SEMPERTRANS INDIA PRIVATE LIMITED,ROHA vs. INCOME-TAX OFFICER, PANVEL

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

“Legal Grounds: 1. On the facts and circumstances of the case and in law, the Hon'ble DRP has erred in issuing directions in violation to provisions of section 144C(8), read with the explanation thereto, by directing the AO to make additional disallowance under section 37(1). Accordingly, the directions of the Hon'ble DRP are bad in law and ought to be quashed. Consequently, the final assessment order dated 27 June 2024, is bad in law and ought to be quashed.

2. On the facts and circumstances of the case and in law, the Ld. AO has erred in not passing the final assessment order dated 27 June 2024 as per the directions of the Hon'ble DRP Panel as prescribed in section 144C (13), thereby rendering the assessment order being null & void and liable to be quashed.

3. On the facts and circumstances of the case and in law, the final assessment order dated 27 June 2024 is issued beyond the time limit as prescribed u/s 153 of the Act. Consequently, the final assessment order is time barred and deserves to be quashed.

4. The Hon'ble DRP erred in confirming the action of the AO / TPO ignoring the fact that there was no intention by the Appellant to shift profits outside India.

5. The Hon'ble DRP erred in upholding/confirming the action of Ld. TPO, in applying Other Method inappropriately and further erred by not bringing on record any comparable data as mandated by section 92C of the Act read with Rule 10B and Rule 10C of the Rules D Factual Grounds:

On the facts and circumstances of the case and in contrary to law, Ld. TPO/Ld. AO pursuant to the directions issued by the Hon'ble DRP, erred in:

6. Making an addition of INR 5,66,05,177 to the Appellant's income in connection with payment by the Appellant to its Associated Enterprises ('AEs'), for availing intra group services and thereby determining a total income of INR 5,66,75,610 in the order dated 27 June 2024.

7. Upholding/confirming the action of Ld. TPO, by determining the Arm's Length Price ('ALP') of the payment for services as 'NIL' by disregarding the detailed benchmarking approach and the methodology adopted by the Appellant in its TP documentation maintained under section 92D of the Act read with Rule 10D of the Income Tax Rules, 1962 ('Rules').

8. Upholding/confirming the action of Ld. TPO, in going beyond the scope under section 92CA in questioning the commercial rationale of the legitimate business expenses incurred by the Appellant and further erred in determining the ALP of payment of services to be NIL.

9. Rejecting the detailed documentary evidences including cost allocation workings, as submitted by the Appellant before the Ld. TPO and Hon'ble DRP during the course of proceedings, to substantiate the need-benefit-evidence test of the services availed, without providing cogent findings and in concluding that the Appellant is not able to discharge the onus of proving that the services have been rendered by the AE.

10. Making an adjustment without considering the fact that the cost allocation methodology is uniformly and consistently followed by the Semperit Group for charging intra group charges to all the group companies globally.

12. Not appreciating that the services availed by the Appellant are not in the nature of shareholder services nor stewardship, duplicative or incidental services for which no independent entity would agree to make any payment.

13. Not appreciating that the Appellant duly withheld the taxes on payment made to the AE and that the AE has also duly filed a return of income in India offering such services to taxes, and that disallowing payments made by the Appellant would lead to double taxation.

14. Not appreciating that the said payment for intra group services of INR 5,66,05,177 has a direct nexus with the business of the appellant. Accordingly, the Ld. AO/Hon'ble DRP have erred in disallowing the said payment u/s 37 of the Act.

15. Initiating penalty proceedings under section 274 read with section 270A of the Act, without appreciating the fact that the additions made by the Ld. AO are not in accordance with the law.

Without prejudice to the above grounds

16. On the facts and circumstances of the case and in law, the AO has erred in passing the impugned Assessment Order under Section 143(3) read with Section 144C (13) of the Act determining total income at Rs. 5,66,75,610 as against INR Nil income as per the return of income filed by the Appellant.

17. On the facts and in the circumstances of the case and in law, the AO has erred, in raising dermand of INR 2,11,57,400 on the Appellant.

Set-off of brought business loss and unabsorbed depreciation not granted

18. On the facts and circumstances of the case and in law, the AO has erred in not granting set-off of brought forward losses and unabsorbed depreciation without specifying any reasons and thereby erred in raising the consequent demand of Rs. 2,11,57,400 (including interest).

20. The Appellant prays that the set-off of eligible brought forward business loss and unabsorbed depreciation be granted and total taxable income be recomputed at INR Nil and balance business loss/unabsorbed depreciation be allowed to be carried forward to AY 2021-22.

