Delhi High Court - Orders
The Commissioner Of Income Tax - ... vs A.T. Kearney Ltd on 21 March, 2024
Author: Yashwant Varma
Bench: Yashwant Varma, Purushaindra Kumar Kaurav
$~31 & 32
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 159/2023
THE COMMISSIONER OF INCOME TAX -
INTERNATIONAL TAXATION -1 ..... Appellant
Through: Mr. Ruchir Bhatia, SSC with
Ms. Deeksha Gupta, Adv.
versus
A.T. KEARNEY LTD. ..... Respondent
Through: Mr. Ajay Vohra, Sr. Adv. with
Mr. Samarth Chaudhari, Adv.
32
+ ITA 160/2023
THE COMMISSIONER OF INCOME TAX -
INTERNATIONAL TAXATION -1 ..... Appellant
Through: Mr. Ruchir Bhatia, SSC with
Ms. Deeksha Gupta, Adv.
versus
A.T. KEARNEY LTD. ..... Respondent
Through: Mr. Ajay Vohra, Sr. Adv. with
Mr. Samarth Chaudhari, Adv.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR
KAURAV
ORDER
% 21.03.2024
1. We take note of the contention of Mr. Bhatia, learned counsel appearing for the appellants, who draws our attention to the following extracts from the order of the Transfer Pricing Officer ["TPO"]:
" Moreover, it is seen from the details contained in the transfer This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/03/2024 at 20:31:28 pricing report of the assessee submitted under Rule 10D that the assessee had not conducted FAR analysis in regard to these alleged services and had failed to justify the functions performed by the AE for these payments. This is probably a reason that the receipt of alleged services have not been benchmarked under any of the five method prescribed under the Act in the Transfer Pricing Officer.
Furthermore, the assessee has at the time of requisitioning the so- called services, not carried out any cost- benefit analysis at its end. No independent party would agree to incur expenditure without independently ascertaining the value of the goods/ services intended to be availed, in the market and that too at the best negotiated prices. No such effort has been demonstrated to be made at the end of the assessee, which weighs heavily against the normal practises of business prudence."
2. It is in the aforesaid backdrop that Mr. Bhatia contends that benchmarking in respect of Inter Group Services was not undertaken.
3. The aforesaid submission is vehemently opposed by Mr. Vohra, learned senior counsel appearing for the respondent/ assessee, who draws our attention to the following extracts from the order passed by the Commissioner of Income Tax (Appeals) ["CIT(A)"]:
"4. That the learned AO/TPO have inappropriately rejected the Transactional Net Margin Method ("TNMM") used by the Appellant and erroneously applied Comparable Uncontrolled Price ("CUP") method to determine the arm's length price of the international transactions related to availing of intra group services, without appreciating the fact that intra-group services availed were proprietary in nature and no uncontrolled data was available for the application of CUP method.
5. That the learned AO/TPO have erred, in law and on facts, in concluding that the Appellant has derived no benefits from the intra-group services availed from the associated enterprises and arbitrarily determining the arm's length price of said international transaction as Nil as against the actual transaction value of Rs. 5,32,51,014/-."
4. However, in order to cut short the controversy which stands raised, we request the respondent to place the Transfer Pricing Report on the record. Let the aforesaid be done within a period of three weeks This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/03/2024 at 20:31:28 from today.
5. Let the appeals be called again on 11.07.2024.
YASHWANT VARMA, J.
PURUSHAINDRA KUMAR KAURAV, J.
MARCH 21, 2024/kk This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/03/2024 at 20:31:28