Donaldson India Filter Systems Pvt. Ltd., Gurgaon V. DCIT, New Delhi

ITA 3218/DEL/2015

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0702 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 21-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR YADAV SENIOR
• Assessee Lawyers: MANONEET DALAL
• Keywords: Transfer pricing; International transaction; Rule of consistency
• Section: 234B; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I-2 : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3218/DEL./2015 (ASSESSMENT YEAR : 2010-11) M/S. DONALDSON INDIA FILTER SYSTEMS VS. DCIT, CIRCL E 7 (2), PRIVATE LIMITED, NEW DELHI. VILLAGE NAHARPUR, KASAN, PO NAKHROLA DISTT., GURGAON (HARYANA). (PAN : AAACD0225H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANONEET DALAL, AR REVENUE BY : SHRI SANJAY KUMAR YADAV, SENIOR DR DATE OF HEARING : 05.07.2018 DATE OF ORDER : 03.10.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. DONALDSON INDIA FILTER SYSTEMS PVT. LTD. (FOR SHORT THE TAXPAYER), BY FILING THE PRESENT A PPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 08.01.2015, PASSED B Y THE AO UNDER SECTION 144C READ WITH SECTION 143 (3) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) QUA THE ASSESSMENT YEAR 2010-11 IN CONSONANCE WITH THE ORDERS PASSED BY THE LD. DRP/TP O ON THE GROUNDS INTER ALIA THAT :- ITA NO.3218/DEL./2015 2 1) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE ORDER PASSED BY THE LD. AO IS BAD IN LAW AND VOID AB-INITIO. 2) THE LD. AO/LD. TPO/ LD. DISPUTE RESOLUTION PANEL ('DRP') ERRED ON FACTS AND CIRCUMSTANCES OF T HE CASE IN DETERMINING THE ARM'S LENGTH ADJUSTMENT TO THE ASSESSEE'S INTERNATIONAL TRANSACTIONS FROM ASSOCIAT ED ENTERPRISES ('AES') AND THEREBY RESULTING IN THE ENHANCEMENT OF RETURNED INCOME OF THE ASSESSEE BY RS.10,692,707/-. 3) THAT THE REFERENCE MADE BY THE LD. AO SUFFERS FROM JURISDICTIONAL ERROR AS THE LD. AO HAS NOT RECORDED ANY REASONS IN THE ASSESSMENT ORDER BASED ON WHICH HE REACHED THE CONCLUSION THAT IT WAS 'EXPEDI ENT AND NECESSARY' TO REFER THE MATTER TO THE LD. TPO F OR COMPUTATION OF THE ARM'S LENGTH PRICE, AS IS REQUIR ED UNDER SECTION 92CA(1) OF THE 'INCOME TAX ACT, 1961 ('ACT'). 4) THE LD. AO / LD. TPO/ LD. DRP ERRED ON FACTS AND IN LAW DETERMINING THE ALP OF THE ASSESSEE'S INTERNATIONAL TRANSACTIONS PERTAINING TO PAYMENT OF INTRA GROUP SERVICES/MANAGEMENT FEE AS NIL AGAINST THE SUM OF RS.10,692,707/- INCURRED BY THE ASSESSEE AND IN DOING SO HAVE GROSSLY ERRED IN THE FOLLOWING MANNER - 4.1 THE LD. AO/LD. TPO/ LD. DRP ERRED IN FACTS AND IN LAW IN HOLDING THAT NEITHER THE ASSESSEE HAS REC EIVED ANY SERVICE AND/ OR BENEFIT IN LIEU OF THE PAYMENT MADE BY