Interest levied under Section 234A, 234B and 234C of the Act

21. On facts and circumstances of the case and in law, the AO erred in levying interest of INR 6,15,728 under Section 234A, INR 78,50,532 under Section 234B and INR 7,77,353 under Section 234C of the Act.

22. The Appellant prays that the charging of interest under Sections 234A, 234B, 234C of the Act, is erroneous, unwarranted and be deleted.

The Appellant prays that the additions made by the Ld. TPO/Ld. AO under the directions of the Hon'ble DRP be deleted and consequential relief be granted.

The Appellant craves leave to add, alter, amend and/or withdraw any of the above grounds of appeal and to submit such statements, documents and papers as may be considered necessary either at or before the hearing of this appeal as per law.”

5. So far as Grounds of appeal No.4, 16 and 17 they are stated to be general in nature which need no adjudication.

(i) Large difference in the opening stock of the current year and closing stock of previous year. (ii) Disallowance u/s.40A(7) (Gratuity provisions) (iii) Large expenditure by way of penalty or find for violation of any law for the time being in force (iv) High risk International Transactions (Entity reported in CbCR data) (TP Risk Parameter)

11. Subsequently, assessee challenged the draft assessment order and approached the Dispute Resolution Panel (DRP) and made submissions on all the issues raised regarding the adjustments proposed in the draft assessment order. Ld. DRP vide its order dated 24.05.2024 only sustained the adjustment proposed for Intra Group Services at Rs.5,66,05,177/- affirming the observation of ld. TPO that the documents/evidence filed by the assessee do not provide any relevant admissible details for rendition of services by the AE do not provide cost/value of the services, nor establish the receipt of services by the applicant assessee from its AE- SAH. Ld. DRP further held that no independent party would have paid sum of Rs.5,66,05,177/- for no services and ALP being computed by ld. TPO is upheld. Ld. AO in compliance to the directions given by ld. DRP vide order dated 24.05.2024 passed final assessment order on 27.06.2024 and adjustment for ALP of Intra Group Services as Nil, disallowed the claim of expenses at Rs.5,66,05,177/- and assessed the total income at Rs.5,66,75,608/-.

“4.2.4.2 Determining whether intra-group services have been rendered 4.2.4.3 Under the arm's length principle, the question whether an intra-group service has been rendered when an activity is performed for one or more group members by another group member should depend on whether the activity provides a respective group member with economic or commercial value to enhance its commercial position. This can be determined by considering whether an independent enterprise in comparable circumstances would have been willing to pay for the activity if performed for it by an independent enterprise or would have performed the activity in house for itself. If the activity is not one for which the independent enterprise would have been willing to pay or perform for itself, the activity ordinarily should not be considered as an intra-group service under the arm's length principle.

4.2.4.4 In general, no intra-group service should be found for activities undertaken by one group member that merely duplicate a service that another group member is performing for itself, or that is being performed for such other group member by a third party. An exception may be where the duplication of services is only temporary, for example, where an MNE group is reorganizing to centralize its management functions. Another exception would be where the duplication is undertaken to reduce the risk of a wrong business decision (e.g. by getting a second legal opinion on a subject).

4.2.4.5 There are some cases where an intra-group service performed by a group member such as a shareholder or coordinating centre relates only to some group members but incidentally provides benefits to other group members. The incidental benefits ordinarily would not cause these other group members to be treated as receiving an intra-group service because the activities producing the benefits would not be ones for which an independent enterprise ordinarily would be willing to pay.

4.2.4.6 Similarly, an associated enterprise should not be considered to receive an intragroup service when it obtains incidental benefits attributable solely to its being part of a larger concern, and not to any specific activity being performed.

4.2.4.7 While every attempt should be made to charge fairly for the service provided, any charging has to be supported by an identifiable and reasonably foreseeable benefit Any indirect-charge method should be sensitive to the commercial features of the individual case (e.g. the allocation key makes sense under the circumstances), contain safeguards against manipulation and follow sound accounting principles, and be capable of producing charges or allocations of costs that are commensurate with the actual or reasonably expected benefits to the recipient of the service.

The allocation might be based on turnover, or staff employed, or some other basis. Whether the allocation method is appropriate may depend on the nature and uSAHe of the service. i. The OECD guidelines provide that in an intra-group service there are two issues which need to be analysed, one, whether intro group services have in fact been provided. Second what is the charge for such services? ii. Along with the facts as narrated supra, I would like to also place on record judicial precedence and a culled-out summary of OECD views on the subject of intra group services. These, briefly, are as under.

