Siemens Aktiengesellschaft Vs ACIT (International Tax) (ITAT Mumbai)
ITAT Mumbai held that in absence of any contrary inference by Transfer Pricing Officer [TPO] in the TP analysis, ad hoc disallowance cannot be restored towards the international transaction of technical service and other transaction. Accordingly, appeal allowed.
Facts- AO noted that the assessee is a non-resident and that the assessee had derived income of Royalty for technical knowhow Fee for Technical assistance under various agreements from Indian AE. Accordingly, reference was made to the transfer pricing officer for determining the ALP of the transactions.
TPO dissatisfied with the documentation maintained by the assessee, made ad hoc adjustment towards the international transaction of technical service and other transaction at 10% in the hands of the assessee. Thereafter, AO passed the impugned order making additions in the hands of the assessee as confirmed by the DRP. Being aggrieved, the present appeal is filed.
Conclusion- Held that the facts that led to the adjustment in the present assessment years are identical with assessment year 2009-10. Notably, this Tribunal for 2009-10 has held that in absence of any contrary inference drawn by the Id. TPO on the TP study report of the assessee and at the same time in the case of Indian AE, same transaction has been benchmarked and ALP has been determined then we do not find any reason for taking adhoc 10% mark-up. Accordingly, the same is deleted. Thus, respectfully following the decision of the Co-ordinate Bench, for assessment year 2009-10, without there being any defect identified by TPO in the TP analysis, we are of the opinion that adhoc disallowance cannot be resorted to.
