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TMI Blog2024 (3) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant and it could not have been carried out business in India without the help of these services . - The Hon'ble Supreme Court has also dismissed the Special Leave Petition (Civil) filed by the Revenue [ 2023 (8) TMI 1439 - SC ORDER] for assessment year 2009-10. In view of the factual contents and the decision of the Hon'ble Supreme Court in the SLP filed by the Revenue (supra), the appeal of the assessee is hereby allowed. - Sh. Saktijit Dey, Vice President And Dr. B. R. R. Kumar, Accountant Member For the Assessee : Sh. Ankit Sahani, Adv. And Sh. Vishal Kalra, Adv. For the Revenue : Sh. Rajesh Kumar, CIT-DR ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: The present appeal has been filed by assessee against the order dated 28.02.2022 passed by the AO u/s 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961. 2. Following grounds have been raised by the assessee: 1. That on facts and circumstances of the case and in law, the AO erred in assessing the income of the Appellant under the normal provisions of the Act at INR 41,30,30,744, in pursuance to the directions of the Dispute Resolution Panel ( DRP ), as against the returned income of INR 16,10,50,670. 2. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions on account of Intra Group Services because the assessee has failed to furnish necessary evidence to substantiate services rendered and also failed to show that such services are not in the nature of share holder services/duplicative services. As the assessee failed to discharge the burden of providing these services accordingly the Arms Length Price of service was taken as nil and adjustments was made. The Hon ble DRP also confirmed TPO's order. The assessee preferred in appeal before the Hon ble ITAT and the Hon'ble ITAT vide its order in ITA No. 7183/Del/2017 dated 15.06.2018 has set aside the appeal of the assessee to the file of AO/TPO. The relevant directions of the Hon ble ITAT, being pertinent are given below:- 4.13 The facts and circumstances and the intragroup services involved in the year under consideration are identical to the facts and circumstances and the intragroup services availed in assessment year 2012-13, thus respectfully following the finding 18 ITA No.7183/Del/2017 of the Tribunal (supra), we restore the matter of determining arm's-length price of the intra-group services to the file of the Ld. AO/TPO for deciding in view of the direction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AE with regard to such services. Based on the above, the AO concluded that the assessee has failed to discharge the initial onus cast upon it and at max, even if the services are received they are mainly incidental or duplicative in nature. The assessee has mainly argued that this issue of Intra Group Services is clearly covered by the earlier orders of Hon'ble Delhi High Court and the Tribunal in the case of the assessee only. The assessee s case is of receipt of Intra Group Services from its AEs and the AO has disallowed the amount paid for IGS because assessee has failed to establish such rendering/ receipt of services by the assessee company. Reference is made to the decision of the Hon'ble Delhi High Court in the case of assessee for A.Y. 2013-14 only, wherein the Hon'ble High Court has clearly held, (wherein a similar ground was raised by assessee) after considering assessee's submission, has dismissed the assessee contention and clearly stated that the observation of the Tribunal for the previous year can be at best be the guide but it cannot be taken as precedent specially for Intra Group Services which are mainly dependent on rendering services for each y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is with regard to determination of ALP of certain intra-group services claimed to have been received by the assessee from its AE. It is the contention of the assessee that certain administrative services have been received from the AE for which payment has been made to the AE. However, on careful perusal of the order passed by the TPO and learned first appellate authority, it is evident, there is a concurrent finding of both the authorities that the assessee failed to furnish even an iota of evidence to demonstrate that administrative services were actually rendered by the AE and the assessee has received such services. On a specific query made by the Bench to demonstrate the receipt of services from AE through cogent evidence, including, any communication with the AE, learned counsel for the assessee expressed his inability to furnish any evidence and repeated his submission to restore the matter back to the Assessing Officer for enabling the assessee to furnish evidence, if any. We are unable to accept the aforesaid submission of learned counsel for the assessee. When the assessee has failed to furnish any evidence either before the departmental authorities or before us to demons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it does not preclude the AO from making the enquiries on these issues. 