Judicial precedence The decision of Bangalore ITAT in the case of Ws Gemplus India Private Limited in ITA number 352/ Bang/2009 wherein at para 20 the following has been held: i. "20. We heard both sides in detail and also perused the records of the case including the paper book filed by the assessee company running in to 390 pages The necessary facts of the case have already been discussed in paragraphs above. On examination of the facts and circumstances of the case and the terms of the agreement entered into by the assessee and its Singapore associate, the TPO has come to certain pertinent observations in her order. She has observed that the terms prescribed in the agreement in respect of the payments to be made by the assessee company are independent of the nature and volume of services, if any rendered by the Singapore Associate. This is a vital observation made by the TPO which goes to the root of the issue. The function of the TPO is to compare the payments made by the assessee company for services received if any and to see whether those payments are comparable. In a given scenario, the TPO has to examine whether the payments were ALP conducive. Therefore it is very imperative on the part of the assessee to establish before the TPO that the payments were made commensurate to the volume and quality of services and such costs are comparable. The payment terms as pointed out by the TPO are independent of the nature or volume of services. The assessee has defeated in this primary examination itself. The TPO is also justified in making a pertinent observation that the expenses are apportioned by Singpore affiliate among different country centres on the basis of their own agreements and not on the basis of the actual services rendered to the individual units. It is in addition to the above fundamental flaw, that the TPO has made a clear findings that there are no details available on record in respect of the nature of services rendered by Singapore affiliate to the assessee company. Therefore, we are of the considered view that the TPO is justified in holding that the assessee has not proved any commensurate benefits against the payments of service charges to the Singapore affiliate. Therefore, the TPO is justified in making the adjustment of ALP under sec. 92CA of the Income-tax Act 1961."[emphasis supplied]. ii. Further, attention is also invited to the decision of M/s Deloitte Consulting India Pvt. Ltd. in 1272, 1273/Mum./2011, wherein the following has been held:

"39. On the issue as to whether the TPO is empowered to determine the ALP at "nil", we find that the Bangalore Bench of the Tribunal in Gemplus India Pvt. Ltd. (supra), held that the assessee has to establish before the TPO that the payments made were commensurate to the volume and quality service and that such costs are comparable. When commensurate benefit against the payment of services is not derived, then the TPO is justified in making an adjustment under ALP.

9.2. After hearing the parties with reference to material on record, we find that the authorities below have not conclusively held that the assessee could not enter into such a transaction nor had they disallowed the same by holding that such an expenditure is not assessee's business expenditure. The DRP as well as the authorities below have merely elucidated that the payments are reimbursement in respect of Ms. Rita Ricken and other personnel's case to serve the interest of shareholders, By saying so they have only described the circumstance under which the international transaction has been entered by the appellant, so as to test the benefit that can be said to have reached the assessee, It, therefore, cannot be said to have questioned the commercial expediency of such transactions entered by the appellant. The I.T. rules contain exhaustive detail regarding nature of information and documents which are required to be maintained by the assessee. Rule 10D(1) of the IT. Rules, 1962 also mandates the maintainability of record of uncontrolled transactions to be taken into account in nalyzing the comparability of the international functions entered into by the assessee. It, therefore, is obligatory on part of the appellant to maintain such record and produce the same before the TPO to show that it has benchmarked the international transaction at ALP. This obligation, however, has not been discharged by the assessee.

9.3. The appellant in the present case is also not shown to be willing to pay any amount for such services, if it were, so provided by an independent enterprise or if the same would have been performed in house. The DRP is found to have considered these services as non-beneficial for the recipient and did not take it as chargeable services. The perusal of e-mails and other contemporaneous record only goes to reveal that incidental and passive association benefit has been provided by the associate enterprise. In this view of the matter there could neither be any cost contribution or cost reimbursement nor payment for such services to the AE. The TPO, therefore, has rightly adopted Nil value for benchmarking the arm's length price in respect of both these services. We, therefore, do not find any reason to interfere with the well-reasoned conclusion reached by the AO on this count. The grounds raised in appeal in this respect, therefore, stand rejected," iv. Further, attention is also invited to the decision of Delhi High Court in the case of Cushman and Wakefield in dated 23.05.2014, wherein the following has been held:

