FCB ADVERTISING P. LTD, MUMBAI V. ASST CIT CIR 3(1)(2), MUMBAI

ITA 2194/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2357 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 29-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS LD
• Assessee Lawyers: SIDDHESH CHAUGULE LD ARS
• Keywords: Transfer pricing; International transaction; Rule of consistency; Wholly owned subsidiary; Arm length price; Commercial expediency; Onus to prove
• Section: 92C; 143(3)

Judgement Text

IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI BEFORE HONBLE SHRI SAKTIJIT DEY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T(TP).A. NO. 2194/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) FCB ULKA ADVERTISING P VT . LTD (EARLIER KNOWN AS DRAFT FCB ULKA ADVERTISING P. LTD.) 4 TH FLOOR, NIRMAL, NARIMAN POINT MUMBAI 400 021 / VS. ASS IS TAN T COMMISSIONER OF INCOME TAX-CIRCLE 3(1)(2) R.NO.607, AAYKAR BHAWAN M.K.ROAD, MUMBAI 400020. ./ ./PAN/GIR NO. AABCU-0566-E ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : MR. AJIT KUMAR JAIN & MR. SIDDHESH CHAUGULE, LD. ARS REVENUE BY : MR. RIGNESH DAS, LD. DR # $% / DATE OF HEARING : 03/05/2019 # $% / DATE OF PRONOUNCEMENT : 25/06/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2012-13 CONTEST FINAL ASSESSMENT ORDER DATED 31/01/2017 PASSED BY LD. ASSISTANT COMMISSIONER OF INCOME TAX-CIRCLE 3(1)(2) , MUMBAI U/S 143(3) READ WITH SECTION 144C(13) PURSUANT TO THE DIRECTIONS OF LD. IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 2 DISPUTE RESOLUTION PANEL-1 (WZ), MUMBAI [DRP] U/S 144C(5) DATED 01/12/2016. THE GROUNDS RAISED BY THE ASSESSEE READ S AS UNDER: - TRANSFER PRICING GROUNDS 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. TRANSFER PRICING OFFICER (TPO) AND THE LD. ASSESSING OFFI CER (AO') UNDER THE DIRECTIONS OF THE HONBLE DISPUTE RESOLUTION PANEL (DRP') ERRED IN DETERMINING THE ALP OF MULTINATIONAL CLIENT CO-ORDINATION SERVICE, SUPPORT SERVICES AND GLOBAL INFRASTRUCTURE SUPPORT SERVICE AS NIL THUS MAKING AN ADJUSTMENT OF RS. 9,82,97,079/- UNDER CHAPTER X OF THE INCOME-TAX ACT, 1961 (THE ACT). 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. TPO, THE ASSESSING OFFICER AND THE HONBLE LD. DISPUTE RESOLUTION PANE L HAVE EXCEEDED THEIR JURISDICTION BY COMPUTING THE TRANSFER PRICING ADDI TION WITHOUT APPLYING ANY PRESCRIBED METHODS AND THUS THEIR ORDERS ON THIS IS SUE ARE BAD IN LAW. 3. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. TPO AND THE AO, UNDER THE DIRECTIONS OF THE HONBLE DRP HAVE ERRED IN NOT APPRECIATING THE FACTUAL DETAILS, SUBMISSIONS AND VARIOUS DOCUMENTARY EVIDENCES WHICH DEMONSTRATE RECEIPT OF SERVICES BY THE APPELLANT. 4. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. TPO AND THE ASSESSING OFFICER, UNDER THE DIRECTIONS OF THE HONBLE LD. DI SPUTE RESOLUTION PANEL HAVE ERRED IN NOT APPRECIATING THAT PAYMENT FOR THESE SERVICES IS BASED ON ALLOCATION OF COSTS ON AN ARMS LENGTH BASIS, AND APPLICATION OF A MARK-UP THAT HAS BEEN BENCHMARKED ON AN ARMS LENGTH BASIS. 5. WITHOUT PREJUDICE TO THE ABOVE ON FACTS AND CIRC UMSTANCES OF THE CASE AND IN LAW, THE LD. TPO AND THE AO, UNDER THE DIRECTIONS OF THE HONBLE LD. DISPUTE RESOLUTION PANEL HAVE ERRED IN REJECTING THE TRANSACTION NET M ARGIN METHOD (TNMM) METHOD, AS THE MOST APPROPRIATE METHOD FOR BENCHMARKING THE PAYMENT FOR THESE SERVICES. 6. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. TPO, THE A.O AND THE HONBLE LD. DISPUTE RESOLUTION PANEL HAVE EXCEEDED THEIR JURISDICTION BY MAKING AN AD-HOC DISALLOWANCE OF PAYMENT MADE FOR THESE SERVI CES BY CHALLENGING THE COMMERCIAL WISDOM AND EXPEDIENCY OF THE APPELLANT. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. TPO AND THE LD. ASSESSING OFFICER UNDER THE DIRECTIONS OF THE H ONBLE LD. DISPUTE RESOLUTION PANEL ERRED IN NOT FOLLOWING THE PRINCIPLE OF CONSI STENCY FOR BENCHMARKING PAYMENT FOR THESE SERVICES, MORE SO CONSIDERING THAT THERE IS NO CHANGE IN FACTS AS COMPARED TO THE PREVIOUS YEARS. CORPORATE TAX GROUNDS 8. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. ASSESSING OFFICER ERRED IN HOLDING THAT AMOUNT DISALLOWED BY THE APPELLANT UNDER SECTION 40(A)(I) OF RS.5,34,49,483/- WOULD NOT BE ALLOWED AS AN EXPENSE IN THE YEAR IN WHICH TAX IS DEDUCTED AND PAID WITH RESPECT TO IT. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. ASSESSING OFFICER ERRED IN COMPUTING INTEREST UNDER SECTION 2 34B AND 234C OF THE ACT. THE INCOME OF THE ASSESSEE, IN THE FINAL ASSESSMENT ORDER, WAS DETERMINED AT RS.5147.36 LACS AFTER CERTAIN DISALLO WANCES AND TRANSFER PRICING (TP) ADJUSTMENT AS AGAINST RETURNED INCOME OF RS.4679.87 LACS FILED BY THE ASSESSEE ON 29/11/2012. IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 3 2.1 THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE WAS STATED TO BE ENGAGED IN THE BUSINESS OF ADVERTISING AGENCY. THE ASSESSEE COMPANY PROVIDES SEVERAL SERVICES TO ITS CLIENTS / CUSTOMER S WITH THE ULTIMATE OBJECTIVE OF DEVELOPING AN EFFECTIVE AND STRATEGIC COMMUNICATION AIMED AT THE CUSTOMERS, BOTH CURRENT AND POTENTIAL TO GEN ERATE, SUSTAIN AND INCREASE DEMAND FOR CLIENTS PRODUCTS. THESE ADVERT ISING MESSAGES ARE SAID TO BE DELIVERED THROUGH VARIOUS MEDIA LIKE NEW SPAPERS, MAGAZINES, HOARDING AND OTHER OUTDOOR SITES LIKE CINEMA, TELEV ISION COMMERCIALS OVER NUMEROUS CHANNELS, RADIO, WEB-SITES, EVENT SPO NSORSHIPS ETC. 2.2 THE ASSESSEE WAS INCORPORATED AS PRIVATE LIMITE D COMPANY AND STATED TO BE ENGAGED IN THE BUSINESS OF ADVERTISING AND MARKETING COMMUNICATIONS. IT ASSISTS ITS CLIENTS BY CONCEPTUA LIZING AND PRODUCING THE ADVERTISEMENTS THAT CONSUMERS ARE EXPOSED TO VI A TV, RADIO, NEWSPAPERS, MAGAZINES ETC. IT ALSO HELPS