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TMI Blog2024 (3) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... are not audited cannot make them untrustworthy without pointing out any specific defect/error/fallacy in them. Observations of the ld. CIT(A) that non compete fee and good will has not been allocated is not accepted as the TPO himself has not allocated these expenses. Assessee has not only provided segmental account but has also allocated expenses and has given basis of allocation. We do not find any merit in the stand taken by the TPO/AO as confirmed by the ld. CIT(A). We, accordingly, direct the AO to delete the impugned adjustment. Appeal of assessee allowed. - SHRI SAKTIJIT DEY, VICE PRESIDENT, AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER For the Appellant : Shri Tarandeep Singh, Adv and Shri Sandeep Yadav, Adv For the Respondent : Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... national transactions based on entity level financials of the appellant. 5. That having regard to facts circumstances of the case, Ld. CIT(A) has erred in law and on facts in passing the impugned order contrary to law and facts and without providing adequate opportunity of hearing and without considering the principles of natural justice. 6. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 3. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. Judicial decisions relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase against confirmed order (3) Payment for automation charges to PANalytical BV Netherlands (4) Payment for training charges to Spectris - UK 6. Bench marking analysis of the assessee can be understood from the following : For international transactions relating to Provision of Marketing and Administrative Support Services', 'Provision of Agency services'. 'Purchase against confirmed order', 'Payment for Automation charges' and ' Payment for training charges , assessee has used TNMM and PLI of OP/OC. The results of the tested party were calculated at 35.06% as against results of comparables using three years data at 22.48%. For the international transaction relating to 'Purchase for normal sales', ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and risks assumed, FAR analysis of the assessee, it is clear that the provision of AMC Services are inextricably linked to other functions with respect to purchase of equipment and provision of other support services to the AE. The assessee, being a 95% subsidiary of its parent is importing spare parts and equipments relating to precession instrumentation and controls and is engaged in reselling and providing after sales services, sales of spare parts and AMC services with respect to above equipments imported from its AE. The assessee is also engaged in provision of ancillary support services such as administrative and agency services and marketing support to its AE. It is also important to mention that all technical input with respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nagement and the assessee enters into a contract with the customers for providing AMC services and accordingly, it is responsible for delivery of services to the customer. 11. Regarding sale of spare parts and equipments, the assessee is responsible for making sale of spare parts and equipment imported by it from its AE. Sale of spare parts under AMC business can be broadly categorized into three types: (i) Over the counter sale wherein the customer has not taken any AMC and he purchases only spare parts or equipment from the assessee. (ii) Sale to AMC customer wherein the customer has taken AMC from the assessee. (iii) Replacement under AMC wherein the customer has taken AMC from the assessee and spare part required to be replaced is cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, it has divided its revenue and expenditure broadly into two segments based on functional, asset and risk analysis and providing AMC services including sale of goods. The assessee has also given basis of allocation/apportionment of revenue and expenses which is as under: 16. From the above charts, it can be seen that the assessee has allocated common expenses and has also given basis of apportionment. We find that the ld. CIT(A) has put a doubt on whether segmental accounts are to be accepted and the only reason given by the authorities, as we understand from the respective orders, is that it is not audited. 17. Merely because segmental accounts are not audited cannot make them untrustworthy without pointing out any specific defect/error/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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