31. As explained, for 82.44% share of the revenue from the services of the Client Solution Group, the relatable cost allocation was 72.5%. The precise activities conducted by the Client Solutions Group for the benefit of the assessee out of the entire range of activities conducted by it, and the cost applicable to such activities have not been provided, instead a broad-brush Ir464 approach at flatly 'equating' the costs relatable to the revenue generated has been provided. Whilst several e-mails from Mr. Arshpreet Choudhary were placed on record, they-e evidence the fact that certain services were rendered. That constitutes only the first part of the exercise the second aspect is to relate the cost of specific activities conducted to the benefit incurred by the assessee, rather than allocate cost from a common pool or basket of revenue generated through an unexplained percentage relation to the revenue generated. The basis for the costs incurred, the activities for which they were incurred, and the benefit accruing to the assessee from those activities must all be proved to determine first, whether, and how much, of such expenditure was for the purpose of benefit of the assessee (deductible under Section 37 of the Act), and secondly, whether that amount passed muster under a transfer pricing analysis.

II. Duplicate services: Duplicative services are those that a group member offers to any other member which can be regarded as duplicate (ie, the service is already performed by the recipient or by an arm's length party on its behalf). In that case, no intra-group services should be regarded as being rendered by the group member. The OECD Guidelines, as well as the Canadian and US regulations, all agree that there is no added commercial value provided by such services, and thus they cannot be regarded as being rendered for the benefit of the related party. For example, when the subsidiary does not have personnel qualified to make such an analysis, and does not make the analysis itself, the cost of the financial analysis done by the parent must be allocated to the subsidiary. If, however, the subsidiary has qualified financial staffs that perform the analysis, and this analysis is then reviewed by the parent's financial staff, the review by the parent's financial staff is duplicative and an allocation may not be made.

III. Services that provide incidental benefits The OECD Guidelines highlight another set of services which does not warrant an allocation, namely services that are rendered and result in an incidental benefit. This refers to services performed by one group member (e.g. a shareholder or coordinating centre) for a particular group member or a set of group members, such that it also incidentally provides a benefit to other group members.

The OECD Guidelines provide two examples to explain the situation. The first involves a situation in which a reorganization or acquisition (disinvestment) deal that is carried out by a parent or sister company produces economies of scale or benefits for some other group member not directly involved in the decision. In this case, the service rendered is not an intragroup service because an independent enterprise would not be willing to pay for a service that provides only an incidental benefit.

The other example has been concerning an enterprise that obtains incidental benefits simply by virtue of its affiliation with the patent or the group per se (e.g. in the form of a higher credit rating). This situation generally does not call for the consideration of a service being rendered. However, if the higher credit rating is due to a guarantee provided by a group member or group's reputation derived from global marketing and public relation campaigns, then an intra-group service charge would be appropriate.

IV. On-Call Services: The OECD Guidelines refer to another special category of services in the context of intragroup services, namely services provided on call. The availability of such services generally requires the existence of a support group of some sort and an understanding between the group members about the nature of the assistance being provided in any field of operation whenever required, and on an on-call basis. For example, a parent company or a group service centre may be available to provide assistance with regard to legal, finance, technical or tax issues at any time.

The aspect that merits consideration here is whether the availability of that service in itself is regarded as a separate service (for chargeable purpose) over and above the service fee compensation for the actual service rendered. The justification provided in the OECD Guidelines for considering such availability as a separate service rendered is that it is common knowledge that independent enterprises incur so- called stand-by charges to ensure availability of those services when the need for them arises. An example of that service is the appointment of a legal, technical or financial service provider on a retainer basis. These services are not necessarily a normal requirement and may vary in terms of frequency and importance from year to year. Therefore, one must ascertain the potential need of the stand-by service option for the recipient of the services. In cases where the service requirement is remote or could be easily procured from other sources without an on-call service option, the availability of that option is redundant and, hence, unjustified. Therefore, to evaluate whether an on-call service is rendered, one must consider the benefit that the on call arrangement offers to the group over a period of several years, given the sporadic nature of the occurrence of those service needs (rather than only for the year of taxation under consideration).

4.2.4.8 Keeping in view the above referred judicial precedence and the OECD Guidelines, during the course of hearing, the assessee was asked to demonstrate the fact that services was actually rendered. The assessee was also asked to relate the cost of specific activities conducted by the AE for the benefit of the assessee. The assessee was also asked to demonstrate the basis of allocation of costs, the activities for which they were incurred, and the benefit accruing to the assessee from those activities.