IT FOR SERVICES AVAILED NOR WAS THERE WAS ANY NE ED FOR SUCH SERVICES/ PAYMENTS; 4.2 THE LD. AO/LD. TPO/ LD. DRP ERRED IN FACTS AND IN LAW BY ARBITRARILY REJECTING THE TRANSACTIONAL N ET MARGIN METHOD ANALYSIS ADOPTED BY THE ASSESSEE AS T HE MOST APPROPRIATE METHOD FOR BENCHMARKING 4,3 THE LD. AO/LD. TPO/ LD. DRP ERRED IN FACTS AND IN LAW IN APPLYING CUP METHOD MERELY BASED ON PRESUMPTIONS AND WITHOUT FURNISHING DETAILS OF PRIC E CHARGED IN ANY COMPARABLE UNCONTROLLED TRANSACTION ITA NO.3218/DEL./2015 3 WHICH IS IN CONTRAVENTION OF THE PROVISIONS OF RULE 10B OF THE RULES. 4.4 THE LD. AO/LD. TPOI LD. DRP ERRED IN FACTS AND IN LAW BY NOT CONSIDERING THAT SUCH PAYMENT WAS MAD E BY THE ASSESSEE IN THE EARLIER YEARS ALSO AND NO AD VERSE INFERENCE WAS DRAWN BY THE LD. TPO IN THOSE YEARS. 5 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO HAS ERRED IN INITIATING PENA LTY PROCEEDINGS U/S 271(1)(C) OF THE ACT MECHANICALLY A ND WITHOUT RECORDING ANY ADEQUATE SATISFACTION FOR SUC H INITIATION. 6 THAT THE LD. AO ERRED IN FACTS AND IN LAW IN CHARGING AND COMPUTING INTEREST UNDER SECTION 234B AND 234D OF THE ACT. 2. BRIEFLY STATED THE FACTS NECESSARY TO ADJUDICATE THE ISSUES IN CONTROVERSY ARE : THE TAXPAYER COMPANY BEING A SUBS IDIARY OF DONALDSON COMPANY INC., USA (DCI) IS INTO THE MANUF ACTURING AND MARKETING OF AIR FILTRATION SYSTEMS, RELATED SU PPLIES AND PARTS. IT ALSO PROVIDES DESIGN SERVICE AND AFTER SALES SER VICE FOR EQUIPMENT SOLD BY THE TAXPAYER TO THE CUSTOMER IN INDIA. THE COMPANY WAS INCORPORATED WITH THE OBJECTIVE OF CARRYING ON THE BUSINESS OF MANUFACTURING, BUYING, SELLING, EXPORTING AND IMPOR TING OF ALL KIND OF HYDRAULIC, NAMELY FILTERS AND FILTER MEDIA INCLU DING AIR FILTER AND SELF-CLEANING AIR FILTRATION SYSTEM FOR GAS TURBINE S, COMPRESSORS, AUTOMOBILES FILTERS, FILTERS FOR CONSTRUCTION EQUIP MENT, VENTILATION, COOLING POLLUTION CONTROL ETC. THE TAXPAYERS PARE NT COMPANY, ITA NO.3218/DEL./2015 4 DONALDSON COMPANY INC., USA (DCI), IS A COMPANY BAS ED IN MINNEAPOLIS, MINNESOTA USA AND IS THE MAIN PARENT C OMPANY OF THE DONALDSON GROUP. 3. DURING THE YEAR UNDER ASSESSMENT, THE TAXPAYER H AS REPORTEDLY ENTERED INTO INTERNATIONAL TRANSACTIONS AS UNDER :- INTERNATIONAL TRANSACTION METHOD DONALDSON INDIA COMPARABLES [PLI] VALUE (RS.) MARGIN ARITHMETIC MEAN PURCHASE OF RAW MATERIALS, COMPONENTS ETC. TNMM OP/SALES 89,205,633 9.38% 9.08% PURCHASE OF FILTERS 197,507,240 SALE OF FILTERS 50,840,054 ROYALTY 10,127,454 MANAGEMENT FEE PAID / PROJECT FEE 10,692,716 ERECTION CHARGES RECEIVED 138,151 REIMBURSEMENT OF EXPENSES PAID 10,288,161 REIMBURSEMENT OF EXPENSES RECEIVED CUP NA 531,880 NA NA COMMISSION RECEIVED TNMM OP/SALES 