Roquette India Pvt. Ltd. Vs A/DCIT (ITAT Ahmedabad)
The assessee, a wholly owned subsidiary of a French company, was engaged in the manufacture of starch derivatives, glucose, maltodextrins, and related products in India. For Assessment Years 2017-18 and 2018-19, the Transfer Pricing Officer (TPO) proposed adjustments by determining the Arm’s Length Price (ALP) of intra-group services received from Associated Enterprises (AEs) at NIL. The disputed services comprised Central Corporate and Area (CCA) services, Global Business Unit (GBU) services, and Information Technology (IT) services. The aggregate adjustment amounted to ₹24.37 crore for AY 2017-18 and ₹25.32 crore for AY 2018-19. The Dispute Resolution Panel (DRP) upheld the transfer pricing adjustments, leading to the final assessment orders.
The assessee contended that detailed agreements had been executed for the services and that contemporaneous documentation was maintained. It submitted extensive evidence including service agreements, email communications, presentations, allocation keys, cost allocation certificates, and independent audit certificates to demonstrate the actual receipt and utilization of services in its business operations. According to the assessee, the TPO erred in determining the ALP at NIL by questioning the benefit derived from the services and by disregarding the evidence furnished.
The Revenue argued that the assessee had failed to demonstrate tangible benefits from the services and that the evidence produced was general in nature. It was further contended that some agreements suffered from deficiencies such as retrospective operation, absence of registration or stamping in certain cases, and lack of independent corroborative evidence, thereby reducing their evidentiary value.
