RABO SHARED SERVICES PRIVATE LIMITED ,MUMBAI vs. ADDL/JT/DY/ASSTT/CIT/ITO/NFAC DELHI, DELHI

This appeal by the assessee is directed against final assessment order dated 17.01.2022 passed by the Ld. Assessing Officer [National Faceless Assessment Centre] for assessment year 2017-18, raising following grounds:

Ground 1: Determining the Arm's Length Price (ALP) of the Ground 1: Determining the Arm's Length Price (ALP) of the Ground 1: Determining the Arm's Length Price (ALP) of the international international international transaction transaction transaction pertaining pertaining pertaining to to to payment payment payment of of of business support services as NIL business support services as NIL On the facts and circumstances On the facts and circumstances of the case and in law, the of the case and in law, the learned AO, based on the directions of the Hon'ble DRP, erred in learned AO, based on the directions of the Hon'ble DRP, erred in learned AO, based on the directions of the Hon'ble DRP, erred in law and on facts, in determining the ALP of the international law and on facts, in determining the ALP of the international law and on facts, in determining the ALP of the international transaction pertaining to payment of business support services to transaction pertaining to payment of business support services to transaction pertaining to payment of business support services to the Associated Enterprise (AE) as the Associated Enterprise (AE) as NIL, and in making an upward NIL, and in making an upward adjustment of INR 7,23,01,619. adjustment of INR 7,23,01,619. Ground 2: In making an upward adjustment of INR Ground 2: In making an upward adjustment of INR Ground 2: In making an upward adjustment of INR 7,23,01,619 for the payment of business support services, 7,23,01,619 for the payment of business support services, 7,23,01,619 for the payment of business support services, the Hon'ble DRP and the learned AO, inter the Hon'ble DRP and the learned AO, inter-alia, erred on alia, erred on the following grounds: the following grounds: 2.1 In rejecting the documentation and evidence submitted by the ecting the documentation and evidence submitted by the ecting the documentation and evidence submitted by the Appellant in support of the services received by the Appellant Appellant in support of the services received by the Appellant Appellant in support of the services received by the Appellant from its AEs and in incorrectly concluding that no services were from its AEs and in incorrectly concluding that no services were from its AEs and in incorrectly concluding that no services were actually received by the Appellant. actually received by the Appellant. 2.2 In exceeding his authority under In exceeding his authority under section 92CA of the Act and section 92CA of the Act and questioning the business rationale of the expenditure by calling questioning the business rationale of the expenditure by calling questioning the business rationale of the expenditure by calling for evidence to evaluate the benefits derived by the Appellant. for evidence to evaluate the benefits derived by the Appellant. for evidence to evaluate the benefits derived by the Appellant. 2.3 In not taking into account the independent auditor's In not taking into account the independent auditor's In not taking into account the independent auditor's certificate which show the cost of service certificate which show the cost of services incurred for the s incurred for the provision of each category of support service by each of the AEs provision of each category of support service by each of the AEs provision of each category of support service by each of the AEs and also by disregarding the independent and scientific and also by disregarding the independent and scientific and also by disregarding the independent and scientific allocation of cost of each category to the benefitting entities allocation of cost of each category to the benefitting entities allocation of cost of each category to the benefitting entities including the Appellant. including the Appellant. 2.4 In failing to appreciat In failing to appreciate that the support services provided by e that the support services provided by the overseas AEs is different and distinct from the services the overseas AEs is different and distinct from the services the overseas AEs is different and distinct from the services availed locally and based on merely the nomenclatures of the availed locally and based on merely the nomenclatures of the availed locally and based on merely the nomenclatures of the services as appearing in the Profit and Loss account of the services as appearing in the Profit and Loss account of the services as appearing in the Profit and Loss account of the Appellant, by arriving at the conc Appellant, by arriving at the conclusion that the support services lusion that the support services availed are duplicate in nature. availed are duplicate in nature. 2.5 In wrongly evaluating that the support services provided are In wrongly evaluating that the support services provided are In wrongly evaluating that the support services provided are in the nature of shareholder activities without bothering to in the nature of shareholder activities without bothering to in the nature of shareholder activities without bothering to evaluate the nature of services actually provided by the AEs to evaluate the nature of services actually provided by the AEs to evaluate the nature of services actually provided by the AEs to the Appellant. the Appellant. 