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6. That the DRP/TPO erred on facts and in law in determining the arm's length price of international transaction or payment of model fee of Rs.

30,77,53,454 at NIL, allegedly on the following grounds -

a. The appellant is equally responsible for the technology upgradation that is taking place in India;

b. The appellant pays model fee and royalty for the same set of service;

7. That the DRP/TPO erred on facts and in law in holding that the appellant was engaged in undertaking R&D activity for development of new models.

4. As regards to Payment of Model Fee, the Transfer Pricing Officer (TPO) determined the arm's length price of international transaction of payment of model fee at Nil holding as under:

a) The assessee is equally responsible for the technology upgradation that is taking place in India;

b) The assessee pays model fee and royalty for the same set of service The DRP confirmed the aforesaid adjustments made by the TPO.

5. The Ld. AR submitted that the adjustment made by the TPO is bad in law and is liable to be deleted. The TPO observed that the payment of model fee has been made in terms of License and Technical Assistance Agreement (approved by the Government) in consideration of license to manufacture 'Products' and using technical know-how a provided by the associated enterprises during the currency of the agreement. The TPO further held that the payment of model fee, therefore, it would be appreciated, is a consideration in terms of agreement with the associated enterprises for availing license to use their proprietary technology. In other words, the payment of model fee is necessary cost incurred for obtaining knowhow for manufacture of products by the assessee. The Ld. AR submitted that while implementing the Transfer Pricing regulations, it would not be appropriate for the Indian tax administration to deny payment of rightful consideration to a non resident related party (AE) pursuant to a bonafide agreement for use of their proprietary technology by the for manufacture of finished products in India. Therefore, the Ld. AR submitted that payment of royalty is made in consideration for right to manufacture products and using the technical knowhow owned by the associated enterprises. The Ld. AR submitted that the Tribunal, following the order of the Coordinate benches, the aforesaid issues have been decided in favour of the assessee by the consolidated order dated 24.10.2016 passed by the Delhi Bench of the Tribunal in assessee's own case for assessment year 2010-11 and 2011-12 following assessee's own case for the assessment year 2006- 07, 2007-08 and 2008-09 deleted the aforesaid addition. Further, the Ld. AR submitted that the Hon'ble High court upheld the order of the Tribunal for AY 2006-07 (ITA No. ITA 923/2015) deleting the adjustment on account of payment of model fee. While deciding the appeal for the assessment year 2012- 13, the Tribunal decided the issue following the orders for assessment year 2010-11 and 2011-12 wherein the Tribunal, following the orders for the assessment years 2006-07, 2007-08 and 2008-09 had deleted similar transfer pricing adjustment made in those years.