11. Now, in the present case, assessee-company had not discharged the onus of proving the receipt of services before lower authorities. Despite opportunities given to the assessee-company, no attempt was made by the assessee company to lead necessary evidence in support of receipt of actual services from the AE. The submission of the assessee company that an opportunity may be granted to the assessee company to discharge onus, cannot be accepted because it is settled principle of law that the assessee-company cannot be accepted, because it is settled principle of law that the assessee-company cannot be given a second innings to make good its case. Thus from the above, it is clearly proved that the various Courts/Tribunals including jurisdiction High Court of Delhi /Delhi Tribunal have held that each year is distinct and different and it is to be governed by facts and circumstances of each year. Thus the assessee contention that the issue of services is covered by earlier years decision is not of any consequence because in the case of Intra Group Services, assessee has to establish receipt of services with convin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the nature of share holder services. This is for the simple reason that unless the services are rendered which are neither duplicate and are not share holder Activity then only any independent person would be willing to pay for those services. This is a necessary ingredient for determination of ALP of intra group services. As the earlier orders passed by the coordinate bench for Assessment Year 2007-08 to AY 2011-12 also concerning the same agreement which is also before Id TPO for determination of ALP of intra group services, we respectfully following the order of the coordinate bench hold that need test and benefit test are already satisfied for determination of ALP of those intra group services and therefore for this year also we hold that such test questioned by the Id TPO is incorrect as the seiwices concerned are pertaining to the same agreement which has been examined by the coordinate benches in case of assessee for earlier years. However, the rendering of such services is subject to determination for each Assessment Year independently based on the evidences for rendering of the services. Therefore the assessee is required to demonstrate with credible evidence to satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sample screenshots of TRIM Orders 10. GVP Service and strategic support Email : Upcoming APAC Q3 2012 Attestation Policy Exception Intercompany database Email: RBIS Controllership Training series HEM Training Presentation Product Training HTT Product Training 11. VIPFS Services List of RBO's 14. We have carefully analysed whether the evidences submitted by the assessee are sufficient to conclude that services have actually been rendered by the foreign AE or not. Coming to the Paper Book at Page 235-253 we found that it is a marketing broacher for labeling solutions. We failed to understand that how this marketing broacher can show that the marketing support services have been rendered by AE. Page Nos. 254 to 259 is with respect to some conference call and webinar. Further the mails at Page No. 262 to 262 are with respect to 'Beer in India' which is just the information asked with respect to some connectivity as well as communication from Executive Vice President. Page No. 263 to 280 is a product finder and similarly some of the mails are very general and pertaining to team meetings and teleconference between the two parties. Similarly we have also perused such evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , after perusal of the Hon'ble ITAT s order, it is respectfully submitted that the evidences with regard to intra group services have not been examined and it is essential that the same should be examined at length and only after that decision should be arrived at by the Hon'ble Tribunal. And this was precisely the reason why the undersigned sought time from the Hon'ble Bench to argue the matter in detail because the assessee contention of treating the issue of 1GS services covered from earlier years orders and more recently from the order passed by the ITAT on 05.06.2023 in ITA No. 7960 and 7961/ Del/2019 for A.Y. 2012-13 201516 is clearly not tenable because as stated above, the documents/evidences of IGS has not been completely examined. Without prejudice to above, the comments of the department on the evidences submitted are given below:- (1) page no. 59 to 213 are the sample product brouchers which has been submitted as part of IGS the brouchers have been examined and it appears that these are related to the adhesive materials /labels etc. supplied by Avery Group to various customers across the globe and it has nothing to do with the services received