2,337,475 1.12% 2.70% REIMBURSEMENT OF EXPENSES PAID TNMM OP/SALES 769,505 1.12% 2.70% PROVISION OF ENGINEERING DESIGN SERVICES TNMM OP/OC 21,057,318 119.85% 15.15% 4. FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS DURING THE YEAR UNDER ASSESSMENT, THE TAXPAYER HAS ADOPTED SEG MENTAL APPROACH FOR ITS MANUFACTURING, TRADING AND SERVICE TRANSACTION BY USING TRANSACTIONAL NET MARGIN METHOD (TNMM) AS MOS T ITA NO.3218/DEL./2015 5 APPROPRIATE METHOD (MAM) AND FOUND ITS INTERNATIONA L TRANSACTIONS INCLUDING MANAGEMENT FEES TRANSACTION AT ARMS LENGTH. THE LD. TPO ACCEPTED ALL THE INTERNATIONAL TRANSACTIONS ENTERED INTO BY THE TAXPAYER DURING THE YEAR UNDER ASSESSMENT AT ARMS LENGTH EXCEPT TRANSACTION QUA PAYMENT OF MANA GEMENT FEE/INTRA-GROUP SERVICES. THE LD. TPO ALSO NOT ACC EPTED THE TAXPAYERS APPROACH AGGREGATING ALL THE INTERNATION AL TRANSITIONS FOR BENCHMARKING AND SOUGHT TO ANALYZE SERVICES TRANSAC TIONS AS A SEPARATE CLASS OF TRANSACTION FOR BENCHMARKING THE SAME. 5. LD. TPO ALSO PREFERRED TO APPLY CUP METHOD FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS AND PRO CEEDED TO CONCLUDE THAT TAXPAYER HAS FAILED TO PROVE THAT THE INTRA-GROUP SERVICES HAVE BEEN AVAILED FROM ITS AE FOR WHICH PA YMENT OF RS.1,06,92,707/- WAS MADE AND THEREBY TAKEN THE ARM S LENGTH PRICE (ALP) OF ALLEGED INTRA-GROUP SERVICES AS NIL AND THEREBY PROPOSED THE ALP ADJUSTMENT AS UNDER :- S.NO. NATURE OF INTERNATIONAL TRANSACTION ALP DETERMINED BY TAXPAYER (RS.) ALP DETERMINED BY THIS OFFICE (RS.) ADJUSTMENT U/S 92CA (RS.) 1. IGS 10,692,707 NIL 10,692,707 TOTAL 10,692,707 6. THE TAXPAYER CARRIED THE MATTER BEFORE THE LD. D RP BY RAISING OBJECTIONS WHO HAS UPHELD THE ALP ADJUSTMENT PROPOS ED BY THE ITA NO.3218/DEL./2015 6 TPO BY DISMISSING ALL THE OBJECTIONS. FEELING AGGR IEVED, THE TAXPAYER HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 7. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. UNDISPUTEDLY, THE TAXPAYER HAS BEEN MAKING PAYME NT OF MANAGEMENT FEE FOR INTRA GROUP SERVICES TO ITS ASSO CIATED ENTERPRISES (AES) SINCE AY 2008-09 AND THE LD. TPO IN EARLIER ASSESSMENT YEARS I.E. 2008-09 & 2009-10 AND SUBSEQU ENT ASSESSMENT YEARS 2011-12 & 2012-13 HAS HELD THE PAY MENTS OF MANAGEMENT FEE SERVICES BY THE TAXPAYER TO ITS AE A T ARMS LENGTH IN TERMS OF AGREEMENT OF 2004. IT IS ALSO NOT IN D ISPUTE THAT THE PRICE FOR INTRA-GROUP SERVICES WAS CHARGED AT COST PLUS MARK-UP OF 6%. IT IS ALSO NOT IN DISPUTE THAT SERVICES RENDER ED BY THE AE DURING THE YEAR UNDER ASSESSMENT ARE SIMILAR AND UN DER THE SAME AGREEMENT. IT IS ALSO NOT IN DISPUTE THAT THE QUAN TUM OF PAYMENT OF MANAGEMENT FEE CONSTITUTES ONLY 1.39% OF THE TOTAL TURNOVER