Case Law Details
PPG Coatings India Pvt. Ltd. Vs DCIT (ITAT Mumbai)
It was submitted that SAP license was purchased by the AE at Netherland in bulk quantities. A copy of the agreement entered into between the said AE and the third party along with the copy of the debit note raised by the AE was submitted. It was submitted that purchase of SAP license by the AE was to avail volume discounts. Out of the bulk purchase of SAP license made by the AE, the assessee was allotted 11 SAP professional licenses and one employee user license. It was submitted that the said transaction was benchmarked under Comparable Uncontrolled Price [CUP] method, since the cost of the third party licenses have been allocated based on the number of users. Comparative details of allocation of SAP license cost charged to the assessee with a comparison with the SAP price list was also submitted.
We have gone through the same and we find ourselves in agreements with the submissions of the Ld. Counsel of the assessee that requisite details were submitted and authorities below have failed to consider the same and have held that proper details were not submitted after having held that there was no benefit to the assessee from the said license. For all these reasons as discussed above, we set aside the orders of the authorities below and decide the issue in favour of the assessee.
As regards the issue of cost sharing, the observations of the authorities below that the details have not been submitted is similar to the one on the issue of documentation of SAP discussed as above. Our observation as above is applicable here also. We are in agreement the details were in fact submitted and authorities below have erred in ignoring the same. In this regard, the submissions before the AO/TPO summarized as under:-
It was submitted that assessee has availed following services from the AE under the cost sharing expenses:
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