CLIENTS TO STRATEGIZE THEIR MARKET APPEAL AND BRAND THEMSELVES WITH TARGETED AU DIENCES. THE ASSESSEE IS STATED TO BE A WHOLLY OWNED SUBSIDIARY OF ADVERTISEMENT AND COMMUNICATION SERVICES (MAURITIUS) LIMITED. INT ERPUBLIC GROUP OF COMPANIES (IPG) IS THE ULTIMATE HOLDING COMPANY OF THE GROUP. THE DETERMINATION OF ARM LENGTH PRICE OF THE FOLLOWING TRANSACTION AS REPORTED IN FORM 3CEB IS THE SOLE SUBJECT MATTER OF DISPUTE BEFORE US: - NO . NA TURE OF INTERNATIONAL TRANSACTION AMOUNT (RS.) MO ST APPROPRIATE METHOD 1. AVAILING OF MARKETING SERVICES AND GLOBAL INFRASTRUCTURE SUPPORT SERVICES 9,82,97,079/- TNMM THE SAID SERVICES ARE HEREINAFTER REFERRED TO AS IN TRA-GROUP SERVICES [IGS]. IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 4 2.3 THE INTERNATIONAL TRANSACTIONS CARRIED OUT BY T HE ASSESSEE WITH ITS ASSOCIATED ENTERPRISES [AE] AS REPORTED BY THE ASSE SSEE IN FORM 3CEB WERE REFERRED TO LD. TRANSFER PRICING OFFICER-2(1)( 2), MUMBAI [TPO] U/S 92CA (1) FOR DETERMINATION OF ARMS LENGTH PRICE (A LP). 2.4 THE ASSESSEE, IN ITS TRANSFER PRICING REPORT, A GGREGATED ALL THE INTERNATIONAL TRANSACTIONS (EXCLUDING BUY-BACK OF S HARES) FOR THE PURPOSE OF BENCHMARKING ANALYSIS. BASED ON FUNCTIONAL ANALY SIS AND AVAILABLE DATA OF COMPARABLE COMPANIES, THE ASSESSEE CONSIDER ED TRANSACTIONAL NET MARGIN METHOD [TNMM] AS MOST APPROPRIATE METHOD [MAM] USING NET COST-PLUS MARKUP [NCP] AS THE PROFIT LEVEL INDI CATOR [PLI], THE ASSESSEE BEING THE TESTED PARTY. THE MEAN NCP OF TH E COMPARABLE ENTITIES, BASED ON THREE-YEAR DATA, WAS WORKED OUT TO BE 7.84% AS AGAINST ASSESSEES NCP MARK-UP OF 39.51% AND THEREF ORE, NO TP ADJUSTMENT WAS PROPOSED. 2.5 THE ASSESSEE, FOR INTRA-GROUP SERVICES AVAILED, UNDERTOOK SEPARATE BENCHMARKING ANALYSIS CONSIDERING THE OVERSEAS AE A S THE TESTED PARTY AND CONDUCTED AN OVERSEAS SEARCH WITH TNMM AS MOST APPROPRIATE METHOD USING NET COST PLUS AS THE PROFIT LEVEL INDI CATOR. THE MEAN MARGIN OF COMPARABLE ENTITIES WAS COMPUTED AS 6.47% AS AGAINST MARK UP OF 5% PAID BY THE ASSESSEE TO ITS AE AND THEREFO RE, NO TP ADJUSTMENT WAS PROPOSED FROM THIS ANGLE ALSO. 2.6 DURING PROCEEDINGS BEFORE LD. TPO, THE ASSESSEE SUBMITTED VARIOUS DOCUMENTS / EVIDENCES IN SUPPORT OF SERVICE S RECEIVED, BENEFITS DERIVED & BASIS OF COST ALLOCATION OF INTRA-GROUP S ERVICES. THE ASSESSEE HAD ALSO FILED COST ALLOCATION KEYS AND FILED THE C ERTIFICATION FROM AN INDEPENDENT ACCOUNTANT IN SUPPORT OF THE SAME. IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 5 PROCEEDINGS BEFORE LD. TPO 2.7 FACTS AS NOTED BY LD. TPO ARE THAT DRAFT FCB WORLDWIDE PROVIDES VARIED SERVICES TO GROUP OF COMPANIES INCLUDING THE ASSESSEE WHICH ARE IN THE NATURE OF FOSTERING AND DEVELOPING CREATIVIT Y, NEW BUSINESS TARGETING, PUBLIC RELATIONS, STRATEGIC PLANNING, ME DIA SUPPORT, FINANCIAL ADMINISTRATION, HUMAN RESOURCE MANAGEMENT AND BUSIN ESS SERVICES ETC. COST INCURRED FOR PROVISION OF SUCH SERVICES IS ALL OCATED TO ALL THE GROUP COMPANIES BASED ON THE PROPORTION OF REVENUE OF THE SERVICE RECIPIENT ALONG WITH A MARKUP OF 5%. IN ADDITION, UNDER GLOBAL INFRASTRUCTURE SUPPORT SERVICES (GIS) AGREEMENT , AE PROVIDES VARIOUS SERVICES LIKE INFRASTRUCTURE SERVICES, APPLICATION SERVICES, PROC UREMENT SERVICES AND OTHER IT ASSISTANCE TO ALL GROUP COMPANIES INCLUDIN G THE ASSESSEE. THE COST OF SERVICES UNDER GIS AGREEMENT IS ALLOCATED B ASED ON THE NUMBER OF USERS, LICENSE ETC. AE IS COMPENSATED ON A COST- PLUS A STANDARD MARK UP FOR PROVIDING GIS SERVICES. 2.8 DURING PROCEEDINGS BEFORE LD. TPO, THE ASSESSEE WAS ASKED TO DEMONSTRATE THE FULFILLMENT OF BENEFIT TEST AGAINST THESE PAYMENTS. ALTHOUGH, THE ASSESSEE FILED VARIOUS SUBMISSIONS TO DEMONSTRATE THE SAME, HOWEVER, LD. TPO, IN TERMS OF PROVISIONS OF S ECTION 92F(II), FORMED AN OPINION THAT THE TAXPAYER HAD TO PROVE TH AT THE SERVICES WERE ACTUALLY RECEIVED / AVAILED AND THE APPLICATION OF THE ALP WOULD BE TO SEE WHETHER THE CHARGES PAID BY THE ASSESSEE FOR IN TRA-GROUP SERVICES REFLECT THE SAME CHARGES THAT WOULD HAVE BEEN, OR W OULD REASONABLY BE EXPECTED TO BE, LEVIED BETWEEN INDEPENDENT PARTIES, DEALING AT ARMS LENGTH FOR COMPARABLE SERVICES UNDER COMPARABLE CIR CUMSTANCES. FURTHER, THE QUANTIFICATION OF SUCH SERVICES IN TER MS OF COMMENSURATE IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 6 BENEFITS RECEIVED AND ALP OF SUCH SERVICE WAS REQUI RED TO BE DEMONSTRATED. THEREFORE, THE PAYMENT FOR INTRA-GROU P SERVICES WOULD BE TREATED AT ALP ONLY WHEN IT IS PROVED THAT SUCH SER VICES WERE ACTUALLY AVAILED BY THE ASSESSEE AND THE ASSESSEE RECEIVED C ERTAIN BENEFIT BY AVAILING OF SUCH SERVICES. 2.9 IN DEFENSE, THE ASSESSEE SUBMITTED THAT VARIOUS INTRA-GROUP SERVICES WERE ACTUALLY AVAILED AND BENEFITS WERE RE CEIVED BY AVAILING THOSE SERVICES. THE SUBMISSIONS OF THE ASSESSEE AS WELL AS THE COMMENTS OF LD. TPO HAVE BEEN TABULATED AT PARA 7 OF LD. TPOS ORDER WHEREIN LD. TPO HAS, INTER-ALIA, OBSERVED THAT THE ASSESSEE HAD REQUISITE KNOWLEDGE, EXPERTISE, CAPACITY & COMPETEN CY TO PERFORM SOME SERVICES. THESE SERVICES COULD HAVE BEEN AVAILED FR OM INDEPENDENT CONSULTANT IN INDIAN MARKET. FEW SERVICES WERE TERM ED AS STEVEDORING / HEADQUARTER FUNCTIONS. FINALLY, NOT CONVINCED, LD. TPO OPINED THAT THE ASSESSEE FAILED TO DEMONSTRATE RENDERING OF ANY SER VICES AND THE NATURE OF SERVICES WERE GENERAL CORRESPONDENCES BETWEEN TH E ASSESSEE AND ITS AE. THE MATERIAL WOULD NOT DEMONSTRATE RENDERING OF ANY SPECIFIC SERVICES AND IT COULD NOT BE CONSIDERED AS SERVICES RENDERED FOR WHICH ANY ENTITY ACTING ON ARMS LENGTH BASIS WOULD AGREE TO MAKE ANY PAYMENTS. FURTHER, THE ASSESSEE FAILED TO DEMONSTRA TE THE BENEFITS AND NO PRUDENT BUSINESSMEN WOULD LIKE TO MAKE THOSE PAY MENTS WHERE SUCH SERVICES COULD BE OBTAINED FROM OTHER PARTIES AT A LOWER COST. IT WAS ALSO OBSERVED THAT THE QUANTUM OF CHARGES, OVER THE YEAR S, HAVE INCREASED WITH NO CONSEQUENTIAL BENEFIT TO THE PROFITABILITY OF THE ASSESSEE. 