TP Adjustment: Payment made for management related activities under CSA- ITAT remanded the issue back to AO

Atotech India Pvt. Ltd. Vs DCIT (ITAT Delhi)

TP Adjustment: Payment made for management related activities under CSA- ITAT remanded the issue back to AO

We find that the only controversy involved in all the assessee’s appeals is with regard to payment made for management related activities under CSA which has been taken at ‘Nil’ by the TPO. This adjustment is a recurring issue in assessee’s own case right from the Assessment Years 2007-08, 2009-10 and Assessment Year 2012-13. The Tribunal has remanded this issue to the file of the Assessing Officer with certain directions. The relevant findings and observations of the Tribunal in the appeal for the Assessment Year 2012-13 is reproduced hereunder:

“Here, again, both the sides agree that the facts and circumstances of this appeal are similar to those of preceding years dealt with above except that in this year the TPO, apart from determining Nil ALP of the international transaction of payment of ‘Management group cost’, also recommended transfer pricing adjustment in respect of ‘R&D assistance ITA Nos.3419 & 6571/Del/2016 & 1112/Del/2014 15 cost.’ The Tribunal has passed an order for the immediately preceding year restoring the fresh determination of the ALP of `R&D assistance cost’ and `Management group cost’ to the file of the AO/TPO. Following the view taken in such an order of the immediately preceding year and the two earlier years dealt with hereinabove, we set aside the impugned order and remit the matter to the file of Assessing Officer/TPO for a fresh determination of the ALP of the international transaction of ‘Management group cost’ and ‘R&D assistance cost’ in accordance with the observations made in our detailed order for the assessment year 2008-09 above.”

Thus, in the same lines, we direct the TPO to carry out fresh analysis and determine the Arm’s Length Price and the payments relating to other R&D task and decide the issue fresh in accordance with law.

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