M/S. PLINTRON MOBILITY SOLUTIONS PVT. LTD.,KANCHIPURAM vs. DCIT, CORPORATE CIRCLE-1 (LTU), RANGE-801, CHENNAI

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

The present appeal has been filed by the Assessee against the order

passed by the Deputy Commissioner of Income Tax, Corporate Circle–1

(LTU), Range 801, Chennai, under sections 143(3) read with 144C(13) and

144B of the Income Tax Act, 1961 (“the Act”), vide order dated 25.10.2024,

relating to the assessment year 2021–2022.

The Concise Grounds of Appeal filed by Assessee before us is 2. reproduced hereunder: 2.1 “ The AO / TPO / DRP erred in considering the payment of Business and Management consultancy fee as "Nil".

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd.

2.2 The AO / TPO / DRP erred in concluding the Business The AO / TPO / DRP erred in concluding the Business The AO / TPO / DRP erred in concluding the Business and Management consultancy services received from the AE as and Management consultancy services received from the AE as and Management consultancy services received from the AE as shareholder activities without taking cognizance of the fact that AE shareholder activities without taking cognizance of the fact that AE shareholder activities without taking cognizance of the fact that AE does not own any shareholding in Assessee company. does not own any shareholding in Assessee company. 2.3 The AO / TPO / DRP erred in not appreciating the The AO / TPO / DRP erred in not appreciating the The AO / TPO / DRP erred in not appreciating the benefit received by the As benefit received by the Assessee on account of business and sessee on account of business and management consultancy services availed from AE. management consultancy services availed from AE. 2.4 The AO / TPO / DRP erred in not appreciating the email The AO / TPO / DRP erred in not appreciating the email The AO / TPO / DRP erred in not appreciating the email evidences produced by the Assessee to substantiate that the evidences produced by the Assessee to substantiate that the evidences produced by the Assessee to substantiate that the Business and Management consultancy services were receiv Business and Management consultancy services were receiv Business and Management consultancy services were received. 2.5 The AO / TPO / DRP erred in not adopting the correct The AO / TPO / DRP erred in not adopting the correct The AO / TPO / DRP erred in not adopting the correct method as prescribed in Rule 10B of the income tax rules, 1962. method as prescribed in Rule 10B of the income tax rules, 1962. method as prescribed in Rule 10B of the income tax rules, 1962. 2.6 The AO / TPO / DRP erred in not appreciating the fact The AO / TPO / DRP erred in not appreciating the fact The AO / TPO / DRP erred in not appreciating the fact the Business and Management Consultancy services are the Business and Management Consultancy services are the Business and Management Consultancy services are inextricably linked to t inextricably linked to the core operations of Assessee and as such he core operations of Assessee and as such be aggregated and benchmarked using Transactional Net Margin be aggregated and benchmarked using Transactional Net Margin be aggregated and benchmarked using Transactional Net Margin Method ('TNMM') Method ('TNMM' Upward Upward Upward adjustment adjustment adjustment towards towards towards Interest Interest Interest income income income from from from outstanding receivables outstanding receivables 3.1 The AO / TPO / DRP erred in not providing any cogent The AO / TPO / DRP erred in not providing any cogent The AO / TPO / DRP erred in not providing any cogent reasons for adopting LIBOR plus 350 BPS for computing notional for adopting LIBOR plus 350 BPS for computing notional for adopting LIBOR plus 350 BPS for computing notional interest on outstanding receivables. interest on outstanding receivables. 3.2 The AO / DRP erred in in law and on facts by adding a The AO / DRP erred in in law and on facts by adding a The AO / DRP erred in in law and on facts by adding a spread of 100 basis points over and above the LIBOR plus 350 spread of 100 basis points over and above the LIBOR plus 350 spread of 100 basis points over and above the LIBOR plus 350 basis points which was adopted by the TPO.” basis points which was adopted by the TPO.”

summarize the factual background of the case. The Assessee is engaged summarize the factual background of the case. The Assessee is engaged summarize the factual background of the case. The Assessee is engaged

in the business of providing development and maintenance services for in the business of providing development and maintenance services for in the business of providing development and maintenance services for

telecom software solutions. telecom software solutions.

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd. 3.1 During the assess the assessment year 2021-22, the Assessee entered into 22, the Assessee entered into

international transactions with its Associated Enterprises (AEs) relating to international transactions with its Associated Enterprises (AEs) relating to international transactions with its Associated Enterprises (AEs) relating to

the development and maintenance of telecom software, as well as the the development and maintenance of telecom software, as well as the the development and maintenance of telecom software, as well as the

receipt of business and management consultancy services. The Learn receipt of business and management consultancy services. The Learn receipt of business and management consultancy services. The Learned