2.10 THE RELEVANT OBSERVATIONS OF LD. TPO, FOR READ Y REFERENCE, COULD BE EXTRACTED IN THE FOLLOWING MANNER: - IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 7 8. THE VARIOUS EVIDENCES/DOCUMENTS/PRESENTATIONS PR ODUCED DO NOT DEMONSTRATE THE RENDERING OF ANY SERVICE BY THE AE TO THE ASSES SEE FOR WHICH ANY PAYMENT WOULD BE MADE BY AN INDEPENDENT PARTY IN AN ARM'S-L ENGTH SCENARIO. THE NATURE OF SERVICES AS CLAIMED BY THESE DOCUMENTS REVEAL THAT THEY ARE GENERAL CORRESPONDENCES BETWEEN THE ASSESSEE AND ITS AE. ON PERUSAL OF THE CONTENTS OF THESE DOCUMENTS, IT IS CLEAR THAT THESE ARE GENERAL NOTES AND EXCHANGE OF INFORMATION. THE NATURE OF COMMUNICATION IN THESE D OCUMENTS IS OF THE NATURE WHICH WOULD BE ENTERED INTO BETWEEN THE GROUP ENTITIES OF ANY GROUP. THEY ARE NOT OF THE NATURE TO SHOW ANY SPECIFIC SERVICES RENDERED BY TH E AE, FOR WHICH ANY SEPARATE CHARGE NEEDS TO BE PAID BY THE ASSESSEE TO ITS AE. IN FACT, IF ONE CLOSELY OBSERVES THE NATURE OF SERVICES FROM THE DOCUMENTS PRODUCED, IT IS CLEAR THAT THE PURPORTED SERVICES FOR WHICH PAYMENT IS CLAIMED ARE IN THE NA TURE OF SHAREHOLDER/DUPLICATIVE/INCIDENTAL SERVICES ONLY. I N OTHER WORDS, ON PERUSAL OF THESE DOCUMENTS IT IS CLEAR THAT IT CANNOT BE CONSIDERED AS SERVICES RENDERED FOR WHICH ENTITY ACTING ON ARM'S-LENGTH BASIS, WOULD AGREE TO MAKE ANY PAYMENT. FURTHER, THE DETAILS PLACED ON RECORD ARE GENERAL COMMENTS WHICH DO NOT DEMONSTRATE ANY SPECIFIC BENEFIT RECEIVED BY IT FROM THE SERVICES R ENDERED FOR WHICH THE PAYMENT IS CLAIMED. 9. MOREOVER THE COST INCURRED BY THE HOLDING COMPAN Y FOR THAT AND THE BENEFIT FOR WHICH SUCH COST WAS INCURRED, HAS NOT BEEN PROVED B Y THE ASSESSEE. NO PRUDENT BUSINESSMAN WOULD LIKE TO CURTAIL ON PAYMENT OF SUC H HIGH MANAGEMENT SERVICE BY LOOKING FOR AVENUES WHERE SUCH SERVICES COULD BE OB TAINED FROM OTHER PARTIES AT A LOWER COST IN A CUT THROAT COMPETITIVE WORLD. NOT A SINGLE INSTANCE OF SERVICE RENDERED HAS BEEN SUBMITTED BY THE ASSESSEE. NO INS TANCE OF SERVICE RECEIVED FROM HOLDING COMPANY WHICH IF NOT WOULD HAVE BEEN RECEIV ED FROM THE HOLDING COMPANY WOULD HAVE TO BE ACQUIRED BY THE ASSESSES FROM THE MARKET HAS BEEN CLAIMED. NO EVIDENCE HAS BEEN PRODUCED BY THE ASSESSEE TO SHOW THAT ANY SPECIFIC PERSON OR PERSONS WERE DEVOTING TIME OR EFFORTS TO ASSIST THE ASSESSEE IN ITS OPERATIONS. IT IS ALSO SEEN THAT THE ASSESSEE'S MANAGEMENT CHARGES TO ITS AE HAVE INCREASED OVER YEARS WITH NO CONSEQUENT BENEFITS TO THE PROFITABIL ITY OF THE ASSESSEE. THE ASSESSEE HAS ALSO NOT DEMONSTRATED THAT THE PRICE PAID WAS S UCH THAT AN INDEPENDENT ENTITY WOULD HAVE PAID FOR SUCH SERVICES FOR THE BENEFITS (IF ANY) RECEIVED BY IT. THUS FROM THE ANALYSIS UNDERTAKEN SUPRA IT IS ABUNDANTLY CLEA R THAT THE ASSESSEE HAS FAILED ALL THE THREE TESTS VIZ ONE, WHETHER INTRA-GROUP SERVIC ES HAVE IN FACT BEEN PROVIDED. SECOND WHAT IS THE CHARGE FOR SUCH SERVICES AND HOW SUCH CHARGE HAS BEEN DETERMINED I.E WHETHER THERE IS ANY SAFEGUARDS AGAI NST MANIPULATION AND WHETHER IT FOLLOW SOUND ACCOUNTING PRINCIPLES? MOREOVER, THE S ERVICES ARE IN THE NATURE OF STEWARDSHIP, DUPLICATIVE AND INCIDENTAL FOR WHICH N O CHARGE IS WARRANTED. 10. CONCLUSION: IN VIEW OF THE ABOVE, IN VIEW OF THE JUDICIAL PRECE DENTS AS WELL AS THE FACTS ON RECORD, THE ALP OF SUPPORT SERVICES IS PROPOSED TO BE RS. N IL AND AN UPWARD ADJUSTMENT OF RS. 9,82,97,079/- IS MADE TO THE INTERNATIONAL TRAN SACTION. THIS DISCUSSION IS APPLICABLE ONLY TO A.Y.2012-13. IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 8 ACCORDINGLY, DETERMINING THE ALP OF THE SAME AS NIL , TP ADJUSTMENT OF RS.982.97 LACS WAS PROPOSED BY LD. TPO WHICH WAS IN CORPORATED IN THE DRAFT ASSESSMENT ORDER DATED 28/03/2016. PROCEEDINGS BEFORE LD. DRP 3.1 AGGRIEVED, THE ASSESSEE RAISED VARIOUS OBJECTIO NS AGAINST THE DRAFT ASSESSMENT ORDER BEFORE LD. DRP VIDE DIRECTIONS U/S 144C(5) DATED 01/12/2016. DURING THE COURSE OF PROCEEDINGS, THE A SSESSEE JUSTIFIED THE BENCHMARK METHODOLOGY BY SUBMITTING THAT INTRA-GROU P SERVICES (IGS) WERE NOT INDEPENDENT TRANSACTIONS AND VALUE OF THES E SERVICES COULD NOT BE MEASURED ON STAND-ALONE BASIS AND THEREFORE, AGG REGATION APPROACH WAS THE MOST APPROPRIATE METHOD TO BENCHMARK THE SA ME. A PLEA WAS RAISED TO SUBMIT THAT LD. TPO EXCEEDED ITS JURISDIC TION BY COMPUTING THE ALP OF THE TRANSACTIONS AS NIL WITHOUT APPLYING ANY PRESCRIBED METHOD AND THEREFORE, THE ORDER WAS BAD IN LAW. THE ATTENT ION WAS ALSO DRAWN TO THE FACT THAT LD. TPO ERRED IN DETERMINING THE ALP AS NIL WITHOUT APPRECIATING THE DETAILS FILED BY THE ASSESSEE SUBS TANTIATING THE RECEIPT OF SERVICES, BENEFITS DERIVED AND BASIS OF ALLOCATI ON VIDE ITS VARIOUS SUBMISSIONS. IT WAS SUBMITTED THAT THE DETAILED BRE AK-UP OF THE COSTS AS INCURRED BY OVERSEAS, ALLOCATION WORKING AND METHOD OF ALLOCATION OF COST WAS DULY PROVIDED WHICH WAS CERTIFIED BY THE INDEPE NDENT AUDITOR ALSO. IN SUM AND SUBSTANCE, IT WAS SUBMITTED THAT THE ASSESS EE, IN AMPLE TERMS, SUBSTANTIATED THAT THE SERVICES WERE ACTUALLY RECEI VED AND THE PAYMENTS FOR THESE SERVICES WERE COMMENSURATE WITH THE BENEF ITS RECEIVED BY THE ASSESSEE. THE ATTENTION WAS ALSO DRAWN TO OECD GUID ELINES TO FORTIFY THE SUBMISSIONS THAT MARK UP OF 5% WAS AN ARMS LEN GTH STANDARD TO BE FOLLOWED TO BENCHMARK LOW-VALUE INTRA-GROUP SERVICE S. IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 9 3.2 THE ATTENTION WAS FURTHER DRAWN TO THE FACT THA T SIMILAR TRANSACTIONS WERE ENTERED INTO BY THE ASSESSEE IN AYS 2010-11 & 2011-12 AND THE FACTS IN IMPUGNED AY DID NOT CHANGE. THESE TRANSACT IONS WERE ACCEPTED BY LD. TPO IN EARLIER YEARS TO BE AT ARMS LENGTH A ND THEREFORE, LD. TPO COULD NOT DEVIATE FROM THE METHODOLOGY AS ADOPTED A S WELL AS ACCEPTED IN EARLIER YEARS. IN OTHER WORDS, THE PLEA OF RULE OF CONSISTENCY WAS RAISED. 