OF THE TAXPAYER. IT IS ALSO NOT IN DISPUTE THAT THE TAXPA YERS TURNOVER HAS INCREASED FIVE TIMES IN THE LAST FIVE YEARS. ITA NO.3218/DEL./2015 7 9. WHEN WE EXAMINE THE FINDINGS RETURNED BY THE TPO CONTAINED IN PARAS 9.1 & 9.4 OF THE TP ORDER IN THE BACKDROP OF THE AFORESAID UNDISPUTED FACTS, HE HAS MERELY BASED HIS FINDINGS ON THE REASONS INTER ALIA THAT THE TAXPAYER HAS FAILED TO PROVE THAT THE SERVICES HAVE BEEN ACTUALLY RENDERED AND ANY BENEFI T HAS BEEN DERIVED BY THE TAXPAYER; THAT SERVICES RECEIVED ARE INCIDENTAL IN THE NATURE DUE TO LONG ASSOCIATION; THAT THE TAXPAYER D ID NOT FILE ANY EVIDENCE TO SUPPORT ITS CLAIM THAT THE SERVICES WER E ACTUALLY PROVIDED; THAT UNDER UNCONTROLLED CIRCUMSTANCES, AN Y INDEPENDENT ENTERPRISE HAVING SKILLED AND SUFFICIENTLY TRAINED MANPOWER WOULD NOT HAVE WILLINGLY PAID FOR SUCH SERVICES TO THE TH IRD PARTY; THAT PAYMENT FOR LIAISON SERVICES ALLEGEDLY PROVIDED BY AE ARE NOT AT ALP NOR THE TAXPAYER HAS CONDUCTED FAR ANALYSIS WIT H REGARD TO THE ALLEGED SERVICES NOR CARRIED OUT ANY COST BENEF IT ANALYSIS AT THE TIME OF REQUISITIONING THE SO CALLED SERVICES. 10. IT IS THE CASE OF THE TAXPAYER THAT IT HAD RECE IVED SUPPORT SERVICES FROM ITS AE AS PER AGREEMENT AT THE FEE EQ UIVALENT TO A PRORATA SHARE OF THE DEFINED POOLS OF EXPENSES PROV IDED OR PROCURED BY THE TAXPAYER ON COST PLUS MARKUP OF 6% VIZ. (A) ADMINISTRATIVE COORDINATION SERVICES, PLANNING & STRATEGY AND TRAI NING; AND (B) CONDUCT MARKET RESEARCH. ITA NO.3218/DEL./2015 8 11. LD. AR FOR THE TAXPAYER CHALLENGING THE IMPUGNE D ORDER CONTENDED THAT IN CASE OF ADMINISTRATIVE COORDINATI ON SERVICES, PLANNING AND STRATEGY AND TRAINING RECEIVED BY THE TAXPAYER, THESE SERVICES HAVE BEEN PROVIDED BY THE AE FOR NEW CUSTO MER TENDERS AND SPECIFICATIONS, INTRODUCTION OF NEW PRODUCT, MA RKET ADAPTATION OF PRODUCTS BUILT IN THE US AND EUROPE TO SUIT LOCA L REQUIREMENT ETC. AND THAT SUPPORT TEAM OF AE DOES BUSINESS TRAV EL WITH SALES TEAM IN MEETING SUPPLIERS, RESOLVE QUALITY AND PROD UCTION ISSUES AND IT HAS ALSO PROVIDED TRAINING ON SELLING TECHNI QUES, PRODUCT INFORMATION, MARKET EXPLORATION, CONTRACT NEGOTIATI ONS AND PRICING ETC., FROM WHICH IT HAS DERIVED SUBSTANTIAL BENEFIT S AND DREW OUR ATTENTION TO PAGE 272 OF THE PAPER BOOK VOL.II. 12. WHEN WE EXAMINE PAGE 272 OF PAPER BOOK VOL.II, THE , THE TAXPAYER HAS ELABORATED THE BENEFIT RECEIVED. THE TAXPAYER IN ORDER TO PROVE THE RENDERING OF SERVICES AND BENEFITS DER IVED THEREON PRODUCED BEFORE TPO COPY OF ADMINISTRATIVE SERVICE AGREEMENT WITH AES, LETTER FOR REMITTANCE OF MANAGEMENT FEE A LONG WITH DEBIT NOTE, UNDERTAKING, COPY OF CHALLAN, TDS DEPOSITED A ND CERTIFICATE GIVEN BY CHARTERED