NTT India Private Limited Vs DCIT (ITAT Mumbai)
The appeal concerned Assessment Year 2020-21 and challenged various additions made in the assessment order passed under Sections 144C(13) and 144B pursuant to directions issued by the Dispute Resolution Panel (DRP). The principal dispute related to transfer pricing adjustments on account of management fees paid to an associated enterprise (AE).
The assessee was engaged in trading networking products and providing related services including training, maintenance, installation, consultancy, facility management, outsourcing, and systems integration in the field of information communication systems and computer networking. During the relevant year, the assessee paid management fees of approximately ₹166.32 crore to its AE, NTT Asia Pacific Holdings Pte. Ltd., for services relating to business development, corporate communication, brand management, human resources, information technology, finance, and other functions. The Transfer Pricing Officer (TPO) proposed a transfer pricing adjustment of ₹151.57 crore, which was upheld by the DRP.
The assessee contended that the issue was identical to disputes raised in its own cases for earlier assessment years. It submitted that similar transfer pricing adjustments had been deleted by the Tribunal in Assessment Year 2011-12 and subsequently followed in Assessment Years 2017-18 and 2018-19. The assessee also argued that it had benchmarked the transaction under the Transactional Net Margin Method (TNMM) at the entity level and had furnished extensive evidence supporting the services received from the AE. The assessee further pointed out that it had submitted sample third-party invoices relating to services procured by the AE and allocated to group entities, and that a portion of such costs had already been accepted by the TPO.