3.3 RELIANCE WAS PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT RENDERED IN CUSHMAN & WAKEFIELD (INDIA) P. LD. [ITA NO. 472/201 2] & EKL APPLIANCES LTD [ITA NO.1068/2011 AND 1070/2011] FOR THE SUBMISSIONS THAT ROLE OF TPO WAS TO DETERMINE THE A LP OF THE TRANSACTIONS UNDER QUESTION RATHER THAN TO QUESTION THE COMMERCIAL WISDOM OF INCURRING OF THE EXPENDITURE. 3.4 THE LD. DRP, AFTER CONSIDERING THE SUBMISSIONS AND MATERIAL ON RECORD, INTER-ALIA, CONCURRED THAT NO TANGIBLE BENEFIT / SERVICES WERE RECEIVED BY THE ASSESSEE AGAINST THOSE PAYMENT. IN FACT, LD. DRP OBSERVED THAT THE ASSESSEE COMPANY WAS ACQUIRED BY THE AE SO AS TO GAIN THE EXPERTISE AND CREATIVE IDEAS OF THE ASSESS EE AS THE LATER WAS A LOCAL MARKET LEADER IN ADVERTISING INDUSTRY. AFTER PERUSAL OF EVIDENCES FURNISHED BY THE ASSESSEE, LD. DRP FORMED AN OPINIO N THAT THE ASSESSEE COULD NOT DEMONSTRATE RENDERING OF ANY SER VICES BY THE AE TO THE ASSESSEE FOR WHICH ANY PAYMENT WOULD BE MADE BY AN INDEPENDENT PARTY IN AN ARMS LENGTH SCENARIO. 3.5 THE LD. DRP FURTHER OPINED THAT VARIOUS ASPECTS WERE TO BE CONSIDERED WHILE EXAMINING THE ARMS LENGTH NATURE OF INTRA-GROUP SERVICES WHICH WOULD INCLUDE THE ONUS TO PROVE THAT THE SERVICES WERE IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 10 ACTUALLY RENDERED AND RECEIVED, QUANTIFICATION OF S UCH SERVICES IN TERMS OF ACTUAL EXPENDITURE AND COMMENSURATE BENEFITS DER IVED THEREFROM AND LASTLY, THE ARM LENGTH PRICE OF SUCH SERVICES. THE SAME WERE SOUGHT TO BE FORTIFIED ON THE BASIS OF OECD GUIDELINES MANDAT ING THE ENTITIES TO PROVE THAT INTRA-GROUP SERVICES WERE, IN FACT, PROV IDED AND SECONDLY, THE JUSTIFICATION OF CHARGES THEREOF. 3.6 IN THE ABOVE BACKGROUND, THE ASSESSEE WAS ASKED TO RELATE THE COST OF SPECIFIC ACTIVITIES CONDUCTED BY THE AE WIT H THE BENEFITS DERIVED. THE ASSESSEE WAS ALSO ASKED TO DEMONSTRATE THE BASI S OF ALLOCATION OF COSTS, THE ACTIVITIES FOR WHICH THEY WERE INCURRED AND THE BENEFIT ACCRUING TO THE ASSESSEE FROM THOSE ACTIVITIES. ALTHOUGH THE ASSESSEE FILED VARIOUS DETAILS, HOWEVER LD. DRP CONCLUDED THAT THE EVIDENCES WOULD NOT DEMONSTRATE THE RENDERING OF ANY SERVICES BY TH E AE TO THE ASSESSEE FOR WHICH ANY PAYMENT WOULD BE MADE BY AN INDEPENDE NT PARTY IN AN ARMS LENGTH SCENARIO. THE NATURE OF THESE SERVICES WERE GENERAL CORRESPONDENCES / NOTES AND EXCHANGE OF INFORMATION BETWEEN THE ASSESSEE AND ITS AE WHICH WOULD BE ENTERED INTO BET WEEN GROUP ENTITIES OF ANY GROUP. THEY WERE NOT OF THE NATURE WHICH WOU LD SHOW THAT ANY SPECIFIC AND DISTINCT SERVICES WAS RENDERED BY THE AE FOR WHICH ANY SEPARATE CHARGES WERE NEEDED TO BE PAID. MOREOVER, THESE SERVICES WERE MORE IN THE NATURE OF SHAREHOLDERS SERVICES O NLY. 3.7 PROCEEDING FURTHER, LD. DRP, IN PARA 3.2.10 , OBSERVED THAT EVEN ASSUMING THAT SOME SERVICES WERE RENDERED, THE ASSE SSEE HAS FAILED TO PROVE THE BENEFITS AND ALSO FAILED TO DEMONSTRATE T HAT PRICE PAID WAS SUCH THAT AN INDEPENDENT ENTITY WOULD HAVE PAID FOR SUCH SERVICES FOR THE BENEFITS RECEIVED BY IT. FURTHER THE DETAILS OF TOT AL COST INCURRED FOR IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 11 RENDERING OF THE SERVICES BY THE AE, THE NUMBER OF ENTITIES IN THE GROUP TO WHOM SUCH COST WERE ALLOCATED, ENTITY WISE DETAI LS OF ALLOCATION KEY AND THE AMOUNT ALLOCATED TO EACH ENTITY ON THE BASI S OF SUCH ALLOCATION KEY ETC. WAS NOT PROVIDED. FURTHER, IT HAS NOT BEEN DEMONSTRATED THAT THE COST ALLOCATED IS COMMENSURATE WITH THE BENEFITS DE RIVED BY THE ASSESSEE SO AS TO JUSTIFY THAT THE PAYMENT WAS ON A RMS LENGTH BASIS. THEREFORE, THE CLAIM OF THE ASSESSEE COULD NOT BE A LLOWED. 3.8 RELIANCE WAS PLACED ON THE DECISION OF BANGALOR E TRIBUNAL IN M/S GEM PLUS INDIA PVT. LTD. [ITA NO.352/BANG/2009 ], MUMBAI TRIBUNAL IN M/S DELOITTE CONSULTING INDIA PVT. LTD. [ITA NO. 579,1272,1273/MUM/2011] & DELHI TRIBUNAL IN M/S KNORR-BREMSE INDIA PVT. LTD. [ITA NO. 5097/DEL/2011] TO SUPPORT THE CONCLUSIONS. 3.9 FINALLY, THE IMPUGNED TP ADJUSTMENTS WERE CONFI RMED BY LD. DRP BY OBSERVING AS UNDER: - IN VIEW OF THE JUDICIAL PRECEDENTS AS WELL AS THE F ACTS ON RECORD, WE ARE OF THE VIEW THAT THE TPO HAS RIGHTLY DETERMINED THAT ALP OF IGS AT RS. NIL. THE PANEL IS ALSO OF THE VIEW THAT THE ASSESSEE HAS FAILED TO DEMONSTRAT E THAT IT HAS RECEIVED SERVICES OR THAT IT BENEFITTED FROM SUCH SERVICES AS CLAIMED. I T HAS FURTHER FAILED TO DEMONSTRATE THE INCURRENCE OF COST BY THE AE AS WELL AS ITS ALL OCATION AMONG THE VARIOUS GROUP ENTITIES. WE ARE OF THE VIEW THAT THE TPO HAS NOT Q UESTIONED THE COMMERCIAL EXPEDIENCY OF THE SUCH TRANSACTIONS ENTERED INTO BY THE ASSESSEE, RATHER, HAS ONLY WORKED OUT THE ARMS LENGTH PRICE OF THE PURPORTED SERVICE. WE ARE FURTHER OF THE VIEW THAT NO SERVICES ARE RENDERED NOR RECEIVED BY THE A SSESSEE AND WHAT IS RECEIVED (IF AT ALL) DO NOT TAKE CHARACTER OF CHARGEABLE SERVICE . THE PERUSAL OF THE E-MAILS AND OTHER CONTEMPORANEOUS RECORD ONLY GOES TO SHOW THAT INCIDENTAL AND PASSIVE ASSOCIATION BENEFITS HAVE BEEN PROVIDE BY THE AE. I N THIS VIEW OF THE MATTER, THERE COULD NEITHER BE ANY COST CONTRIBUTION OR PAYMENT F OR SUCH SERVICE TO THE AE. FURTHER, AS NO EXPENDITURE WOULD HAVE BENE INCURRED , THERE IS NO NECESSITY TO APPLY A PARTICULAR METHOD TO ARRIVE AT SUCH CONCLUSION. T HEREFORE, THE ADJUSTMENT DONE BY THE TPO ON THIS GROUND IS UPHELD AND THE OBJECTIONS FILED BY THE ASSESSEE IS REJECTED IN PRINCIPLE. HOWEVER, THE QUANTUM OF DISA LLOWANCE WOULD BE AS PER THE DIRECTIONS FOR GROUND OF OBJECTION NO. 2 BELOW. IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 12 3.10 BEFORE LD. DRP, THE ASSESSEE HAD RAISED ALTERN ATIVE SUBMISSIONS THAT OUT OF AFORESAID PAYMENT OF RS.982.97 LACS, AN AMOUNT OF RS.534.49 LACS WAS ALREADY DISALLOWED BY THE ASSESS EE U/S 40(A)(I) SINCE NO TAX WAS DEDUCTED AT SOURCE AND THEREFORE, THE NET EXPENDITURE CLAIMED BY THE ASSESSEE WAS ONLY RS.448.47 LACS AS AGAINST RS.982.97 LACS AS DISALLOWED BY LD. AO. FINDING SUBSTANCE IN THE SAME, LD. DRP DIRECTED THE LD. AO TO VERIFY THE RECORDS AND GRANT APPROPRIATE RELIEF SO AS TO RULE OUT DOUBLE TAXATION. 