4.2.4.9 In response to the same the assessee had filed certain details/document which were perused and not found tenable. It was observed that the various e-mails/evidences produced by the assessee do not demonstrate the rendering of any service by the AE to the assessee for which any payment would be made by an independent party in an arm's-length scenario. The nature of services as claimed by these e-mails/ documents reveal that they are general correspondences between the assessee and its AE. On perusal of the contents of these e-mails, it is clear that these are general notes and exchange of information. The nature of communication in these e-mails is of the nature which would be entered into between the group entities of any group. They are not of the nature to show any specific services rendered by the AE, for which any separate charge needs to be paid by the assessee to its AE. In fact, if one closely observes the nature of services from the e- mails produced, it is clear that the purported services for which payment is claimed are in the nature of shareholder services only. In other words, on perusal of these e-mails it is clear that it cannot be considered as services rendered for which entity acting on arm's-length basis, would agree to make any payment. Further, nothing has been placed on record by the assessee to demonstrate any benefit received by it from the services rendered for which the payment is claimed. Further, even if for argument sake, it is taken that these documents show that some services have been rendered, whether these had some value and if yes, the cost incurred for that and the benefit for which such cost was incurred, has not been proved by the assessee. The assessee has also not demonstrated that the price paid was such that an independent entity would have paid for such services for the benefits (if any) received by it. The notes given by the assessee do not demonstrate the benefits received for which such payment was made. Further, it has not been demonstrated that the cost allocated is commensurate with the benefits derived by the assessee, so as to justify the payment on arm's length basis.

4.2.4.10 Assessee has incurred 14 percentage of employee benefit expenses in relation to turnover. Hence, assessee submission that SIPL is thinly staffed company has no substantial basis.

4.2.4.11 Component of cost effectiveness and economy of scale cannot be need of the company as stated by the assessee in its submission. Need should have been substantiated with lack of adequate expertise with company or at domestic level. Further, assessee has not submitted any documents that can prove that assessee has explored the options from third party to substantiate the argument of cost effectiveness or economy of scale. Assessee has himself commented that it is difficult for him to quantify the benefit arise from services availed. No prudent businessman will incur expenses year on year if benefit for the same cannot be quantified or ascertained. Allocation key adopted by the assessee is like head count, number of email account etc rather, time sheet maintained by team management to calculate the man hours work performed by the employees for India specific activities would have been more logical and any third party would expect before making any payment for the services availed. Nature of services, from assessee's submission, itself highlights the fact that they are general in nature and are in the nature of shareholder activity only. Further, from perusal of financials it can be stated that there is also an element of duplication in the services availed. Thus, the benchmarking adopted by the assessee is rejected herewith and benchmarking proposed to be adopted by the TPO using other method, it is concluded that there is no third party would pay for services which are not availed substantially, need of the same has not been proved and benefit itself remarked to be difficult to calculate. Hence, ALP of Intra Group Services is proposed to be Rs. NIL.

(Adjustment of Rs. 5,66,05,177/-)

“9. Findings of the Panel: (i) The "Intra Group Services Fees are separate set of transactions which required to be benchmarked on own. The entity level approach is not relevant to the Intra Group Services fees since the Transfer Pricing Officer has made a categorical finding that the payments have not been commensurate to the services claimed to have been rendered. Hence, the payments are not regular international transactions and cannot be subsumed into broad- based comparison methods. (ii) The "Other Method" is the MAM in this peculiar case. (iii) There is a case of base erosion, and the sums are moving out of India without proper basis and devoid of Arm's length pricing. 9.10. Directions of the DRP: Thus, the claimed documents / evidence do not provide relevant and admissible details for "rendition of services" by the Associated Enterprise, cost/value of the services, nor establish the "receipt of services" by the Applicant assessee from Associated Enterprises. The Applicant has not been able to establish that it has received service from the Associated Enterprise, Semperit Management AG. Hence, the action of the Ld. TPO in proposing adjustment under "Intra Group Services Fees holding that no independent party would have paid sum of Rs.5,66,05,177/-/- for no services, and Arm's Length Price being "Nil", is upheld.”