ACCOUNTANT AND TAXPAYER ALSO BRO UGHT ON RECORD EMAILS REGARDING ARRIVAL AND PROGRAMME SCHED ULE ACCORDING TO WHICH EXPERTS ARRIVED IN IT AND PROVIDED SERVICE S TO THE TAXPAYER AND THEY HAVE ALSO GIVEN DIFS EXPANSION PRESENTATIO N, POWER POINT ITA NO.3218/DEL./2015 9 PRESENTATION, FLIGHT DETAILS OF VISITORS AND MEETIN G, MAILS AND REPORTS IN RELATION TO INTERNAL AUDIT FOR EXPANSION , EXPANSION PROJECT, PROCUREMENT AND HUMAN RESOURCES PROCESS RE VIEW OF THE TAXPAYER. 13. SO FAR AS QUESTION OF AVAILING SERVICES AS TO C ONDUCTING MARKETING RESEARCH FROM ITS AE IS CONCERNED, SINCE THE TAXPAYER IS INTO SALE OF PRODUCT BY MANUFACTURE, MARKET RESEARC H FOR THE DEMAND OF SUCH PRODUCT, SALE FORECAST AND INVENTORY LEVEL REQUIREMENT IS NECESSARY. SO, IT CANNOT BE DENIED THAT MARKET RESEARCH SERVICES ARE OF NO BENEFITS TO THE TAXPAYE R OPERATING IN INDIA AS THE SALE HAS BEEN INCREASED FIVE TIMES DUR ING THE LAST FIVE YEARS. THE TAXPAYER HAS EXPLAINED THE SERVICES REN DERED AND BENEFIT DERIVED AT PAGES 272 AND 273 OF THE PAPER B OOK VOL.II. 14. SO FAR AS QUESTION OF RENDERING INFORMATION TEC HNOLOGY SUPPORT SERVICES ARE CONCERNED, IT IS THE CASE OF T HE TAXPAYER THAT AE HAS PROVIDED SERVICES OF INFORMATION TECHNOLOGY SUPPORT SERVICES, SOX COMPLIANCE, CONTROLLED ENVIRONMENT, O RGANIZATION AND ADMINISTRATIVE AND INTERNAL AUDIT IN CONJUNCTIO N WITH THE BUSINESS OF THE TAXPAYER AND HAS DERIVED BENEFIT OT HERWISE THE TAXPAYER WOULD HAVE TO HIRE A THIRD PARTY FOR AVAIL ING SUCH SERVICES NECESSARY TO RUN THE BUSINESS IN ORDER TO RESOLVE VARIOUS ISSUES. ITA NO.3218/DEL./2015 10 15. THE LD. TPO HELD THAT THE TAXPAYER HAS NOT PROV ED AS TO HOW THESE SERVICES WERE USEFUL AND THAT THE SERVICES AP PEARED TO BE VERY GENERIC IN NATURE AND ARE IN THE NATURE OF SHAREHOL DER SERVICES NOR ANY COST BENEFIT ANALYSIS PROVIDED BY THE TAXPAYER. 16. WHEN WE EXAMINE THE REASONS GIVEN BY LD. TPO FO R DECLINING THE CONTENTIONS OF THE TAXPAYER FOR RENDE RING SUCH SERVICES BY THE AE AND TAKING BENEFIT THEREFROM BY THE TAXPAYER IN THE LIGHT OF THE FACT THAT ITS INTRA-GROUP CHARGES ARE MERELY 1.39% OF THE TOTAL TURNOVER WHICH HAS BEEN INCREASED FIVE TI MES WITHIN LAST FIVE YEARS AND THE TAXPAYER IS A SUBSIDIARY OF DONA LDSON COMPANY INC., USA, ITS AE, AND IS INTO MANUFACTURING AND MA RKETING OF AIR FILTRATION SYSTEMS, ETC., WITHOUT THESE SERVICES 5 TIMES INCREASE IS NOT POSSIBLE. MOREOVER, ALL THE SERVICES ARE BEING RENDERED AS PER AGREEMENT OF 2004 AND SINCE THEN FACTS HAVE NOT BEE N CHANGED. MERELY BECAUSE OF THE FACT THAT THE PAYMENT ON ACCO UNT OF MANAGEMENT FEE / INTRA-GROUP SERVICES IS INCREASING EVERY YEAR, THE CASE OF THE TAXPAYER CANNOT BE FALSIFIED AS IT IS T O BE SEEN IN THE LIGHT OF THE FACT THAT IF PAYMENT OF SERVICES HAS B EEN INCREASING THE TURNOVER HAS ALSO BEEN INCREASING. 