3.11 PURSUANT TO THE AFORESAID DIRECTIONS OF LD. DR P, FINAL ASSESSMENT ORDER WAS PASSED ON 31/01/2017 WHEREIN LD. AO WHILE RESTRICTING THE TP ADDITIONS TO RS.448.47 LACS, HELD THAT DEDUCTION OF AMOUNT ALREADY DISALLOWED U/S 40(A)(I) WOULD NOT BE AVAILABLE IN T HE YEAR IN WHICH THE ASSESSEE WOULD DEDUCT TAX AND MAKE A CLAIM FOR THE SAME. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. SUBMISSIONS BEFORE US 4.1 THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [AR], DRAWING OUR ATTENTION TO THE DOCUMENTS PLACED IN THE PAPER-BOOK INCLUDING ASSESSEES TP STUDY REPORT, SUBMITTED THAT LD. TPO, WHILE REJECTING ASSESSEES BENCHMARKING ANALYSIS AND WORKING OUT AL P OF THE STATED TRANSACTIONS, DID NOT APPLY ANY OF THE METHOD AS PR ESCRIBED U/S 92C(1) TO DEMONSTRATE THAT THE ALP OF THESE TRANSACTIONS WOUL D BE NIL . IN THE ABOVE BACKGROUND, RELYING UPON CERTAIN JUDICIAL PRO NOUNCEMENTS, LD. AR SUBMITTED THAT THE AFORESAID ACTION OF LD. TPO COUL D NOT BE SUSTAINED UNDER LAW AND THE MATTER COULD ALSO NOT BE RESTORED BACK FOR FRESH ADJUDICATION AS HELD IN VARIOUS DECISIONS. IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 13 4.2 ANOTHER PLEA RAISED BY LD. AR IS THE RULE OF CONSISTENCY . IT HAS BEEN SUBMITTED THAT THE PAYMENTS HAVE BEEN MADE BY THE ASSESSEE IN VARIOUS YEARS PURSUANT TO COMMON AGREEMENT ENTERED IN EARLIER YEARS AND THIS WAS THE ONLY AY IN WHICH THE ASSESSEES ME THODOLOGY HAS BEEN DISPUTED / DISTURBED BY LD. TPO. TO SUPPORT THE SAI D SUBMISSIONS, OUR ATTENTION HAS BEEN DRAWN TO ORDERS OF LD. TPO FOR A YS 2010-11 & 2011- 12. IT HAS ALSO BEEN SUBMITTED THAT NO SUCH ADJUSTM ENT HAS BEEN PROPOSED IN THE SUBSEQUENT YEARS AS WELL. 4.3 RELIANCE HAS BEEN PLACED ON FOLLOWING JUDICIAL PRONOUNCEMENTS TO SUPPORT VARIOUS SUBMISSIONS: - I) MERCK LIMITED V/S DCIT [MUMBAI TRIBUNAL 37 TAXMA NN.COM 433 AS CONFIRMED BY HONBLE BOMBAY HIGH COURT IN ITA NO.27 2 OF 2014 08/08/2016] II) CIT V/S JOHNSON & JOHNSON LTD. [HONBLE BOMBAY HIGH COURT ITA NO. 1030 OF 2014 07/03/2017] III) FIRMENICH AROMATICS INDIA PVT. LTD. V/S DCIT [ MUMBAI TRIBUNAL ITA NO.2590/MUM/2017 23/07/2018] IV) CLSA INDIA PVT. LTD. V/S DCIT [MUMBAI TRIBUNAL ITA NO. 1182/MUM/2017 16/01/2019] 4.4 PER CONTRA, LD. DR CONTROVERTED THE STAND OF LD . AR BY DRAWING OUR ATTENTION TO THE CASE LAWS CITED BY LD. DRP IN THE DIRECTIONS AND SUBMITTED THAT THE ASSESSEE FAILED TO DISCHARGE THE PRIMARY ONUS TO ESTABLISH THAT ANY OF THE SERVICES WERE EVER RENDER ED TO THE ASSESSEE AND THE ASSESSEE HAS FAILED TO DEMONSTRATE THE BENE FIT TEST. OUR FINDINGS AND CONCLUSIONS 5.1 WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS, PERUSED RELEVANT MATERIAL ON RECORD & DELIBERATED ON JUDICIAL PRONOU NCEMENTS AS CITED BEFORE US. WE HAVE NOTED THE BASIC FACTS AS ENUMERA TED BY US IN THE PRECEDING PARAGRAPHS. THE PERUSAL OF ASSESSEES TP STUDY REPORT, AS PLACED ON RECORD, REVEAL THAT THE ASSESSEE IS STATE D TO HAVE AVAILED TWO IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 14 TYPES OF SERVICES VIZ. MARKETING SUPPORT SERVICES & GLOBAL INFRASTRUCTURE SUPPORT SERVICES. THE MARKETING SUPPORT SERVICES AR E IN THE NATURE OF FOSTERING AND DEVELOPING CREATIVITY, NEW BUSINESS T ARGETING, PUBLIC RELATIONS, STRATEGIC PLANNING, MEDIA SUPPORT, FINAN CIAL ADMINISTRATION, HUMAN RESOURCE MANAGEMENT AND BUSINESS SERVICES ETC . COST INCURRED FOR PROVISION OF SUCH SERVICES IS ALLOCATED TO ALL THE GROUP COMPANIES BASED ON THE PROPORTION OF REVENUE OF THE SERVICE R ECIPIENT ALONG WITH A MARKUP OF 5%. IN ADDITION, UNDER GLOBAL INFRASTRUCTURE SUPPORT SERVICES (GIS) AGREEMENT , AE PROVIDES VARIOUS SERVICES LIKE INFRASTRUCTURE SERVICES, APPLICATION SERVICES, PROCUREMENT SERVICE S AND OTHER IT ASSISTANCE TO ALL GROUP COMPANIES INCLUDING THE ASS ESSEE. THE COST OF SERVICES UNDER THE GIS AGREEMENT IS ALLOCATED BASED ON NUMBER OF USERS, LICENSE ETC. THOUGHT THE DRAFT FCB WORLDWIDE IS COMPENSATED ON COST-PLUS A STANDARD MARK-UP FOR GIS SERVICES, HOWE VER, ONLY ACTUAL COST ARE STATED TO HAVE BEEN RECOVERED FROM THE ASSESSEE DURING THE YEAR. 5.2 BASED ON FUNCTIONS PERFORMED, ASSETS EMPLOYED & RISK ASSUMED (FAR) ANALYSIS, THE ASSESSEE HAS ADOPTED TNMM METHO D AND BENCHMARKED THE GIS SERVICES ALONG-WITH OTHER INTER NATIONAL TRANSACTIONS AND ARRIVED AT ASSESSEES MARGIN OF 39 .51% AS AGAINST MEAN MARGIN OF 7.84% REFLECTED BY COMPARABLE ENTITI ES. THE MARKETING SUPPORT SERVICES HAS SEPARATELY BEEN BENCHMARKED US ING SAME METHOD, THE FOREIGN AE BEING THE TESTED PARTY. THE ASSESSEE S MARK-UP OF 5% AS PITIED AGAINST MEAN MARK-UP OF 6.47% REFLECTED BY C OMPARABLE ENTITIES, LED TO CONCLUSION THAT THE SAME WERE WITHIN ARMS L ENGTH PRICE. 