by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue. From page no. 340 to 369 contains some bench mark position report with regard to various heads and again this is in the form of general MIS created for analysis purpose by all the MNCs. Page 373 to 377 are in relation to periodic analysis of the various issues relating to finance by some Mr. Margaret Chung/AP/Avery Denninson which appears to be mainly related to normal review by finance side and nothing more that. (7) page 378 to 399 are the copies of financial hand book /guidelines etc. prepared by the group company. Again these are just the standard manuals prepared by the head office for requiring a common approach by all AEs and at best this is more of asking for a report in common format by holding company and cannot be treated as IGS by any stretch of imagination. (8) page no. 400 to 402, these are again standard e-mails with regard to statutory audits/ printing of pots etc. and certainly does not show any rendering of services. (9) page no. 402 to 458 , the assessee claims these as emails correspondence in relation of support services. However, on perusal these appears to be normal corporate communication between employees of two AEs and certainly does not show any rend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in continuation to the earlier synopsis dated July 10, 2023 filed by the Appellant wherein it has been explained in detail regarding the business carried out by the Appellant under the two segments, i.e., Pressure Sensitive Materials ( PSM ) and Retail Branding and Information Services ( RBS ). It is submitted that in relation to the two segments which inter-alia involves manufacture and trading of pressure sensitive and retail branded materials, the Appellant was availing marketing and support services from its Associated Enterprises ( AEs ) vide agreement dated October 20, 2010. It is further submitted that various services received under the common agreement were benchmarked on an aggregate basis using Transactional Net Margin Method ( TNMM ) and out of host of services availed, the services relating to ticketing hub and VIPFS have been accepted by the Transfer Pricing Officer ( TPO ) and the Dispute Resolution Panel ( DRP ) in the past and in this year by the TPO itself. 2. It may also be pointed out, that this is the second round of litigation and in the first round, the Hon ble Bench of the Income Tax Appellate Tribunal ( Hon ble Tribunal ) vide order dated June 27, 2018 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Appellant by its AE and accepted by the Hon ble Tribunal / Hon ble High Court/ Hon ble Supreme Court, therefore, a different view in the present year is not called for, especially, when this year was remanded back basis the AY 2012-13 order which has also been decided in favour of the Appellant. 7. In the written submissions dated October 13, 2023, Ld. Departmental Representative ( Ld. DR ) has again tried to demonstrate that evidence is general in nature and therefore, the Nil ALP determination deserves to be accepted. The Ld. DR has also submitted that the Hon'ble Tribunal orders for AY 2012-13 and 2015-16 should not been followed as in that case, the Ld. DR was not able to rebut the evidence brought on record by the Appellant. 8. In this regard, it is submitted that Ld. DR has not appreciated the order of the Hon ble ITAT, Hon ble High Court and the Hon ble Apex Court in letter and spirit and has merely tried to distinguish the same without any basis. For the sake of repetitiveness, it may again be highlighted that the sum and substance of the order of the Appellate Authorities, i.e. ITAT, High Court and Supreme Court is that; (a) it is a composite contract under whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 2007-10 to 2012-13 and for assessment year 2014-15 to 2016-17 have been perused. The Hon'ble Supreme Court has also dismissed the Special Leave Petition (Civil) filed by the Revenue in Diary No (s) - 30100/2023 for assessment year 2009-10. In view of the factual contents and the decision of the Hon'ble Supreme Court in the SLP filed by the Revenue (supra), the appeal of the assessee is hereby allowed. 8. For the sake of ready reference the details of the orders of the ITAT and the Hon'ble High Court are mentioned below: 1. Order dated June 05, 2023 passed by the Hon'ble Tribunal in Appellant's own case for AY 2012-13 and 2015-16. 2. Order dated February 21, 2023 passed by the Hon'ble Delhi High Court ( HC ) in Appellant's own case for AY 2012-13 and 2015-16. 3. Order dated April 10, 2023 passed by the Hon'ble Tribunal in Appellant's own case for AY 2016-17. 4. Order dated September 20, 2022 passed by the Hon'ble HC in Appellant's own case for AY 2009-10. 5. Order dated October 11, 2021 passed by the Hon'ble Tribunal in Appellant's own case for AY 2009-10. 6. Order dated July 23, 2019 passed by the Hon'ble HC in A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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