Cook India Medical Devices Private Limited, CHENNAI V. DCIT Corporate Circle 1(2), CHENNAI

ITTPA 22/CHNY/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2691 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 25-09-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: D
• Next Hearing Date: 25-09-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 28-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 92CA

Judgement Text

आयकर अपीलीय अिधकरण ‘डी’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI माननीय ,ी महावीर िसंह, उपा23 एवं माननीय ,ी मनोज कु मार अ8वाल ,लेखा सद; के सम3। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ IT(TP) No.22/Chny/2019 (िनधाCरण वषC / Assessment Year: 2012-13) Cook India Medical Devices Pvt. Ltd. 4/249A, Rasim Enclave, Poonamallee High Road, Near Savitha Dental College, Goparasanallur, Kattupakkam, Chennai – 600 056. बनाम/ V s . DCIT Corporate Circle -1(2), Chennai. थायी लेखा सं. /जीआइ आर सं. /P AN / G I R No . AACC C- 7 6 2 8 - P (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Appellant by : Shri Vikram Vijayaraghavan (Advocate) – Ld. AR थ की ओरसे/Respondent by : Ms. Ann L Kapthuama (CIT) –Ld. DR सुनवाई की तारीख/D a t e of He a r i n g : 26-09-2022 घोषणा की तारीख /Date of Pronouncement : 26-09-2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2012-13 arises out of final assessment order passed by learned Assessing Officer (AO) on 29.12.2018 u/s 143(3) rws 92CA pursuant to the directions of Ld. DRP u/s 144C(5) dated 06.12.2018. The assessee being resident corporate assessee is stated to be engaged in manufacturing of medical devices. In this appeal, the assessee is IT(TP)A No.22/Chny/2019 - 2 - aggrieved by Transfer Pricing Adjustment of Rs.226.95 Lacs as proposed by learned Transfer Pricing Officer in its order dated 29.12.2015. The Ld. TPO has determined the value of Support fees services as received by the assessee as nil and proposed adjustment of Rs.265.83 Lacs. The Ld. DRP allowed part relief and directed Ld. AO to reduce the adjustment to Rs.226.95 Lacs. Aggrieved, the assessee is in further appeal before us. 2. The Ld. AR, at the outset, submitted that such services were received in subsequent years also and the assessee entered into Advance pricing Agreement (APA) with Hon’ble CBDT on 31.03.2021. The terms of the agreement apply to previous years 2014-15 to 2018- 19. The Ld AR pleaded that the adjustment may be re-computed for this year on the same basis. The Ld. CIT-DR submitted that the APA is only for subsequent years. 3. Considering the fact that the nature of services remain the same and the services emanates from same agreements, the bench has an opinion that the same benchmarking formula as prescribed for subsequent years could be applied for this year also to arrive at Arm’s Length price (ALP) of the impugned transactions. Accordingly, we direct Ld. AO to re-compute the adjustment on the same basis as given in APA. The assessee has provided the working of the same which is as under: - Particulars Reference Amount (in INR) Actual cost incurred for intra-group services by assessee (consisting of internal costs & pass-through costs, benchmarked using TNMM) A 2,65,83,539 TPO adjustment (benchmarked using CUP and setting ALP as NIL) i.e., ENTIRE costs of intra-group services were disallowed by TPO B 2,65,83,539 IT(TP)A No.22/Chny/2019 - 3 - DRP adjustment (partial relief of Rs.38,88,487/- based on certain invoices) 2,26,95,052 Total costs of intra-group services as per APA clause 6.2 (5% mark-up on operating cost; computed as internal cost actuals of Rs.2,37,95,144 + pass-through costs of Rs.8,84,783) C 2,59,13,924 Revised TPO adjustment (on applying APA) – our prayer is this may be verified and given by the AO/TPO D = C-A 6,69,615 The Ld. AO is directed to verify the same and restrict the adjustment to the extent indicated in the table. No other ground has been urged before us. 4. The appeal stand partly allowed for statistical purposes. Order pronounced on 26 th September, 2022. Sd/- (MAHAVIR SINGH) उपा23 /VICE PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद; / ACCOUNTANT MEMBER चे*ई / Chennai; िदनांक / Dated : 26.09.2022 JPV JPVJPV JPV आदेश की Wितिलिप अ 8ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आयु (अपील)/CIT(A) 4. आयकर आयु /CIT 5. िवभागीय ितिनिध/DR 6. गाड फाईल/GF