2.6 In erroneously relying upon the provisions of the Indian In erroneously relying upon the provisions of the Indian In erroneously relying upon the provisions of the Indian Evidence Act, 1897 to conclude that in the event the Appellant Evidence Act, 1897 to conclude that in the event the Appellant Evidence Act, 1897 to conclude that in the event the Appellant provided the required evidences, the same would have gone provided the required evidences, the same would have gone provided the required evidences, the same would have gone against it and thus, the Appellant purposely could not furn against it and thus, the Appellant purposely could not furn against it and thus, the Appellant purposely could not furnish the requisite documents requisite documents Ground 3: Initiation of penalty proceedings under section Ground 3: Initiation of penalty proceedings under section Ground 3: Initiation of penalty proceedings under section 270A of the Act 270A of the Act On the facts and circumstances of the case, the learned AO erred On the facts and circumstances of the case, the learned AO erred On the facts and circumstances of the case, the learned AO erred in initiating penalty proceedings under section 270A of the Act for in initiating penalty proceedings under section 270A of the Act for in initiating penalty proceedings under section 270A of the Act for under-reporting reporting of of income i ncome which which is is in in consequence consequence of of misreporting thereof for addition made with respect to payment misreporting thereof for addition made with respect to payment misreporting thereof for addition made with respect to payment for availing business support services in the final assessment for availing business support services in the final assessment for availing business support services in the final assessment order. Ground 4: Non Ground 4: Non-grant of credit for tax deducted at source grant of credit for tax deducted at source (TDS) and advance tax (TDS) and advance tax On the facts and circumstances of the case, the learned AO erred s and circumstances of the case, the learned AO erred s and circumstances of the case, the learned AO erred in not granting credit for TDS amounting to INR 55,861,302 and in not granting credit for TDS amounting to INR 55,861,302 and in not granting credit for TDS amounting to INR 55,861,302 and advance tax paid amounting to INR 67,000,000 under the PAN of advance tax paid amounting to INR 67,000,000 under the PAN of advance tax paid amounting to INR 67,000,000 under the PAN of 'Rabo India Finance Limited' [RIFL], being the amalgamating 'Rabo India Finance Limited' [RIFL], being the amalgamating 'Rabo India Finance Limited' [RIFL], being the amalgamating entity [appointed entity [appointed date of 1. April 2017], without appreciating the date of 1. April 2017], without appreciating the fact that income earned by RIFL corresponding to the said fact that income earned by RIFL corresponding to the said fact that income earned by RIFL corresponding to the said tax.credit has been consolidated with income of the Appellant tax.credit has been consolidated with income of the Appellant tax.credit has been consolidated with income of the Appellant offered to tax during the year under consideration. offered to tax during the year under consideration. Ground 5: Consequential interest un Ground 5: Consequential interest under section 234B and der section 234B and 234C of the Act 234C of the Act On the facts and circumstances of the case, the learned AO erred On the facts and circumstances of the case, the learned AO erred On the facts and circumstances of the case, the learned AO erred in computing consequential interest under section 234B and in computing consequential interest under section 234B and in computing consequential interest under section 234B and 234C of the Act. 234C of the Act. Each of the grounds of appeal referred above is separate and Each of the grounds of appeal referred above is separate and Each of the grounds of appeal referred above is separate and may kindly be con may kindly be considered independent of each other. other.

2. At the outset, the At the outset, the Learned Counsel for the assessee for the assessee referred to a letter filed and submitted that the assessee has opted for the submitted that the assessee has opted for the submitted that the assessee has opted for the “Direct Tax Vivad Se Vishwas Scheme, 2024” “Direct Tax Vivad Se Vishwas Scheme, 2024” and has already and has already filed the prescribed Form No. 1 before the appropriate authority. filed the prescribed before the appropriate authority. Furthermore, Form No. 2 Form No. 2, determining the tax liability, has been , determining the tax liability, has been The assessee stated that, as per Form No. 2 issued to the assessee. issued to the assessee. The assessee stated that, as per issued by the Department, no tax liability is payable, and the issued by the Department, no tax liability is payable, and the issued by the Department, no tax liability is payable, and the assessee is in the process of filing Form No. 3 in accordance with assessee is in the proce in accordance with the provisions of the Scheme. the provisions of the Scheme. In light of the assessee’s request to In light of the assessee’s request to withdraw withdraw withdraw the the the present present present appeal, appeal, appeal, the the the same same same is is is dismissed dismissed dismissed as as as infructuous.