M/S. GIVAUDAN (INDIA) PVT. LTD.,,BANGALORE vs. DCIT, BANGALORE

of by way of this common order.

“The grounds mentioned herein are without prejudice to one another.

Transfer Pricing Related 1.That the order of the learned Deputy Commissioner of Income-tax, Large Taxpayer Unit, Bangalore ('AO') and learned Deputy Director of Income-tax (Transfer Pricing) - V ('TPO'), to the extent prejudicial to the Appellant, is bad in law and liable to be quashed. 2.That the learned AO and the learned Dispute Resolution Panel ('Panel') erred in upholding the rejection of the analysis undertaken by the Appellant in it's Transfer Pricing (TP) documentation, by the learned TPO and thereby erred in not appreciating that the Appellant had prepared the TP documentation bona fide and in good faith. 3.That the learned AO and the learned Panel erred both in facts and law in confirming the action of the learned TPO of considering the payment of Rs.1,36,60,049 by the Appellant for the international transaction pertaining to provision of Information Technology (IT) services by the associated enterprises (AEs), as 'Nil", and in doing so grossly erred in:

3.1 Upholding the act of the learned TPO of erroneously applying the Comparable Uncontrollable Price ('CUP') Method.

3.2. Ignoring the details of the IT charges paid by the Appellant to the AEs, during the course of the of the proceedings before the learned Panel, in terms of third party invoices and extracts of other third party companies incurring such similar expenditure on account of IT services, etcetera.

3.3. Erred in considering the quantification of transaction value as 'Nil' for IT services being rendered by the AE. 4.The interest liability under Section 234C and 234D has arisen as a result of the order of the learned AO making an addition as discussed above, leading to an enhanced tax liability. The interest liability would consequentially abate in consideration of our request to set aside the order of the learned AO”.

3. Grounds raised by the assessee for the assessment year 2007- 08 are as under; “The grounds mentioned herein taken by the Appellant are without prejudice to one another. 1.That the order passed by the Learned Commissioner of Income Tax (Appeals) - Large Taxpayers Unit, Bangalore ['CIT (A)-LTU'] is contrary to the facts and circumstances of the case, contrary to law and liable to be quashed. Specific Grounds 2.That the Learned CIT(A)-LTU erred in upholding the rejection of Transfer Pricing CTP') documentation by the learned Transfer Pricing Officer CTPO')/ Assessing Officer CAO') and thereby erred in not appreciating that the Appellant had prepared the TP documentation bona fide and in good faith.

3. That on the facts and in the circumstances of the case, the learned CIT(A)-LTU erred in:

(a) Upholding the act of the learned TPO of erroneously selecting the Comparable Uncontrollable Price CCUP')

Method to be the most appropriate method, as against the Transactional Net Margin Method CTNMM'), adopted by the Appellant at the entity level based on aggregation of transactions

(b) Erred in considering the quantification of transaction value as 'Nil' for IT services being rendered by the Associated Enterprises ('AEs') and that for the benefit accrued to the Appellant on receipt of such services.

(c) Ignoring the details/ documents provided in support of the IT charges paid by the Appellant to the AEs, during the course of the proceedings before the learned CIT(A)- LTU.

Thereby, concluding that the Appellant has not received any services.

4.The interest liability under Section 234B and 234D has arisen as a result of the order of the learned AO making an addition as discussed above, leading to an enhanced tax liability. The interest liability would consequentially abate in consideration of our request to set aside the order of the learned AO.

That the Appellant craves leave to add to and/or to alter, amend, rescind, modify the grounds herein above or produce further documents before or at the time of hearing of this Appeal.

“The grounds mentioned herein taken by the Appellant are without prejudice to one another. 1.That the order passed by the Learned Commissioner of Income Tax (Appeals) -Large Taxpayers Unit, Bangalore ['CIT (A)-LTU'] is contrary to the facts and circumstances of the case, contrary to law and liable to be quashed. 2.That the Learned CIT(A)-LTU erred in upholding the rejection of Transfer Pricing CTP') documentation by the learned Transfer

Pricing Officer CTPO')/ Assessing Officer CAO') and thereby erred in not appreciating that the Appellant had prepared the TP documentation bona fide and in good faith.

(a) Upholding the act of the learned TPO of erroneously selecting the Comparable Uncontrollable Price CCUP') Method to be the most appropriate method, as against the Transactional Net Margin Method CTNMM'), adopted by the Appellant at the entity level based on aggregation of transactions (b) Erred in considering the quantification of transaction value as 'Nil' for IT services being rendered by the Associated Enterprises and that for the benefit accrued to the Appellant on receipt of such services. (c) Ignoring the details/ documents provided in support of the IT charges paid by the Appellant to the AEs, during the course of the proceedings before the learned CIT(A)-LTU.

Thereby, concluding that the Appellant has not received any services. 4.The interest liability under Section 234D has arisen as a result of the order of the learned AO making an addition as discussed above, leading to an enhanced tax liability. The interest liability would consequentially abate in consideration of our request to set aside the order of the learned AO. That the Appellant craves leave to add to and/or to alter, amend, rescind, modify the grounds herein above or produce further documents before or at the time of hearing of this Appeal”

“11. After going through the TP report of the TPO, the submissions made by the assessee, the remand report of the TPO dated 28-06-2010 and the rejoinder of the assessee dated 10-08-2010, that the assessee has not submitted any details regarding quantification of services in terms of actual cost incurred by the AE in connection with rendering of services to the assessee on the basis of third party invoices. Hence, the TPO is justified in taking the arm’s length price for such services t be NIL”.

Order pronounced in the open court on the date mentioned on the caption page.

(ASHA VIJAYARAGHAVAN) (A.K. GARODIA) JUDICAL MEMBER ACCOUNTANT MEMBER Bangalore: D a t e d : .10.2016 am*