Case Law Details
ACIT Vs Volvo Auto (India) Private Limited (ITAT Delhi)
The issue under consideration is whether CIT(A)is correct in deleting the addition made on application of CUP method for determination of ALP of international transactions by the A.O.?
ITAT states that, the AO’s observation that this expenditure has been debited to the profit and loss account to inflate the expenses and thereby reduce the taxable profits in India is not borne out from the facts on record. Further, the claim of management service fee paid by the appellant to its AE has also been examined in the 2 subsequent years and the TPO and AO have not made any adjustment on this account implying thereby that it has been accepted that the appellant had received services from the AE and payment for these services was made at arms length. Keeping in view the aforesaid facts of the case, the AO was not justified in adopting CUP method and determining the ALP of the transaction as NIL and consequently making an adjustment to the income . The adjustment done by the AO on this account is deleted. These grounds of appeal are allowed by CIT(A). Before us, the ld. DR vehemently stated that the issue may be restored to the file of the Assessing Officer, as in his remand report, the Assessing Officer has not made any comment on the cost benefit analysis. ITAT do not find any force in this contention of the ld. DR. In our considered opinion, no second innings should be given to appreciate the same set of facts which were already before the Assessing Officer. Moreover, in the remand report, the Assessing Officer himself has accepted that if the management fees had not been paid by the appellant, the true up adjustment received would have been Rs. 2.51 crores only and profits of the appellant would have been less than the profits returned. The cost benefit analysis was furnished by the assessee during the remand proceedings but the Assessing Officer did not care to examine the same and now the ld. DR is asking for remand. But the ld. DR could not point out any factual defect in the findings of the first appellate authority. Considering the facts of the case in totality, in light of remand report and factual findings of the ld. CIT(A), and considering the treatment given in subsequent A.Y by the Transfer Pricing Officers, ITAT do not find any reason to interfere with the findings of the ld. CIT(A). In the result, the appeal of the Revenue is dismissed.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the Revenue is preferred against the order of the CIT(A) – 2, Gurgaon dated 31.03.2016 pertaining to assessment year 2010-11.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
