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| The Tax Publishers2021 TaxPub(DT) 3033 (Hyd-Trib) INCOME TAX ACT, 1961
Section 92C
Determination of ALP of management service fee paid to AE abroad at nil rate on the ground that no benefits was derived out of management services was not justified as it was not within the domain of TPO to determine actual benefits derived from International transactions in issue which was to be seen from assessee's view point going by common business prudence only and assessee had already filed evidence indicating receipt of management services in day-to-day functioning from its overseas AE.
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Transfer pricing - Determination of ALP - Payment of management service fee to AE - TPO determined Nil ALP alleging no benefit derived by assessee
Assessee claimed deduction of management service fee paid to AE abroad. TPO determined ALP thereof at nil on the ground that no benefits was derived out of management services. Held: It was not within the domain of TPO to determine actual benefits derived from International transactions in issue which was to be seen from assessee's view point going by common business prudence only. Assessee had already filed evidence indicating receipt of management services in day-to-day functioning from its overseas AE. There was no rebuttal coming from revenue's side that said details lacked genuineness which could be taken as the benchmark for arriving at nil 'ALP' thereof. Accordingly, impugned ALP adjustment was not sustainable.
Followed:CIT v. Cushman and Wakefiled (India) Pvt. Ltd. (2014) 367 ITR 730 (Del-HC) : 2014 TaxPub(DT) 2623 (Del-HC) and CIT v. EKL Appliances Ltd. (2012) 345 ITR 241 (Del-HC) : 2012 TaxPub(DT) 2071 (Del-HC).
REFERRED :
FAVOUR : In assesse's favour.
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 92C
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