Authorized Representative (Ld. AR) submitted that the Assessee had Authorized Representative (Ld. AR) submitted that the Assessee had Authorized Representative (Ld. AR) submitted that the Assessee had

adopted the Transactional Net Margin Method (TNMM) as the most adopted the Transactional Net Margin Method (TNMM) as the most adopted the Transactional Net Margin Method (TNMM) as the most

appropriate method for benchmarking these international transactions and appropriate method for benchmarking these international transactions and appropriate method for benchmarking these international transactions and

had reported a margin of 18.56%, as compared to th had reported a margin of 18.56%, as compared to the margins of nine e margins of nine

comparable companies ranging from 11.68% to 16.78%, with a median of comparable companies ranging from 11.68% to 16.78%, with a median of comparable companies ranging from 11.68% to 16.78%, with a median of

13.50%. During the proceedings before the lower authorities, the Transfer During the proceedings before the lower authorities, the Transfer During the proceedings before the lower authorities, the Transfer

Pricing Officer (TPO), vide order dated 06.10.2023, conducted a fresh Pricing Officer (TPO), vide order dated 06.10.2023, conducted a fresh Pricing Officer (TPO), vide order dated 06.10.2023, conducted a fresh

search and introduced twe search and introduced twelve new comparable companies. Consequently, lve new comparable companies. Consequently,

the TPO recomputed the Assessee’s margin at 12.04% in comparison with the TPO recomputed the Assessee’s margin at 12.04% in comparison with the TPO recomputed the Assessee’s margin at 12.04% in comparison with

sixteen comparable companies whose margins ranged from 17.08% to sixteen comparable companies whose margins ranged from 17.08% to sixteen comparable companies whose margins ranged from 17.08% to

27.31%, with a median of 22.175%, and proposed an upward adjustment of 27.31%, with a median of 22.175%, and proposed an upward adjustment of 27.31%, with a median of 22.175%, and proposed an upward adjustment of

Rs.4,20,19,530/-. Apart from the impugned primary adjustment, the Ld. Apart from the impugned primary adjustment, the Ld. Apart from the impugned primary adjustment, the Ld.

TPO also disallowed the business and management consultancy fee TPO also disallowed the business and management consultancy fee TPO also disallowed the business and management consultancy fee

amounting to Rs.17,16,26,011/ 17,16,26,011/-, holding that the same could not be , holding that the same could not be

aggregated and benchmarked under TNMM, but was required to be aggregated and benchmarked under TNMM, but was required to be aggregated and benchmarked under TNMM, but was required to be

excluded and examined on a standalone basis under the “Other Method.” excluded and examined on a standalone basis under the “Other Method.” excluded and examined on a standalone basis under the “Other Method.”

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd. Additionally, the TPO made an upward adjustment of Additionally, the TPO made an upward adjustment of Additionally, the TPO made an upward adjustment of Rs.48,736/- on

account of interest on outstanding receivables. account of interest on outstanding receivables.

3.2 A draft assessment order dated 24.12.2023 was passed by the A draft assessment order dated 24.12.2023 was passed by the A draft assessment order dated 24.12.2023 was passed by the

Assessing Officer incorporating the transfer pricing adjustments. The Assessing Officer incorporating the transfer pricing adjustments. The Assessing Officer incorporating the transfer pricing adjustments. The

Assessee filed objections before the Dispute Resolution Panel (DRP), Assessee filed objections before the Dispute Resolution Panel (DRP), Assessee filed objections before the Dispute Resolution Panel (DRP),

which, vide its directions dated 26.09.2024, upheld the action of the which, vide its directions dated 26.09.2024, upheld the action of the which, vide its directions dated 26.09.2024, upheld the action of the

Transfer Pricing Officer (TPO) with respect to Transfer Pricing Officer (TPO) with respect to the disallowance of business the disallowance of business

and management consultancy fees and also directed the re and management consultancy fees and also directed the re and management consultancy fees and also directed the re-computation of

the filters applied, with consequential inclusion or exclusion of the the filters applied, with consequential inclusion or exclusion of the the filters applied, with consequential inclusion or exclusion of the

comparable companies sought to be considered. comparable companies sought to be considered.

3.3. Further, the DRP directed the TPO Further, the DRP directed the TPO to apply an additional 100 basis to apply an additional 100 basis

points over and above LIBOR plus 350 basis points, which had earlier been points over and above LIBOR plus 350 basis points, which had earlier been points over and above LIBOR plus 350 basis points, which had earlier been

adopted by the TPO, for the purpose of computing interest on outstanding adopted by the TPO, for the purpose of computing interest on outstanding adopted by the TPO, for the purpose of computing interest on outstanding

receivables. Pursuant to the DRP’s directions, the TPO recomputed the receivables. Pursuant to the DRP’s directions, the TPO recomputed the receivables. Pursuant to the DRP’s directions, the TPO recomputed the

filters and included the comparables proposed by the Assessee, resulting s and included the comparables proposed by the Assessee, resulting s and included the comparables proposed by the Assessee, resulting

in the Assessee’s margin of 12.04% falling within the arm’s length range of in the Assessee’s margin of 12.04% falling within the arm’s length range of in the Assessee’s margin of 12.04% falling within the arm’s length range of

margins earned by comparable companies, which ranged from 5.92% to margins earned by comparable companies, which ranged from 5.92% to margins earned by comparable companies, which ranged from 5.92% to

28.56%, with a median of 19.36%. Consequently, 28.56%, with a median of 19.36%. Consequently, the entire adjustment the entire adjustment

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd. proposed in the original transfer pricing order in respect of the overall entity proposed in the original transfer pricing order in respect of the overall entity proposed in the original transfer pricing order in respect of the overall entity

stood deleted.

