ADDL. CIT, NEW DELHI vs. M/S GIESECKE & DEVRIENT PVT. LTD., GURGAON

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ITA 1159/DEL/2017Status: DisposedITAT Delhi08 July 2021AY 2006-073 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found that the CIT(A) had rightly dealt with the merits of the addition concerning management and consultancy fees. No separate markup addition was required when the TPO had already adopted the TNMM method.

What were the facts?

The revenue appealed against the CIT(A)'s deletion of transfer pricing adjustments. The Assessing Officer had made additions, which were restored to the AO by the ITAT for fresh adjudication. The TPO initially refused jurisdiction, but later provided a remand report.

What were the issues?

Whether the CIT(A) erred in deleting transfer pricing adjustments by not benchmarking the transaction or determining the ALP, despite the TPO's limited verification.

Which sections of the Income-tax Act were involved?

Section 92CA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘I-1’, NEW DELHI

Before: Sh. Kul BharatDr. B. R. R. Kumar

For Respondent: DR &
Hearing: 05.07.2021Pronounced: 08.07.2021

Heard together (2 matters)

ITA No. 1159/Del/2017
ITA No. 2051/Del/2017

Read from the judgment's own cause title. This page is filed under one of them.

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeals have been filed by the revenue against the orders of the ld. CIT(A)-19, New Delhi dated 15.12.2016 and 09.01.2017.

2.

Since, the issues involved in both the appeals are identical, they were heard together.

3.

In following grounds have been raised by the revenue:

“ 2. On facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition on account of transfer pricing adjustments ignoring the fact that & 2051/Del/2017 2 Giesecke & Devrient Pvt. Ltd. during the remand proceedings, the TPO only verified the genuineness of the documents and did not benchmarked the transaction or determined the ALP.”

4.

The relevant facts and adjudication is as under:

1.

The assessment order in this case has been passed on 30.09.2010 for the assessment year 2006-07 and on 24.10.2011 for the assessment year 2007-08 2. This is a second round of appeal before the Tribunal. 3. The Co-ordinate Bench of ITAT vide order dated 15.03.2013 in restored the issue of adjustment of management & consultancy fee, purchase of finished goods to the file of the AO. 4. The AO referred the matter to the TPO. 5. TPO refused to entertain the request of the AO stating that the TPO has no jurisdiction over the directions given by the ITAT. 6. The Assessing Officer held that the “TPO is himself confused about the jurisdiction over the TP matter” and ‘wisely’ repeated the addition made in the original order in the set aside proceedings.(Para 3.3 of the AO) 7. The ld. CIT (A), however, called for a remand report from the TPO-2(1)(1) and received reply on 19.12.2016. 8. Having gone through the remand report, the ld. CIT (A) has deleted the addition. 9. Aggrieved with the order of the ld. CIT (A), the ld. PCIT has approved filing of further appeal before the Tribunal.

& 2051/Del/2017 3 Giesecke & Devrient Pvt. Ltd. 10. On merits of the subject, we find that the issue involves further adjustment on account of management & consultancy fee for which no separate addition is required for mark up when the TPO has already adopted TNMM. To that extent, the merit of the addition has been rightly dealt by the ld. CIT(A).

5.

In the result, both the appeals of the revenue are dismissed. Order Pronounced in the Open Court on 08/07/2021.

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