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| The Tax Publishers2021 TaxPub(DT) 0043 (Del-Trib) INCOME TAX ACT, 1961
Section 92C
Losses arising to assessee in the earlier year's have consistently reduced and increase in profitability during the year itself established case of assessee that availment of support services from AE had benefited business of assessee and hence, assessee was entitled to claim expenditure and, accordingly, TPO was not justified in determining nil ALP.
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Transfer pricing - Determination of ALP - Management support service fee paid to AE - TPO determined nil ALP applying benefit test
Assessee claimed deduction of management service fee paid to its AE abroad. TPO determined ALP thereof at nil holding that group companies were being paid in the name of management fee, though there were sufficient management personnel available. Held: In the first instance, it was for assessee businessman to decide its course of carrying on the business and in such course, for availing of management services from its AE. AO could not sit in judgment, with such decision of businessman. Losses arising to assessee in the earlier years have consistently reduced and increase in profitability during the year itself established case of assessee that availment of support services from AE had benefited business of assessee and hence, assessee was entitled to claim expenditure.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 37(1)
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