3.4 However, the adjustment on account of interest on outstanding However, the adjustment on account of interest on outstanding However, the adjustment on account of interest on outstanding

receivables was enhanced to receivables was enhanced to Rs.56,554/-. Thereafter, the final assessme . Thereafter, the final assessment

order dated 25.10.2023 was passed by the Assessing Officer confirming order dated 25.10.2023 was passed by the Assessing Officer confirming order dated 25.10.2023 was passed by the Assessing Officer confirming

the adjustment of Rs. Rs.17,16,82,565/-. Aggrieved by the said final . Aggrieved by the said final

assessment order, the Assessee has preferred the present appeal before assessment order, the Assessee has preferred the present appeal before assessment order, the Assessee has preferred the present appeal before

us.

to 2.6 pertains to the disallowance of business and management to 2.6 pertains to the disallowance of business and management to 2.6 pertains to the disallowance of business and management

consultancy charges. The Learned Authorized Representative (Ld. AR) consultancy charges. The Learned Authorized Representative (Ld. AR) consultancy charges. The Learned Authorized Representative (Ld. AR)

submitted that the Transfer Pricing Officer (TPO) disallowed the said submitted that the Transfer Pricing Officer (TPO) disallowed the said submitted that the Transfer Pricing Officer (TPO) disallowed the said

charges on the ground tha charges on the ground that the services received were in the nature of t the services received were in the nature of

stewardship activities. The Ld. TPO further observed that email stewardship activities. The Ld. TPO further observed that email stewardship activities. The Ld. TPO further observed that email

correspondences could not be regarded as sufficient evidence of receipt of correspondences could not be regarded as sufficient evidence of receipt of correspondences could not be regarded as sufficient evidence of receipt of

services and that the Assessee had failed to furnish adequate services and that the Assessee had failed to furnish adequate services and that the Assessee had failed to furnish adequate

documentation to substantiate the receipt of such services. Consequently, tion to substantiate the receipt of such services. Consequently, tion to substantiate the receipt of such services. Consequently,

the TPO segregated this transaction and benchmarked it separately under the TPO segregated this transaction and benchmarked it separately under the TPO segregated this transaction and benchmarked it separately under

the “Other Method.”

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd. The Dispute Resolution Panel (DRP) upheld the action of the TPO in The Dispute Resolution Panel (DRP) upheld the action of the TPO in The Dispute Resolution Panel (DRP) upheld the action of the TPO in

treating the business and manage treating the business and management consultancy services received by ment consultancy services received by

the Assessee as stewardship activities and in carrying out a separate the Assessee as stewardship activities and in carrying out a separate the Assessee as stewardship activities and in carrying out a separate

benchmarking of the transaction under the Other Method. benchmarking of the transaction under the Other Method.

4.1 The Learned Authorized Representative (Ld. AR) contended that the The Learned Authorized Representative (Ld. AR) contended that the The Learned Authorized Representative (Ld. AR) contended that the

business and management consultancy charges ought not to be management consultancy charges ought not to be management consultancy charges ought not to be

benchmarked separately, as they had already been benchmarked under benchmarked separately, as they had already been benchmarked under benchmarked separately, as they had already been benchmarked under

the TNMM. It was submitted that the business and management the TNMM. It was submitted that the business and management the TNMM. It was submitted that the business and management

consultancy services received by the Assessee were primarily in the nature consultancy services received by the Assessee were primarily in the nature consultancy services received by the Assessee were primarily in the nature

of operational assistance and strategic support, which provided substantial ational assistance and strategic support, which provided substantial ational assistance and strategic support, which provided substantial

benefit to the Assessee. In support of this contention, the Ld. AR placed on benefit to the Assessee. In support of this contention, the Ld. AR placed on benefit to the Assessee. In support of this contention, the Ld. AR placed on

record a detailed note outlining the various services received by the record a detailed note outlining the various services received by the record a detailed note outlining the various services received by the

Assessee, which is reproduced below: Assessee, which is reproduced below:

• International Business Development: International Business Development: This service supports the This service supports the Assessee in expanding its international operations by conducting Assessee in expanding its international operations by conducting Assessee in expanding its international operations by conducting detailed market research, assessing market potential, formulating detailed market research, assessing market potential, formulating detailed market research, assessing market potential, formulating market entry strategies, identifying strategic partners for bus market entry strategies, identifying strategic partners for bus market entry strategies, identifying strategic partners for business in specific jurisdictions, and preparing business plans for feasible specific jurisdictions, and preparing business plans for feasible specific jurisdictions, and preparing business plans for feasible markets. • Global Marketing: Global Marketing: This involves promoting the Assessee’s brand This involves promoting the Assessee’s brand through global marketing initiatives, including digital marketing, through global marketing initiatives, including digital marketing, through global marketing initiatives, including digital marketing, campaigns, trade shows, and event sponsors campaigns, trade shows, and event sponsorships. These activities hips. These activities help generate leads, devise marketing strategies, analyze competitors, help generate leads, devise marketing strategies, analyze competitors, help generate leads, devise marketing strategies, analyze competitors, form new alliances, and integrate new technology products. form new alliances, and integrate new technology products. form new alliances, and integrate new technology products. • Global Legal and Compliance: Global Legal and Compliance: This service ensures that the Assessee This service ensures that the Assessee complies with regulatory requiremen complies with regulatory requirements across all operational ts across all operational jurisdictions. It includes reviewing and approving contracts with third jurisdictions. It includes reviewing and approving contracts with third jurisdictions. It includes reviewing and approving contracts with third

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd. parties (such as suppliers, customers, and affiliates), providing advice parties (such as suppliers, customers, and affiliates), providing advice parties (such as suppliers, customers, and affiliates), providing advice on legal terms, and offering legal support in dealings with customers or on legal terms, and offering legal support in dealings with customers or on legal terms, and offering legal support in dealings with customers or regulatory authorities. uthorities. • Technology-Related Strategic Services: Related Strategic Services: This involves providing This involves providing strategic guidance on acquiring, allocating, and managing technology strategic guidance on acquiring, allocating, and managing technology strategic guidance on acquiring, allocating, and managing technology resources to meet business objectives and customer needs. It resources to meet business objectives and customer needs. It resources to meet business objectives and customer needs. It includes identifying and addressing the Assessee’s includes identifying and addressing the Assessee’s includes identifying and addressing the Assessee’s technology requirements, benchmarking against industry best practices, and requirements, benchmarking against industry best practices, and requirements, benchmarking against industry best practices, and supporting the conversion of leads into business opportunities. supporting the conversion of leads into business opportunities. supporting the conversion of leads into business opportunities. 4.2 The Learned Authorized Representative (Ld. AR) for the Assessee The Learned Authorized Representative (Ld. AR) for the Assessee The Learned Authorized Representative (Ld. AR) for the Assessee

reiterated that the business and management consu reiterated that the business and management consu reiterated that the business and management consultancy services

received are high-value, core management services that significantly value, core management services that significantly value, core management services that significantly

contribute to the Assessee’s business growth, revenue, and profitability. contribute to the Assessee’s business growth, revenue, and profitability. contribute to the Assessee’s business growth, revenue, and profitability.

The Associated Enterprises (AEs) leverage their global reputation and The Associated Enterprises (AEs) leverage their global reputation and The Associated Enterprises (AEs) leverage their global reputation and

customer/vendor relationshi customer/vendor relationships to identify new clients and share their ps to identify new clients and share their

expertise, thereby helping the Assessee secure projects and enhance expertise, thereby helping the Assessee secure projects and enhance expertise, thereby helping the Assessee secure projects and enhance

financial performance. The Ld. AR argued that, since these services are financial performance. The Ld. AR argued that, since these services are financial performance. The Ld. AR argued that, since these services are

closely integrated with the Assessee’s operations, determining the Arm’s closely integrated with the Assessee’s operations, determining the Arm’s closely integrated with the Assessee’s operations, determining the Arm’s

Length Price (ALP) on an aggregate basis using TNMM is more Length Price (ALP) on an aggregate basis using TNMM is more Length Price (ALP) on an aggregate basis using TNMM is more

appropriate, and therefore, these services cannot be segregated and appropriate, and therefore, these services cannot be segregated and appropriate, and therefore, these services cannot be segregated and

benchmarked independently. benchmarked independently.

4.3 The Ld. AR further relied on the decision of the jurisdictional Tribunal The Ld. AR further relied on the decision of the jurisdictional Tribunal The Ld. AR further relied on the decision of the jurisdictional Tribunal

in M/s. Siemens Gamesa R M/s. Siemens Gamesa Renewable Power Private Limited Vs DCIT [ITA enewable Power Private Limited Vs DCIT [ITA

No. 1420 & 376/Mds/2017] No. 1420 & 376/Mds/2017], where a co-ordinate bench ruled as follows: ordinate bench ruled as follows:

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd. “20.5. We have heard both the parties and perused the material on 20.5. We have heard both the parties and perused the material on 20.5. We have heard both the parties and perused the material on record. In our considered opinion, transaction to transaction record. In our considered opinion, transaction to transaction record. In our considered opinion, transaction to transaction approach is not required if the PLI of the Assessee at entity not required if the PLI of the Assessee at entity not required if the PLI of the Assessee at entity segment level is at arm’s length where the Assessee company has segment level is at arm’s length where the Assessee company has segment level is at arm’s length where the Assessee company has adopted TNMM for the purpose of benchmarking. Its adoption of adopted TNMM for the purpose of benchmarking. Its adoption of adopted TNMM for the purpose of benchmarking. Its adoption of CUP solely for the purpose of evaluating technical assistance fee CUP solely for the purpose of evaluating technical assistance fee CUP solely for the purpose of evaluating technical assistance fee would lead to chaos and be detrimental to the interests of both chaos and be detrimental to the interests of both chaos and be detrimental to the interests of both revenue and the Assessee. In other words, once the arm’s length revenue and the Assessee. In other words, once the arm’s length revenue and the Assessee. In other words, once the arm’s length criterion is tested at entity level, the learned TPO has no jurisdiction criterion is tested at entity level, the learned TPO has no jurisdiction criterion is tested at entity level, the learned TPO has no jurisdiction to examine the need, benefit etc. in relation to each transaction.” to examine the need, benefit etc. in relation to each transaction.” to examine the need, benefit etc. in relation to each transaction.”

4.4 The Ld. AR for the Assessee further submitted that the Ld. TPO / The Ld. AR for the Assessee further submitted that the Ld. TPO / The Ld. AR for the Assessee further submitted that the Ld. TPO /

DRP in his order has mentioned that e DRP in his order has mentioned that e-mail correspondences and reports mail correspondences and reports

cannot be considered as evidence for demonstrating the receipt of cannot be considered as evidence for demonstrating the receipt of cannot be considered as evidence for demonstrating the receipt of

services. Since the Assessee clearly demonstrat services. Since the Assessee clearly demonstrated the receipt of services ed the receipt of services

through sufficient mail correspondences along with a detailed need, receipt through sufficient mail correspondences along with a detailed need, receipt through sufficient mail correspondences along with a detailed need, receipt

and benefit documentation, the Ld. AR submits that the claim of the Ld. and benefit documentation, the Ld. AR submits that the claim of the Ld. and benefit documentation, the Ld. AR submits that the claim of the Ld.

TPO / DRP that e-mail correspondences is erroneous and not tenable. The mail correspondences is erroneous and not tenable. The mail correspondences is erroneous and not tenable. The

Assessee submit that all the supporting evidences could not be furnished submit that all the supporting evidences could not be furnished submit that all the supporting evidences could not be furnished

during the course of TP assessment proceedings on account of paucity of during the course of TP assessment proceedings on account of paucity of during the course of TP assessment proceedings on account of paucity of

time as various departments were required to be coordinated to secure the time as various departments were required to be coordinated to secure the time as various departments were required to be coordinated to secure the

said evidences. Now before us, the Assessee ha said evidences. Now before us, the Assessee has collated and filed the s collated and filed the

said additional evidence to substantiate the receipt of business and said additional evidence to substantiate the receipt of business and said additional evidence to substantiate the receipt of business and

management consultancy services to strengthen its contention to management consultancy services to strengthen its contention to management consultancy services to strengthen its contention to

benchmark the payment of management fees under TNMM. benchmark the payment of management fees under TNMM. benchmark the payment of management fees under TNMM.

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd. 5. Per contra, the Ld. DR strongly supported Per contra, the Ld. DR strongly supported the orders and directions of the orders and directions of

the lower authorities.

record. It is noted that the Assessee is fully dependent on its Associated record. It is noted that the Assessee is fully dependent on its Associated record. It is noted that the Assessee is fully dependent on its Associated

Enterprise (AE) for business management and consultancy services, for Enterprise (AE) for business management and consultancy services, for Enterprise (AE) for business management and consultancy services, for

which a fee is payable. Neither the Learn which a fee is payable. Neither the Learned TPO nor the Learned DRP has ed TPO nor the Learned DRP has

questioned the Assessee’s reliance on its AE for international business questioned the Assessee’s reliance on its AE for international business questioned the Assessee’s reliance on its AE for international business

development, development, marketing, marketing, legal, legal, and and technology technology-related related services. services.

Additionally, the Assessee has submitted substantial additional evidence Additionally, the Assessee has submitted substantial additional evidence Additionally, the Assessee has submitted substantial additional evidence

before us to further substantiate the receipt of management services. In the ther substantiate the receipt of management services. In the ther substantiate the receipt of management services. In the

interest of justice and fairness, we remit this issue to the file of the TPO to interest of justice and fairness, we remit this issue to the file of the TPO to interest of justice and fairness, we remit this issue to the file of the TPO to

examine the additional evidence, seek further details if necessary, and examine the additional evidence, seek further details if necessary, and examine the additional evidence, seek further details if necessary, and

benchmark the transaction based on the meth benchmark the transaction based on the methodology outlined by us odology outlined by us

below. The TPO shall provide the Assessee with adequate opportunity to below. The TPO shall provide the Assessee with adequate opportunity to below. The TPO shall provide the Assessee with adequate opportunity to

submit the required details or documents. submit the required details or documents.

