Technical Know-How Fees Upheld: Transfer Pricing Adjustments Rejected Based on Essential Services and Profit Margin Evidence

ITAT rejected transfer pricing adjustments for technical know-how fees paid to associated enterprise. The tribunal found the technical services were inextricably linked to the assessee's business operations and essential for efficient business performance. The assessee demonstrated a higher net profit margin of 10.92% compared to comparable companies' 4.11%, which negated the need for additional markup. The tribunal directed the AO to grant TDS credit after document verification and compute interest under sections 234A and 234B considering CBDT's extended time limits. The decision follows the tribunal's previous ruling in the assessee's case for the 2018-19 assessment year, ultimately upholding the assessee's position on technical know-how expenses. .....

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