5.3 THE LD. AR HAS DRAWN OUR ATTENTION TO THE FACT THAT MARKETING & GIS SUPPORT SERVICES HAVE BEEN AVAILED BY THE ASSES SEE PURSUANT TO IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 15 AGREEMENTS DATED 01/04/2008, THE COPIES OF WHICH WE RE PLACED BEFORE LOWER AUTHORITIES. IT HAS BEEN SUBMITTED THAT THE S AME AGREEMENTS CONTINUE TO OPERATE DURING IMPUGNED AY. 5.4 THE LD. AR HAS STATED THAT ASSESSEE VIDE ITS VA RIOUS SUBMISSIONS BEFORE LD. TPO, FILED THE DETAILS OF AFORESAID EXPE NDITURE ALONG WITH EVIDENCES TO SUPPORT THE FACT THAT THE SERVICES WER E ACTUALLY AVAILED BY THE ASSESSEE. WE HAVE PERUSED THESE SUBMISSIONS FIL ED BY THE ASSESSEE, AS PLACED ON RECORD. WE FIND THAT VIDE SU BMISSIONS DATED 23/12/2015 AS PLACED ON PAGE NOS.328 TO 663 OF THE PAPER-BOOK, THE ASSESSEE, UNDER EACH HEAD OF INTRA-GROUP SERVICES T ABULATED THE TANGIBLE BENEFITS DERIVED THEREFROM ALONG WITH EVIDENCES OF SERVICES. THESE EVIDENCES ARE, PRIMA-FACIE, IN THE SHAPE OF E-MAIL EXCHANGES SUGGESTING EXCHANGE OF INFORMATION AS TO ADVERTISING CONTENTS AND PRESENTATION ETC. THE PERUSAL OF THESE DOCUMENTS WOULD SHOW THAT THE SAME IS NOT GENERAL EXCHANGE OF INFORMATION BUT SPECIFICALLY AI MED TOWARDS ADVERTISING ACTIVITIES, WHICH IS THE CORE BUSINESS ACTIVITY FOR THE ASSESSEE. SIMILARLY, VIDE SUBMISSIONS DATED 15/01/2 016, THE ASSESSEE FILED COPIES OF PRESENTATION ON ADVERTISING STRATEG Y AND SAMPLE VIDES OF TELEVISION COMMERCIALS AS SHARED BY ITS AE WITH THE ASSESSEE TO SUPPORT THE FACTUM OF RECEIPT OF SERVICES. SOME SIMILAR ADD ITIONAL DETAILS HAVE BEEN FILED BY THE ASSESSEE VIDE SUBMISSIONS DATED 2 0/01/2016 IN SUPPORT OF THE FACT THAT THAT THE ASSESSEE RECEIVED VARIOUS MATERIAL IN THE FORM OF CREATIVE CONCEPTS, CAMPAIGNS, GLOBAL IDEAS, BEST GLOBAL PRACTICES ETC. FROM ITS OVERSEAS AE FOR ADOPTING AND LEVERAGI NG THE SAME IN THE GLOBAL MARKETS. SIMILARLY, VIDE SUBMISSIONS DATED 2 7/01/2016, THE ASSESSEE SUBMITTED DETAILS OF INPUTS RECEIVED FROM OVERSEAS AE AT EACH IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 16 STAGE OF FUNCTIONAL ACTIVITY. THE ASSESSEE HAS DULY SUBMITTED THE PROOF OF EVIDENCES OF SERVICES RECEIVED, BENEFITS DERIVED, B ASIS OF ALLOCATION OF COST BY OVERSEAS AE AND BENCHMARKING APPROACH ADOPT ED BY THE ASSESSEE. IN SUPPORT OF THE QUANTIFICATION AND ALLO CATION, THE ASSESSEE ALSO FILED REPORT OF INDEPENDENT ACCOUNTANTS. UPON PERUSAL OF ALL THESE DOCUMENTARY EVIDENCES, IT IS DIFFICULT TO ACCEPT TH E FACT THAT NO SERVICES WERE RECEIVED BY THE ASSESSEE AND NO BENEFITS WERE DERIVED THEREFROM. IN THE SAID CIRCUMSTANCES, MERE BRUSHING ASIDE OF A LL THESE EVIDENCES BY LD. TPO ON THE BASIS OF MERE ALLEGATIONS AND WITHOU T CONTROVERTING THE SAME, IN OUR OPINION, COULD NOT BE SUSTAINED IN LAW . 5.5 THE ABOVESAID PROPOSITION IS FORTIFIED BY THE F ACT THAT THE ASSESSEE MADE SIMILAR PAYMENT OF RS.750.90 LACS IN AY 2011-1 2 WHICH HAS BEEN ACCEPTED BY LD. TPO TO BE AT ARMS LENGTH VIDE ORDE R PASSED U/S 92CA(3) ON 31/12/2014. SIMILARLY, NO TP ADJUSTMENT HAS BEEN PROPOSED FOR AY 2010-11 BY LD. TPO IN ORDER PASSED U/S 92CA (3) ON 29/01/2014. THE LD. AR HAS SUBMITTED THAT NO SUCH ADJUSTMENT HA S BEEN PROPOSED IN THE SUBSEQUENT YEARS ALSO. IN THE SAID FACTUAL M ATRIX, IT IS DIFFICULT TO ACCEPT THE ALLEGATIONS OF THE REVENUE THAT NO SUCH SERVICES WERE RENDERED AND THE ASSESSEE DERIVED NO BENEFITS BY AV AILING THE SAID SERVICES. THESE SERVICES WERE BEING AVAILED PURSUAN T TO COMMON AGREEMENT ENTERED INTO BY THE ASSESSEE IN FINANCIAL YEAR 2008-09 AND THEREFORE, DISPUTING THE SAME ONLY IN ONE YEAR WHIL E ACCEPTING THE SAME IN OTHER YEARS, WOULD ONLY REFLECT CONTRADICTORY AP PROACH ADOPTED BY THE REVENUE. THE RULE OF CONSISTENCY, AS PROPOUNDED BY HONBLE SUPREME COURT IN RADHASOAMI SATSANG V/S CIT [60 TAXMAN 248] , WOULD MAKE IT OBLIGATORY FOR THE ASSESSEE AS WELL AS REVENUE TO T AKE CONSISTENT IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 17 APPROACH IN THE ISSUES, FACTS AND CIRCUMSTANCES BEI NG THE SAME. IN THE AFORESAID DECISION, HONBLE COURT HAS HELD THAT WH ERE THE FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HA VE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORD ER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. THE FOLLOWING CASE LAWS AS CITED BY LD. AR ALSO SUP PORTS THE SAID VIEW: - NO. CASE LAW DATE OF DECISION JUDICIAL AU THORITY CITATION 1. CLARIANT CHEMICALS (INDIA) LTD. VS. JCIT(OSD) 29/11/2013 ITAT MUMBAI BENCH 44 TAXMANN.COM 421 2. ZEE ENTERTAINMENT ENTERPRISE LTD. VS. ACIT 05/05/2017 ITAT MUMBAI BENCH 81 TAXMANN.COM 379 3. KUEHNE + NAGEL (P.) LTD. VS. ACIT 23/12/2011 ITAT DELHI BENCH 17 TAXMANN.COM 97 4. RACOLD THERMO LIMITED VS. DCIT 11/09/2016 ITAT PUNE BENCH ITA NO.1454/PN/2010 5. SCHNEIDER ELECTRIC INDIA (P.) LTD. 31/05/2017 IT AT AHMEDABAD BENCH 82 TAXMANN.COM 364 5.6 PROCEEDING FURTHER, WE FIND THAT LD. TPO, REJEC TED THE ASSESSEES METHODOLOGY BY STRESSING UPON BENEFIT TEST BY OBSER VING THAT THE ASSESSEE COULD NOT ESTABLISH THE FACTUM OF RECEIPT OF SERVICES AND ALSO COULD NOT DEMONSTRATE THE CORRESPONDING BENEFITS RE CEIVED BY THE ASSESSEE BY AVAILING THESE SERVICES. THE SAID SERVI CES, IN THE OPINION OF LD. TPO, COULD BE OBTAINED FROM AN INDEPENDENT CONS ULTANT IN INDIA AT LOWER COST AND FURTHER, THE ASSESSEE ALREADY HAD RE QUISITE EXPERTISE WHICH IS FURTHER EVIDENCED BY THE FACT THAT THE ASS ESSEE WAS ACQUIRED BY ITS AE OWING TO ITS DOMAIN EXPERTISE. HOWEVER, AS N OTED EARLIER, THE SAID SERVICES HAVE BEEN RECEIVED BY THE ASSESSEE PURSUAN T TO AGREEMENTS ENTERED IN FINANCIAL YEAR 2008-09, WHICH HAS BEEN F OUND TO BE AT ARMS LENGTH PRICE IN THE EARLIER TWO ASSESSMENT YEARS. S ECONDLY, IT WAS NOT THE JURISDICTION OF LD. TPO TO QUESTION THE ASSESSE ES COMMERCIAL IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 18 WISDOM TO AVAIL SERVICES IN A PARTICULAR MANNER. TH E ASSESSEE HAD PLACED ON RECORD PLETHORA OF DOCUMENTARY EVIDENCES, AS ENUMERATED BY US IN PARA 5.4, IN SUPPORT OF THE FACT THAT THE SER VICES WERE ACTUALLY RECEIVED AND BENEFITS WERE DERIVED. HOWEVER, THE SA ME HAS BEEN DISREGARDED AND BRUSHED ASIDE IN A VERY LIGHT MANNE R WHICH COULD NOT BE HELD TO BE JUSTIFIED. 