6.4 Regarding the methodology for benchmarking the management Regarding the methodology for benchmarking the management Regarding the methodology for benchmarking the management

charges, it is noted that the Assessee has aggregated thi charges, it is noted that the Assessee has aggregated thi charges, it is noted that the Assessee has aggregated this transaction and

benchmarked it under TNMM. The Ld. AR strongly contended that benchmarked it under TNMM. The Ld. AR strongly contended that benchmarked it under TNMM. The Ld. AR strongly contended that

payments for business and management consultancy services are closely payments for business and management consultancy services are closely payments for business and management consultancy services are closely

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd. linked to the Assessee’s business operations and therefore cannot be linked to the Assessee’s business operations and therefore cannot be linked to the Assessee’s business operations and therefore cannot be

segregated and benchmarked independen segregated and benchmarked independently. To support this view, the Ld. tly. To support this view, the Ld.

AR relied on the jurisdictional decision in M/s. Doowon Automotive AR relied on the jurisdictional decision in M/s. Doowon Automotive AR relied on the jurisdictional decision in M/s. Doowon Automotive

Systems India Private Limited vs DCIT [IT(TP)A No. 88/Chny/2024], which Systems India Private Limited vs DCIT [IT(TP)A No. 88/Chny/2024], which Systems India Private Limited vs DCIT [IT(TP)A No. 88/Chny/2024], which

held as follows:

“24.0 We have noted that the facts of the present case are akin t “24.0 We have noted that the facts of the present case are akin t “24.0 We have noted that the facts of the present case are akin to those available in judicial precedence discussed herein above and no those available in judicial precedence discussed herein above and no those available in judicial precedence discussed herein above and no distinguishment of facts was pointed out by the Revenue. Accordingly, distinguishment of facts was pointed out by the Revenue. Accordingly, distinguishment of facts was pointed out by the Revenue. Accordingly, in respectful compliance to the same, we direct the Assessing Officer in respectful compliance to the same, we direct the Assessing Officer in respectful compliance to the same, we direct the Assessing Officer to aggregate technical fee payments and bench to aggregate technical fee payments and benchmark the same under mark the same under Transactional Net Margin Method (TNMM) after allowing customs duty Transactional Net Margin Method (TNMM) after allowing customs duty Transactional Net Margin Method (TNMM) after allowing customs duty adjustment, working capital adjustment and treating miscellaneous adjustment, working capital adjustment and treating miscellaneous adjustment, working capital adjustment and treating miscellaneous expenses as operating in nature for the assessee and the comparable expenses as operating in nature for the assessee and the comparable expenses as operating in nature for the assessee and the comparable companies. In case the assessee’s m companies. In case the assessee’s margin is at arm’s length then argin is at arm’s length then there would be no requirement to make separate adjustment for there would be no requirement to make separate adjustment for there would be no requirement to make separate adjustment for technical fee payments. With these specific directions we remit this technical fee payments. With these specific directions we remit this technical fee payments. With these specific directions we remit this issue to the Ld.TPO to redetermine the arm’s length price as per our issue to the Ld.TPO to redetermine the arm’s length price as per our issue to the Ld.TPO to redetermine the arm’s length price as per our observations herein above. observations herein above. Accordingly, all the grounds of appeal Accordingly, all the grounds of appeal nos.2.32 to 2.39 are allowed for statistical purposes.” nos.2.32 to 2.39 are allowed for statistical purposes.”

6.5 We also note the jurisdictional decision relied upon by the Ld. AR in We also note the jurisdictional decision relied upon by the Ld. AR in We also note the jurisdictional decision relied upon by the Ld. AR in

M/s. Siemens Gamesa Renewable Power Private Limited vs DCIT [ITA No. M/s. Siemens Gamesa Renewable Power Private Limited vs DCIT [ITA No. M/s. Siemens Gamesa Renewable Power Private Limited vs DCIT [ITA No.

1420 & 376/Mds/2017], where a co , where a co-ordinate bench has held as follows: ordinate bench has held as follows:

“20.5. We have heard both the parties and perused the material on 20.5. We have heard both the parties and perused the material on 20.5. We have heard both the parties and perused the material on record. In our considered opinion, transaction to transaction record. In our considered opinion, transaction to transaction record. In our considered opinion, transaction to transaction approach is not required if the PLI of the Assessee at entity segment approach is not required if the PLI of the Assessee at entity segment approach is not required if the PLI of the Assessee at entity segment level is at arm’s length where the Assessee company has adopted level is at arm’s length where the Assessee company has adopted level is at arm’s length where the Assessee company has adopted TNMM for the purpose of benchmarking. Its adoption of CUP solely TNMM for the purpose of benchmarking. Its adoption of CUP solely TNMM for the purpose of benchmarking. Its adoption of CUP solely for the purpose of evaluating technical assistance fee would lead to for the purpose of evaluating technical assistance fee would lead to for the purpose of evaluating technical assistance fee would lead to chaos and be detrimental to the interests of both revenue chaos and be detrimental to the interests of both revenue chaos and be detrimental to the interests of both revenue and the Assessee. In other words, once the arm’s length criterion is tested at Assessee. In other words, once the arm’s length criterion is tested at Assessee. In other words, once the arm’s length criterion is tested at entity level, the learned TPO has no jurisdiction to examine the need, entity level, the learned TPO has no jurisdiction to examine the need, entity level, the learned TPO has no jurisdiction to examine the need, benefit etc. in relation to each transaction.” benefit etc. in relation to each transaction.”

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd. 6.6 We note that the facts of the present case are simila We note that the facts of the present case are simila We note that the facts of the present case are similar to those

considered in the judicial precedents discussed above, and the Revenue considered in the judicial precedents discussed above, and the Revenue considered in the judicial precedents discussed above, and the Revenue

has not pointed out any distinguishing facts. In accordance with these has not pointed out any distinguishing facts. In accordance with these has not pointed out any distinguishing facts. In accordance with these

precedents, we direct the TPO to aggregate the payments for business and precedents, we direct the TPO to aggregate the payments for business and precedents, we direct the TPO to aggregate the payments for business and

management consultancy service management consultancy services and benchmark them under the s and benchmark them under the

Transactional Net Margin Method (TNMM). If the Assessee’s margin is Transactional Net Margin Method (TNMM). If the Assessee’s margin is Transactional Net Margin Method (TNMM). If the Assessee’s margin is

found to be at arm’s length, no separate adjustment for payments towards found to be at arm’s length, no separate adjustment for payments towards found to be at arm’s length, no separate adjustment for payments towards

business and management consultancy services will be necessary. In view business and management consultancy services will be necessary. In view business and management consultancy services will be necessary. In view

of these directions, we remit this issue to the Learned TPO to redetermine ections, we remit this issue to the Learned TPO to redetermine ections, we remit this issue to the Learned TPO to redetermine

the arm’s length price in line with our observations. Consequently, all the arm’s length price in line with our observations. Consequently, all the arm’s length price in line with our observations. Consequently, all

grounds of appeal Nos. 2.1 to 2.6 are allowed for statistical purposes. grounds of appeal Nos. 2.1 to 2.6 are allowed for statistical purposes. grounds of appeal Nos. 2.1 to 2.6 are allowed for statistical purposes.

the Assessee’s appeal, pertains to the recharacterization of outstanding the Assessee’s appeal, pertains to the recharacterization of outstanding the Assessee’s appeal, pertains to the recharacterization of outstanding

trade receivables as a separate international transaction. The Assessing trade receivables as a separate international transaction. The Assessing trade receivables as a separate international transaction. The Assessing

Officer treated the outstanding receivables from the Associated Enterprise Officer treated the outstanding receivables from the Associated Enterprise Officer treated the outstanding receivables from the Associated Enterprise

(AE) as a distinct international transaction under the Explanation to section s a distinct international transaction under the Explanation to section s a distinct international transaction under the Explanation to section

92B of the Act and imputed interest at LIBOR plus 450 basis points on an 92B of the Act and imputed interest at LIBOR plus 450 basis points on an 92B of the Act and imputed interest at LIBOR plus 450 basis points on an

ad hoc basis as the arm’s length interest rate. ad hoc basis as the arm’s length interest rate.

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd. 7.1 The Ld. AR for the Assessee submitted that this issue The Ld. AR for the Assessee submitted that this issue The Ld. AR for the Assessee submitted that this issue covered by

various decisions of ITAT Chennai benches wherein it has been held that various decisions of ITAT Chennai benches wherein it has been held that various decisions of ITAT Chennai benches wherein it has been held that

outstanding receivables is an international transaction, however when it outstanding receivables is an international transaction, however when it outstanding receivables is an international transaction, however when it

comes to benchmarking, this Tribunal has held that Average LIBOR was to comes to benchmarking, this Tribunal has held that Average LIBOR was to comes to benchmarking, this Tribunal has held that Average LIBOR was to

be adopted as the appropria be adopted as the appropriate rate for benchmarking the delayed te rate for benchmarking the delayed

receivables. Relying upon the same, the Ld. AR pleaded that Average receivables. Relying upon the same, the Ld. AR pleaded that Average receivables. Relying upon the same, the Ld. AR pleaded that Average

LIBOR may be adopted for imputing interest. LIBOR may be adopted for imputing interest.

7.2 Per contra, the Ld. DR strongly supported the orders and directions of Per contra, the Ld. DR strongly supported the orders and directions of Per contra, the Ld. DR strongly supported the orders and directions of

the lower authorities.

