authorities below erred in making adjustment towards the royalty for use of technology amounting Rs.2,76,52,064/- without determining the comparable transaction in the public domain as prescribed under the Act and Rules. 5. The authorities below have erroneously and contrary to Rule 10B(3) have relied on Advanced Micronic Devices Ltd (AMDL) as a comparable even after noticing that there was no payment of Royalty by the said AMDL. 6. The authorities below have deliberately overlooked the binding direction of the ITAT for the impugned year that the Royalty expense should be considered as part of the Distribution/Trading segment. 7. The authorities below erred in ado ..... X X X X Extracts X X X X X X X X Extracts X X X X
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