5.7 ANOTHER ASPECT TO BE NOTED IS THAT LD. TPO HAS DETERMINED ALP OF THE TRANSACTIONS AS NIL WITHOUT APPLYING ANY OF THE METHODS PRESCRIBED U/S 92C OF THE ACT TO DETERMINE THE ALP. IT IS EVID ENT THAT NO TRANSFER PRICING EXERCISE WAS DONE BY LD. TPO TO DETERMINE T HE VALUE OF THE SERVICES, WHATEVER, RECEIVED BY THE ASSESSEE. NO CO MMENT HAS BEEN MADE ON CORRECTNESS OR APPROPRIATENESS OF ASSESSEE S TP METHODOLOGY. THEREFORE, THE APPROACH OF LD. TPO COULD NOT BE SAI D TO BE IN ACCORDANCE WITH THE SPIRIT OF LAW. OUR PROPOSITION IS WELL SUPPORTED BY THE FOLLOWING JUDICIAL PRONOUNCEMENTS, AS CITED BY LD. AR: - NO. CASE LAW DATE JUDICIAL AUTHORITY CITATION 1. CIT(A) VS. MERCK LIMITED 19/07/2013 ITAT MUMBAI BENCH 37 TAXMANN.COM 43 2. CIT(A) VS. MERCK LIMITED 08/08/2016 HON'BLE BOMB AY HIGH COURT INCOME TAX APPEAL NO.272 OF 2014 3. CIT(A) VS. JOHNSON AND JOHNSON LIMITED 07/03/2017 HON'BLE BOMBAY HIGH COURT INCOME TAX APPEAL NO.1030 OF 2014 4. CIT VS. KODAK INDIA PRIVATE LIMITED 11/07/2016 HON'BLE BOMBAY HIGH COURT INCOME TAX APPEAL NO.15 OF 2014 5. CIT VS. LEVER INDIA EXPORTS LIMITED 23/01/2017 HON'BLE BOMBAY HIGH COURT INCOME TAX APPEAL NO.1306, 1307,1349 OF 2014 6. LG ELECTRONICS INDIA PRIVATE LIMITED 23/01/2013 ITAT DELHI SPECIAL BENCH ITA NO.5140/DEL/2011 7. DCIT VS. DIEBOLD SOFTWARE SERVICES P.LTD. 25/04/2014 ITAT MUMBAI BENCH ITA NO. 4347/MUM/2012 8. DET NORSKE VERITAS A/S VS. ADIT (INTL. TAXN) 29/02/2016 ITAT MUMBAI BENCH ITA NO.200/MUM/2014 9. FIRMENICH AROMATICS INDIA P.LTD. VS. DCIT 23/07/2018 ITAT MUMBAI BENCH ITA NO.2590/MUM/2017 IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 19 10. ACIT VS. M/S. KOCH CHEMICAL TECHNOLOGY GROUP (INDIA) LIMITED 30/09/2015 ITAT MUMBAI BENCH ITA NO.8091/MUM/2011 (A.Y. 2007-08); ITA NO.7236/MUM/2010 (A.Y. 2006-07) AND ITA NO.7958/MUM/2011 (A.Y. 2007-08) 11. M/S. CLSA INDIA PRIVATE LIMITED VS. DCIT 16/01/2019 ITAT MUMBAI BENCH ITA NO.1182/MUM/2017 THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. LEVER INDIA EXPORTS LIMITED [SUPRA], ELABORATING IN THE ROLE OF LD. TPO, HAS OBSERVED AS UNDER: - 7. WE NOTE THAT THE TRIBUNAL HAS RECORDED THE FACT THAT THE RESPONDENT ASSESSEE HAS LAUNCHED NEW PRODUCTS WHICH INVOLVED HUGE ADVER TISEMENT EXPENDITURE. THE SHARING OF SUCH EXPENDITURE BY THE RESPONDENT ASSES SEE IS A STRATEGY TO DEVELOP ITS BUSINESS. THIS RESULTS IN IMPROVING THE BRAND IMAGE OF THE PRODUCTS, RESULTING IN HIGHER PROFIT TO THE RESPONDENT ASSESSEE DUE TO HIG HER SALES. FURTHER, IT MUST BE EMPHASIZED THAT THE TPO'S JURISDICTION WAS TO ONLY DETERMINE THE ALP OF AN INTERNATIONAL TRANSACTION. IN THE ABOVE VIEW, THE T PO HAS TO EXAMINE WHETHER OR NOT THE METHOD ADOPTED TO DETERMINE THE ALP IS THE MOST APPROPRIATE AND ALSO WHETHER THE COMPARABLES SELECTED ARE APPROPRIATE OR NOT. IT IS NOT PART OF THE TPO'S JURISDICTION TO CONSIDER WHETHER OR NOT THE EXPENDI TURE WHICH HAS BEEN INCURRED BY THE RESPONDENT ASSESSEE PASSED THE TEST OF SECTION 37 OF THE ACT AND /OR GENUINENESS OF THE EXPENDITURE. THIS EXERCISE HAS T O BE DONE, IF AT ALL, BY THE ASSESSING OFFICER IN EXERCISE OF HIS JURISDICTION T O DETERMINE THE INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE ACT. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT DISALLOWED THE EXPENDITURE BUT ONLY ADOPTED THE TPO'S DETERMINATION OF ALP OF THE ADVERTISEMENT EXPENSES. THEREFORE, THE ISSUE FO R EXAMINATION IN THIS APPEAL IS ONLY THE ISSUE OF ALP AS DETERMINED BY THE TPO IN R ESPECT OF ADVERTISEMENT EXPENSES. THE JURISDICTION OF THE TPO IS SPECIFIC A ND LIMITED I.E. TO DETERMINE THE ALP OF AN INTERNATIONAL TRANSACTION IN TERMS OF CHA PTER X OF THE ACT READ WITH RULE 10A TO 10E OF THE INCOME TAX RULES. THE DETERMINATI ON OF THE ALP BY THE RESPONDENT ASSESSEE OF ITS ADVERTISEMENT EXPENSES H AS NOT BEEN DISPUTED ON THE PARAMETERS SET OUT IN CHAPTER X OF THE ACT AND THE RELEVANT RULES. IN FACT, AS FOUND BOTH BY THE CIT(A) AS WELL AS THE TRIBUNAL THAT NEI THER THE METHOD SELECTED AS THE MOST APPROPRIATE METHOD TO DETERMINE THE ALP IS CHA LLENGED NOR THE COMPARABLES TAKEN BY THE RESPONDENT ASSESSEE IS CHALLENGED BY T HE TPO. THEREFORE, THE ADHOC DETERMINATION OF ALP BY THE TPO DEHORS SECTION 92C OF THE ACT CANNOT BE SUSTAINED. IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 20 SIMILAR VIEW HAS BEEN EXPRESSED BY CO-ORDINATE BENC H OF MUMBAI TRIBUNAL IN FIRMENICH AROMATICS INDIA PVT. LTD. VS. DCIT. THE CO- ORDINATE BENCH HAS OBSERVED AS UNDER: - 21. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D MATERIALS ON RECORD IN THE LIGHT OF DECISIONS RELIED UPON. THOUGH, THE TRANSFE R PRICING OFFICER HAS ALLEGED THAT THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE TO SUBS TANTIATE ITS CLAIM THAT THE PAYMENT MADE TO THE AE FOR AVAILING INFORMATION SYS TEM SERVICES, HOWEVER, THE MATERIAL ON RECORD REVEAL THAT THE ASSESSEE HAS NOT ONLY UNDERTAKEN A BENCH MARKING PROCESS FOR DETERMINING THE ARM'S LENGTH PR ICE OF THE TRANSACTION IN THE TRANSFER PRICING STUDY REPORT WHICH WAS FILED BEFOR E THE TRANSFER PRICING OFFICER, BUT, OTHER RELEVANT AND NECESSARY DOCUMENTS LIKE COPY OF THE AGREEMENT, INVOICES RAISED, CERTIFICATE FROM INDEPENDENT CHARTERED ACCO UNTANT FIRM, KPMG, DETAILS OF USERS WERE ALSO FURNISHED BEFORE THE TRANSFER PRICI NG OFFICER. THEREFORE, THE ALLEGATION OF THE TRANSFER PRICING OFFICER THAT THE ASSESSEE HAS NOT FURNISHED THE NECESSARY DETAILS IS NOT TOTALLY CORRECT. IN ANY CA SE OF THE MATTER, NONFURNISHING OF CERTAIN DOCUMENTARY EVIDENCES, AS