7.3 We have heard the rival contentions, perused the material available We have heard the rival contentions, perused the material available We have heard the rival contentions, perused the material available

on record, gone through the orders of lower authorities and case laws on record, gone through the orders of lower authorities and case laws on record, gone through the orders of lower authorities and case laws

relied upon. We find that an identical issue has already been adjudicated relied upon. We find that an identical issue has already been adjudicated relied upon. We find that an identical issue has already been adjudicated

by the co-ordinate bench in the case of ordinate bench in the case of M/s. Acqueon Technologies Pvt Ltd /s. Acqueon Technologies Pvt Ltd vs DCIT, [IT(TP)A Nos: 34 & 115/Chny/2024] wherein this Tribunal has vs DCIT, [IT(TP)A Nos: 34 & 115/Chny/2024] wherein this Tribunal has

directed the AO to recompute interest by adopting Average LIBOR as the directed the AO to recompute interest by adopting Average LIBOR as the directed the AO to recompute interest by adopting Average LIBOR as the

basis. The relevant findings of the Tribunal are reproduced below: basis. The relevant findings of the Tribunal are reproduced below: basis. The relevant findings of the Tribunal are reproduced below:

“26. The first issue that came up for our consideration from ground no. 2 ssue that came up for our consideration from ground no. 2 ssue that came up for our consideration from ground no. 2 to 11 of this appeal is recharacterization of outstanding trade to 11 of this appeal is recharacterization of outstanding trade to 11 of this appeal is recharacterization of outstanding trade receivables as separate international transactions. Since this issue has receivables as separate international transactions. Since this issue has receivables as separate international transactions. Since this issue has already been adjudicated in ITA No.34/CHY/2024(supra) for AY already been adjudicated in ITA No.34/CHY/2024(supra) for AY already been adjudicated in ITA No.34/CHY/2024(supra) for AY 2020- 21, by following the same, we direct the Assessing officer to recompute 21, by following the same, we direct the Assessing officer to recompute 21, by following the same, we direct the Assessing officer to recompute interest by adopting Average LIBOR as the basis for imputing interest interest by adopting Average LIBOR as the basis for imputing interest interest by adopting Average LIBOR as the basis for imputing interest on outstanding Trade Receivables.” on outstanding Trade Receivables.”

IT(TP)A No.120 IT(TP)A No.120/Chny/2024 M/s. Plinton Mobility Solutions Pvt. Ltd. Mobility Solutions Pvt. Ltd. 7.4 In view of the above and following the decisions of co In view of the above and following the decisions of co In view of the above and following the decisions of co-ordinate benches of this Tribunal, we direct the Assessing Officer to compute benches of this Tribunal, we direct the Assessing Officer to compute benches of this Tribunal, we direct the Assessing Officer to compute interest on outstanding receivables from the Associated Enterprises (AEs) interest on outstanding receivables from the Associated Enterprises (AEs) interest on outstanding receivables from the Associated Enterprises (AEs) by using the average LIBOR as the basis for imputation. Consequently, the by using the average LIBOR as the basis for imputation. Consequently, the by using the average LIBOR as the basis for imputation. Consequently, the grounds of appeal Nos. 3.1 to 3.2 raise grounds of appeal Nos. 3.1 to 3.2 raised by the Assessee are allowed. d by the Assessee are allowed.

Order pronounced on 31st day of December, 2025 at Chennai. Order pronounced on day of December, 2025 at Chennai.

Sd/- Sd/ Sd/- (एस. आर. रघुनाथा रघुनाथा) (मनु कुमार कुमार िग�र) (S.R.RAGHUNATHA) (S.R.RAGHUNATHA) (MANU KUMAR GIRI) (MANU KUMAR GIRI) लेखा लेखा सद)य लेखा लेखा सद)य सद)य/ACCOUNTANT MEMBER सद)य �याियक �याियक सद)य �याियक �याियक सद)य सद)य/JUDICIAL MEMBER सद)य /ACCOUNTANT MEMBER /JUDICIAL MEMBER चे�नई चे�नई/Chennai, चे�नई चे�नई *दनांक *दनांक/Dated: 31st December, 2025. *दनांक *दनांक December, 2025. EDN, Sr. PS आदेशक� आदेश क��ितिल+प �ितिल+पअ,े+षत अ,े+षत आदेश आदेश क� क� �ितिल+प �ितिल+प अ,े+षत अ,े+षत 1. अपीलाथ� अपीलाथ� अपीलाथ�/Appellant अपीलाथ� 2. ��यथ� ��यथ� ��यथ�/Respondent ��यथ� 3. आयकरआयु- आयकरआयु- आयकरआयु-/CIT, Chennai / Madurai / आयकरआयु- /CIT, Chennai / Madurai / Salem / Coimbatore. Salem / Coimbatore. 4. +वभागीय�ितिनिध +वभागीय�ितिनिध +वभागीय�ितिनिध/DR +वभागीय�ितिनिध 5. गाड�फाईल गाड�फाईल गाड�फाईल/GF गाड�फाईल