Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI N. V. VASUDEVAN & SHRI D. S. SUDNER SINGH
Per N. V. Vasudevan, Vice President:
This is an appeal by the Assessee against the final order of Assessment dated 19.10.2012 passed u/s.143(3) read with Sec.144C(13) of the Income Tax Act, 1961 (Act) by the ACIT, Circle 12(3). Bangalore, relating to AY 2008-09.
The grounds of appeal raised by the Assessee reads as follows:
I. Transfer Pricing Grounds The learned Assessing Officer ("AO"), the learned Assistant Commissioner of Income Tax (Transfer Pricing Officer — VI), Bangalore ("Transfer Pricing officer" or "TPO") and the Honorable Dispute Resolution Panel "DRP" have erred in law and facts of the case in proposing a transfer pricing adjustment under section 92CA
IT(TP)A No.1666/Bang/2012 Page 2 of 48 of the Income-tax Act, 1961 ("the Act") amounting to INR 46,452,221 on account of intra-group service payments and INR 53,290,274 with respect to the software services rendered to the associated enterprises, totaling to an income adjustment of INR 99,742,495 for the year. Intra-group service payments 1. The learned TPO/ AO erred in considering the arm's length price to be "Nil" for the following payments made by Safran Engineering Services India Private Limited to its associated enterprise: - towards dedicated program manager for the benefit of Safran Engineering Services India Private Limited - INR 8,106,958 - towards information technology services — INR 5,347,042 - towards cost of support services and the cost of deputed managing director provided by associated enterprise — INR 32,998,221 2. The learned TPO/ AO erred in not accepting the arm's length justification of the above mentioned payments using the Transactional Net Margin method.
The learned TPO/ AO erred in selecting Comparable Uncontrolled Price Method ("CUP") as the most appropriate method for justifying the payments made by Safran Engineering Services India Private Limited towards the dedicated program manager, payment of information technology services, towards salary cost of deputed managing director and towards the management services provided by the. associated enterprise for the benefit of Safran Engineering Services India Private Limited.
The learned TPO/ AO erred in not appreciating Safran Engineering Services India Private Limited has made the above mentioned payments to the Associated Enterprises following the principles of arm's length standard only to recover the same from the Associated Enterprises for the software services rendered, where the latter has been justified to be at arm's length in the Transfer Pricing ("TP") Documentation.
The learned TPO/ AO erred in not appreciating the documentary proof submitted in relation to the recovery of the above payments made by Safran Engineering Services India Private Limited from the Associated Enterprises by way of billings made for the services rendered.