17. MOREOVER, IT IS THE CASE OF THE TAXPAYER THAT PAYMENT HAS BEEN MADE FOR BENEFICIAL SERVICES AS PER OECD GUIDE LINES OF 2010 TO CATER THE SPECIFIC NEEDS OF THE TAXPAYER NECESSA RY FOR BUSINESS OF ITA NO.3218/DEL./2015 11 THE TAXPAYER IN INDIA. MOREOVER, HAD THESE SERVICE S BEEN AVAILED OF BY THE TAXPAYER FROM A THIRD PARTY, IT WOULD HAVE E NTAILED MORE COST. 18. MOREOVER REVENUE OFFICER CANNOT DECIDE WHILE SI TTING ON THE ARMCHAIR OF A BUSINESSMAN TO DECIDE AS TO WHAT SERVICES ARE REQUIRED. SO FAR AS QUESTION OF DERIVING THE BENEF IT OF SUCH SERVICES IS CONCERNED, BENEFIT MAY ALWAYS NOT BE THE RESULT OF ANY BUSINESS DECISION. BUT, IN THE INSTANT CASE, THE TAXPAYER H AS EXPLAINED THE BENEFITS DERIVED FROM RENDERING OF SERVICES BY THE AE. 19. FURTHERMORE, WHEN IT IS NOT IN DISPUTE THAT THE BUSINESS MODEL OF THE TAXPAYER HAS NOT UNDERGONE ANY CHANGE SINCE 2004 AND PAYMENT OF INTRA-GROUP SERVICES HAVE BEEN FORME D TO BE AT ARMS LENGTH BY THE REVENUE BY PASSING DETAILED ORD ER BY THE TPO FOR AYS 2008-009, 2009-10, 2011-12 AND 2012-13, AVA ILABLE AT PAGES 129 TO 136 OF CASE LAW PAPER BOOK, NO REASON WHATSOEVER HAS BEEN GIVEN BY THE LD. TPO TO DEPART FROM THE RU LE OF CONSISTENCY. NO DOUBT, PRINCIPLE OF RES JUDICATA I S NOT ATTRACTED TO THE INCOME-TAX MATTER BUT WHEN THE BUSINESS MODEL H AS NOT UNDERGONE ANY CHANGE AND FACTS AND CIRCUMSTANCES AR E IDENTICAL RULE OF CONSISTENCY IS REQUIRED TO BE MAINTAINED AS HAS BEEN HELD BY HONBLE APEX COURT IN RADHASOAMI SATSANG VS. CIT - 193 ITR 321. ITA NO.3218/DEL./2015 12 20. WHEN WE EXAMINED TP ORDER FOR AY 2011-12 AND 20 12-13, AVAILABLE AT PAGES 133 TO 136 OF THE CASE LAW PAPER BOOK, PAYMENT OF INTRA-GROUP CHARGES TO THE TUNE OF RS.1, 26,97,965 AND RS.1,56,08,715/- RESPECTIVELY HAVE BEEN HELD TO BE ARMS LENGTH AS PER TP ANALYSIS CONDUCTED BY THE TAXPAYER. SO, IT CANNOT BE HELD THAT SINCE PAYMENT OF INTRA-GROUP SERVICES IS INCRE ASING DAY BY DAY, IT LEADS TO PROFIT SHIFTING. 21. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT ISSUE AT HAND IS REQUIRED TO B E REMITTED BACK TO THE TPO/AO TO DECIDE AFRESH IN THE LIGHT OF THE OBSERVATION MADE HEREIN BEFORE AND IN VIEW OF THE ORDER PASSED BY LD. TPO IN PRECEDING AND SUCCEEDING YEARS. CONSEQUENTLY, THE APPEAL FILED BY THE TAXPAYER IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 3 RD DAY OF OCTOBER, 2018. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 3 RD DAY OF OCTOBER , 2018 TS ITA NO.3218/DEL./2015 13 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A) 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.