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TMI Blog2020 (9) TMI 1289X X X X Extracts X X X X X X X X Extracts X X X X ..... nd technical fee through Central Bank of India - HELD THAT:- We find that the DRP has deleted the addition by placing reliance on the order of the Tribunal in assessee s own case for assessment year 2008-09 [ 2013 (11) TMI 930 - ITAT MUMBAI] when a payment is made after obtaining due approval from the RBI, how its ALP can be computed at Rs. Nil, is anybody's guess. The fact of approval of the payment by the RBI has been succinctly recorded by the TPO in his order as well. He still chose to propose adjustment in respect of full payment. In our considered opinion, when the rate of royalty payment and fee for drawings etc. has been approved or deemed to have been approved by the RBI, then such payment has to be considered at ALP. We, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. On the facts and in the circumstances of the case and in law the learned Additional Commissioner of Income Tax (Transfer Pricing-11(6) ( TPO ) and learned Deputy Commissioner of Income Tax-3(3) ( AO ) under directions issued by the Hon ble Dispute Resolution Panel ( DRP ) erred in considering IL FS Transportation Network Ltd as comparable company for determining arm s length price of international transactions of the Respondent. 2. On the facts circumstances of the case, and in law, the learned TPO and the learned AO under the directions of the Hon ble DRP erred in rejecting the Internal Transactional Net Margin Method ( TNMM ) analysis carried out by the Respondent. 4. Shri Madhur Agrawal, appearing on behalf of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited from the list of comparables, being a Government company. For the sake of completeness the relevant extract of the observations of the Tribunal are reproduced herein below:- 12.8.2 We find it as undisputed that Engineers India Limited is a Government company. It has several segments which also include Turnkey project'. Page 700 of the paper book is a copy of annual report of Engineers India Limited on turnkey project. It can be seen that the revenue has arisen from completing Para xylene Plant of IOCL and further that company is engaged in execution of other unit of IOCL's Panipat Naphtha Cracker Project. In our considered opinion, this case should not have been included in the list of final comparables for two reasons. Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts concerning this issue as recorded in the order of the TPO are that the assessee obtained know-how and project-engineering drawings from its Associated Enterprise vide collaboration agreement dated 23.07.1996. As per this agreement, the assessee availed technical and engineering support for cement plant equipment and machinery. For availing the said manufacturing drawings and project engineering services, the assessee paid 2% of contract value to its AE and for know-how. It also paid royalty at 5% of the selling price to its AE. Royalty agreement between the assessee and Krupp Polysius AG was approved by Reserve Bank of India and FIPB. The assessee selected itself as the tested party and TNMM as the most appropriate method for benchm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh this letter, the Central Bank of India forwarded relevant documents along with a copy of the agreement. The RBI vide its letter dated 21.04.2008 requested Central Bank of India to consider the assessee's case in accordance with its AP (DIR Series) No.76 dated 24.02.2007. It is in pursuance to the deemed approval by RBI under the automatic approval scheme that the assessee made payment of royalty and technical fee to its AE. It is relevant to note that such payment has been approved or deemed to have been approved by the RBI. When a payment is made after obtaining due approval from the RBI, how its ALP can be computed at Rs. Nil, is anybody's guess. The fact of approval of the payment by the RBI has been succinctly recorded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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