Assessee making periodically RBI approved royalty payments to its AE, TPO not justified in determining ALP at Nil

Brief about the case The assessee-company was engaged in the business of manufacture of pre-engineered building system products. During relevant year, assessee entered into international transactions with its AE situated in Kuwait. In course of said transactions, assessee paid royalty to its AE at the rate of 7.5 per cent of sales. The TPO took a view that assessee had not derived any benefit from services rendered by AE requiring payments in question. He thus took ALP of said payments at nil. Accordingly, the TPO made addition to assessee’s ALP in respect of royalty payments made to AE....