ALLEGED BY THE TR ANSFER PRICING OFFICER, DOES NOT EMPOWER HIM TO EMBARK UPON DETERMINING THE ARM'S LE NGTH PRICE OF THE INTERNATIONAL TRANSACTION ON ESTIMATION BASIS. FURTHER, A READING OF THE TRANSFER PRICING OFFICERS ORDER MAKES IT CLEAR THAT HIS FINDING ON THE ISSUE IS CONTRADICTORY. ON THE ONE HAND, HE HAS OBSERVED THAT THE ASSESSEE HAS FAILED ALL TH E THREE TESTS, INCLUDING, WHETHER THE SERVICES HAVE ACTUALLY BEEN PROVIDED, ON THE OT HER HAND, HE HAS ACCEPTED THAT THE AE HAS PROVIDED THE SOFTWARE. THUS, ULTIMATELY, WHAT THE TRANSFER PRICING OFFICER DISBELIEVES IS THE QUANTUM OF PAYMENT. ACCORDINGLY, HE HAS PROCEEDED TO ESTIMATE THE PRICE OF THE SERVICES RENDERED BY THE AE AT RS. 1,62,05,000. THOUGH, THE TRANSFER PRICING OFFICER HAS OBSERVED THAT HE HAS A PPLIED CUP METHOD FOR DETERMINING THE ARM'S LENGTH PRICE, HOWEVER, HE HAS NOT BROUGHT ON RECORD EVEN A SINGLE COMPARABLE TO SUPPORT THE ARM'S LENGTH PRICE DETERMINED BY HIM EVEN ON ESTIMATE BASIS. THE ESTIMATION OF SERVICE CHARGES O N SO CALLED MAN HOUR BASIS IS WITHOUT ANY SUPPORTING MATERIAL. SIMILARLY, THE EST IMATION OF COST OF SOFTWARE AT RS. 1 CRORE IS WITHOUT ANY BASIS. THUS, IT IS VERY MUCH C LEAR THAT THE DETERMINATION OF ARM'S LENGTH PRICE BY THE TRANSFER PRICING OFFICER IS NOT AS PER ANY ONE OF THE METHODS PRESCRIBED UNDER SECTION 92C OF THE ACT R/W RULE 10 B. AS DISCUSSED ELSEWHERE IN THIS ORDER, SUCH DETERMINATION OF ARM'S LENGTH PRICE ON ADHOC / ESTIMATION BASIS IS NOT PERMISSIBLE UNDER THE SCHEME OF THE ACT AS THE TRAN SFER PRICING OFFICER IS DUTY BOUND TO DETERMINE THE ARM'S LENGTH PRICE BY FOLLOW ING ANY ONE OF THE MOST APPROPRIATE METHOD PRESCRIBED UNDER THE STATUTE. IT IS RELEVANT TO OBSERVE, THE DRP HAS APPROVED THE DETERMINATION OF THE ARM'S LENGTH PRICE BY THE TRANSFER PRICING OFFICER WITHOUT PROPERLY APPRECIATING THE IMPLICATI ON OF THE RELEVANT STATUTORY PROVISIONS. AS REGARDS THE OBSERVATIONS OF THE DRP REGARDING THE REPORT OF THE KPMG, IT IS NECESSARY TO OBSERVE THAT THE KPMG REPO RT IS NOT AN AUDIT REPORT BUT WAS FURNISHED BY THE ASSESSEE TO SUPPORT THE ATTRIB UTION OF COST. THEREFORE, IT CANNOT BE SAID THAT IT IS A QUALIFIED REPORT. IT IS FURTHE R RELEVANT TO OBSERVE, THE MATERIAL SUBMITTED BEFORE US, WHICH ALSO FORMS PART OF THE T RANSFER PRICING OFFICERS RECORD, INDICATES THAT THE COST OF THE SOFTWARE HAS BEEN AL LOCATED TO 40 GROUP COMPANIES ACROSS THE GLOBE WHO ARE USING THE SOFTWARE AND REL ATED SERVICES AND ASSESSEES IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 21 SHARE IN COST ALLOCATION WORKS OUT TO 2.3%. MOREOVE R, WHEN THE TRANSFER PRICING OFFICER HIMSELF AGREES THAT THE AE HAS PROVIDED SOF TWARE AND CERTAIN SERVICES, THERE IS NO REASON FOR NOT ACCEPTING THE PAYMENT MADE TO THE AE TO BE AT ARM'S LENGTH IN THE ABSENCE OF ANY CONTRARY EVIDENCE BROUGHT ON REC ORD AND BY SIMPLY APPLYING THE BENEFIT TEST. IF THE TRANSFER PRICING OFFICER DID N OT AGREE TO THE ARM'S LENGTH PRICE SHOWN BY THE ASSESSEE IT WAS OPEN FOR HIM TO DETERM INE THE ARM'S LENGTH PRICE BY APPLYING ONE OF THE MOST APPROPRIATE METHODS BEING BACKED BY SUPPORTING MATERIAL. WITHOUT COMPLYING TO THE STATUTORY PROVISIONS, THE TRANSFER PRICING OFFICER CERTAINLY CANNOT DETERMINE THE ARM'S LENGTH PRICE ON ADHOC / ESTIMATION BASIS. OUR REASONING IN PARAGRAPH 11 TO 15 WILL EQUALLY APPLY TO THIS IS SUE ALSO. ACCORDINGLY, WE DELETE THE ADJUSTMENT MADE TO THE ARM'S LENGTH PRICE OF PAYMEN T MADE TOWARDS AVAILING INFORMATION SYSTEM SERVICES FROM AE. THIS GROUND IS ALLOWED. THE OTHER CASE LAWS ALSO SUPPORT THE SAME VIEW. 5.8 THE DECISION OF BANGALORE TRIBUNAL IN GEMPLUS INDIA (P) LTD. V/S ACIT [3 TAXMANN.COM 755], AS RELIED UPON BY REVENUE, IS DISTINGUISHABLE ON FACTS SINCE IN THAT CASE, THE AS SESSEE FAILED TO ESTABLISH THAT THE PAYMENTS WERE COMMENSURATE TO VO LUME AND QUALITY OF SERVICES AND THE COSTS WERE COMPARABLE. IN THE P RESENT CASE, THE ASSESSEE HAS PROVIDED SUFFICIENT DOCUMENTARY EVIDEN CES TO JUSTIFY THE PAYMENT, HOWEVER, THE SAME HAS BEEN DISREGARDED. TH E DECISION OF MUMBAI TRIBUNAL IN M/S DELOITTE CONSULTING INDIA PVT. LTD. [22 TAXMANN.COM 107] HAVE BEEN RENDERED IN A CASE WHEREIN THE ASSESSEE COULD NOT FURNISH EVIDENCES SO AS TO PROVE THAT THE MARKETING SERVICES WERE RENDERED TO THE ASSESSEE. THE DECISIO N OF DELHI TRIBUNAL IN M/S KNORR-BREMSE INDIA PVT. LTD. [27 TAXMAN.COM 16] DEAL WITH A SITUATION WHEREIN THE METHOD OF DETERMINING ALP WAS DISPUTED BY LD. TPO. THEREFORE, THESE DECISIONS ARE DISTINGUISHABLE ON FACTS. 5.9 KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCU MSTANCES AS ENUMERATED BY US IN THE PRECEDING PARAGRAPHS, WE AR E UNABLE TO PURSUED OURSELVES TO SUSTAIN THE ACTION OF REVENUE IN SUSTAINING IT(TP)A NO.2194/MUM/2017 M/S FCB ULKA ADVERTISING PVT. LTD. ASSESSMENT YEAR 2012-13 22 IMPUGNED ADDITIONS IN THE HANDS OF ASSESSEE. HENCE, BY DELETING THE ADDITIONS OF RS.448.47 LACS AS MADE IN THE FINAL AS SESSMENT ORDER, WE ALLOW GROUND NOS. 1 TO 7 OF THE APPEAL. THE SUO-MOTO DISALLOWANCE OF RS.534.49 LACS AS MADE BY THE ASSESSEE U/S 40(A)(IA ) SHALL BE ALLOWABLE IN ACCORDANCE WITH LAW. ACCORDINGLY, GROU ND NO.8 ALSO STANDS ALLOWED. GROUND NO.9 CONTEST LEVY OF INTEREST U/S 2 34B & 234C. THE SAME BEING MANDATORY AND CONSEQUENTIAL, WOULD NOT R EQUIRE ANY INDULGENCE ON OUR PART. 6. RESULTANTLY, THE APPEAL STANDS ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JUNE, 2019. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 25/06/2019 SR. PS : JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #$!' / THE RESPONDENT 3. %% ( ) / THE CIT(A) 4. %% / CIT CONCERNED 5. & '# ( , % ( , / DR, ITAT, MUMBAI 6. ' *+, / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.