19. We also note that during the course of proceedings before ld. DRP, reference made to one of the observation of the AO is about the disallowance of the alleged expenses u/s.37 of the Act. Ld. DRP asked the assessee to explain the allowability of the expenditure u/s.37 of the Act to which the assessee made detailed arguments stating that the payments have been made to the AE (SAH) for various services including Cost Allocation method, Cyber security Awareness, Engineering and Maintenance support, Technical Assistance, Ageing analysis etc. However, ld. DRP was not satisfied and observed that the appellant has failed to establish the rendition and receipt of claimed services and the deficiency of fact cannot be made good by support of case laws. Finding of ld. DRP on the disallowance u/s.37(1) of the Act reads as under :

10.5 Factual Finding by the DRP: In the instant case, the assessee has failed to establish the business nexus to own business as well as exact nature services provided by Associated Enterprises and hence the purpose and business connection of the claimed expenditure have not been established. Hence, the Assessing Officer is directed to undertake a disallowance of the claimed payments, which are in order on account of the failure to establish the business nexus, actual incurrence and the services received by the assessee. It is noteworthy that the Ld. TPO has found that the Applicant has not received any benefit/ utility from the claimed Intra Group Services", and thus any such services cannot be held to have been rendered by Associated Enterprise of the applicant, thus, not received by the Applicant. The Panel has upheld the finding. However, apart from the ALP of so-called Intra Group Services Fees being determined as "Nil" by the TPO, the Panel holds that the Assessing Officer is also liable to undertake the alternate disallowance of the payments as failing to fulfil ingredients of section 37.

The Assessing Officer is directed to go through the Paragraphs above and succinctly assess the income accordingly. Needless to mention, there would not be double addition/disallowance of Rs. 5,66,05, 177/-, but the Assessing Officer will provide the additional supporting argument that the sums have not only "Nil" ALP as determined by the Ld. TPO; but also are not eligible for deduction under s.s. 37(1) of the I.T. Act. This is an additional ground raised by the Panel. The Assessing Officer is directed to comply with the additional ground and incorporate the same. 10.6 Direction of the DRP: The Assessing Officer is directed to make disallowance of Rs. 5,66,05,177/- claimed as Intra Group Services payment to Associated Enterprise Semperit Management AG ('SAH') on account of lacking in establishment of "receipt" of services, absence of business nexus and no case of Intra Group Services rendition. The claim of deduction does not pass the factual/legal tests of sub- section 37(1). This is to be taken as a supporting and alternate ground to Ld. TPO's action of setting the ALP of the claims services at "Nil". It is directed that the Assessing Officer is to discuss the above ground in assessment order, and no double addition / disallowance is to be conducted.”

25. Now coming to the second part of the transaction which the assessee has raised in Ground No.5 that ld. DRP erred in upholding the action of the ld. TPO in applying other method inappropriately and further erred by not bringing on record any comparable data as mandated by section 92C r.w. Rule 10B and Rule 10C of the Rule D. Reference to this ground, ld. Counsel for the assessee placed reliance on the decision of Coordinate Bench Mumbai in the case of CLSA India (P) Ltd. VS. DCIT (supra) contending that the issue of determination of ALP is not required to be restored to the ld. TPO because ld. TPO has adopted other method but the other method so adopted by the TPO is not prescribed by the Board. We have gone through the aforesaid decision and notice that in the said decision, the assessee adopted TNM method for calculating the ALP of the Intra Group Services. However, ld. TPO determined the ALP by estimating the man power of services rendered by AE to the assessee and calculated the ALP and this procedure of calculating the ALP was not on basis of any method prescribed u/s.92C(1). It thus indicates that ld. TPO used its option of applying other method and calculated the ALP at its own. However, the facts in the instant case are different so much so that ld. TPO has not made any calculation of ALP but has observed that assessee has not received any Intra Group Services from its AE. The question of calculating the ALP comes after, i.e. first it is to be accepted that Intra Group Services have been received and once they are found to be received, then the payments made for receiving such Intra Group Services needs to be tested as to whether they are at ALP or not. For arriving at such ALP, one of the method prescribed u/s.92C(1) of the Act needs to be applied. Assessee in the instant case had adopted TNM method and has filed TP study report making reference to various comparables in order to strengthen its valid claim of expenditure under the head Intra Group Services. We are therefore of the considered view that the decision referred and relied on by ld. Counsel for the assessee in the case of CLSA India (P) Ltd. VS. DCIT (supra) is not applicable on the facts of the instant case. Further in the preceding paras, we have restored the issue of determination of ALP of the alleged expenditure to the file of ld. TPO for examining the correctness of the ALP calculated by the assessee adopting TNM method. We therefore fail to find any merit in Ground No.5 raised by the assessee and the same is dismissed.

26. Remaining grounds other than those adjudicated above are either consequential or general in nature which needs no adjudication.