M/S. PLINTRON MOBILITY SOLUTIONS PVT. LTD.,KANCHIPURAM V. DCIT, CORPORATE CIRCLE-1 (LTU), RANGE-801, CHENNAI

ITTPA 120/CHNY/2024

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The case involves M/s. Plintron Mobility Solutions Pvt. Ltd., which appealed against the order of the Deputy Commissioner of Income Tax concerning the assessment year 2021-2022. The primary issues in the appeal were the disallowance of business and management consultancy fees and the recharacterization of outstanding trade receivables as a separate international transaction. The Tribunal found that the business and management consultancy services were integral to the assessee's operations and should be benchmarked under the Transactional Net Margin Method (TNMM). Regarding the outstanding receivables, the Tribunal directed the use of average LIBOR for interest computation, aligning with precedents set in similar cases.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 825309 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 31-12-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2021-2022
• Appeal Filed On: 20-12-2024
• Other Referred Cases: M/s. Siemens Gamesa Renewable Power Private Limited Vs DCIT [ITA No. 1420 & 376/Mds/2017], M/s. Doowon Automotive Systems India Private Limited vs DCIT [IT(TP)A No. 88/Chny/2024], M/s. Acqueon Technologies Pvt Ltd vs DCIT [IT(TP)A Nos: 34 & 115/Chny/2024]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARV SREENIVASAN
• Assessee Lawyers: S.P.CHIDAMBARAM
• Keywords: Additional evidence; Transfer pricing; International transaction; Corroborative evidences; Notional interest
• Section: 143(3); 92B; 10B

Judgement Text

"आयकर अपीलीय अिधकरण, ’ड ’ \u000eयायपीठ, चे\u000eनई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI \u0001ी मनु क ुमार िग र, \u000eाियक सद\u0012 एवं \u0001ी एस. आर. रघुनाथा, लेखा सद\u0012 क े सम BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S.R.RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./IT(TP)A No.120/Chny/2024 िनधा\u0018रण वष\u0018/Assessment Year: 2021-22 M/s. Plintron Mobility Solutions Pvt. Ltd., 3rd Floor, GKS Tech Park 1/24, Shivaji Garden, DLF IT SEZ, Nandambakkam, Kudiyiruppu S.O., Kanchipuram – 600 089. [PAN: AAFCP 6213L] Vs. The Dy. Commissioner of Income Tax, Corporate Circle-1 (LTU), Range – 801, Chennai. (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : Mr. S.P. Chidambaram, Advocate यथ क ओर से /Respondent by : Mr. ARV Sreenivasan, CIT सुनवाईक तार ख/Date of Hearing : 13.10.2025 घोषणाक तार ख /Date of Pronouncement : 31.12.2025 आदेश / O R D E R PER MANU KUMAR GIRI, JM: The present appeal has been filed by the Assessee against the order passed by the Deputy Commissioner of Income Tax, Corporate Circle–1 (LTU), Range 801, Chennai, under sections 143(3) read with 144C(13) and 144B of the Income Tax Act, 1961 (“the Act”), vide order dated 25.10.2024, relating to the assessment year 2021–2022. 2. The Concise Grounds of Appeal filed by Assessee before us is reproduced hereunder: 2.1 “ The AO / TPO / DRP erred in considering the payment of Business and Management consultancy fee as \"Nil\". Printed from counselvise.com 2.2 The AO / TPO / DRP erred in concluding the Business and Management consultancy services received from the AE as shareholder activities without taking cognizance of the fact that AE does not own any shareholding in Assessee company. 2.3 The AO / TPO / DRP erred in not appreciating the benefit received by the As management consultancy services availed from AE. 2.4 The AO / TPO / DRP erred in not appreciating the email evidences produced by the Assessee to substantiate that the Business and Management consultancy services were receiv 2.5 The AO / TPO / DRP erred in not adopting the correct method as prescribed in Rule 10B of the income tax rules, 1962. 2.6 The AO / TPO / DRP erred in not appreciating the fact the Business and Management Consultancy services are inextricably linked to t be aggregated and benchmarked using Transactional Net Margin Method ('TNMM' Upward adjustment towards Interest income from outstanding receivables 3.1 The AO / TPO / DRP erred in not providing any cogent reasons for adopting LIBOR plus 350 BPS for computing notional interest on outstanding receivables. 3.2 The AO / DRP erred in in law and on facts by adding a spread of 100 basis points over and above the LIBOR plus 350 basis points which was adopted by the TPO.” 3. Before moving ahead, it is considered appropriate to briefly summarize the factual background of the case. The Assessee is engaged in the business of providing development and maintenance services for telecom software solutions. 2 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. The AO / TPO / DRP erred in concluding the Business and Management consultancy services received from the AE as shareholder activities without taking cognizance of the fact that AE does not own any shareholding in Assessee company. The AO / TPO / DRP erred in not appreciating the benefit received by the Assessee on account of business and management consultancy services availed from AE. The AO / TPO / DRP erred in not appreciating the email evidences produced by the Assessee to substantiate that the Business and Management consultancy services were receiv The AO / TPO / DRP erred in not adopting the correct method as prescribed in Rule 10B of the income tax rules, 1962. The AO / TPO / DRP erred in not appreciating the fact the Business and Management Consultancy services are inextricably linked to the core operations of Assessee and as such be aggregated and benchmarked using Transactional Net Margin Method ('TNMM') Upward adjustment towards Interest income from outstanding receivables The AO / TPO / DRP erred in not providing any cogent for adopting LIBOR plus 350 BPS for computing notional interest on outstanding receivables. The AO / DRP erred in in law and on facts by adding a spread of 100 basis points over and above the LIBOR plus 350 basis points which was adopted by the TPO.” Before moving ahead, it is considered appropriate to briefly summarize the factual background of the case. The Assessee is engaged in the business of providing development and maintenance services for telecom software solutions. IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. The AO / TPO / DRP erred in concluding the Business and Management consultancy services received from the AE as shareholder activities without taking cognizance of the fact that AE The AO / TPO / DRP erred in not appreciating the sessee on account of business and The AO / TPO / DRP erred in not appreciating the email evidences produced by the Assessee to substantiate that the Business and Management consultancy services were received. The AO / TPO / DRP erred in not adopting the correct method as prescribed in Rule 10B of the income tax rules, 1962. The AO / TPO / DRP erred in not appreciating the fact the Business and Management Consultancy services are he core operations of Assessee and as such be aggregated and benchmarked using Transactional Net Margin Upward adjustment towards Interest income from The AO / TPO / DRP erred in not providing any cogent for adopting LIBOR plus 350 BPS for computing notional The AO / DRP erred in in law and on facts by adding a spread of 100 basis points over and above the LIBOR plus 350 Before moving ahead, it is considered appropriate to briefly summarize the factual background of the case. The Assessee is engaged in the business of providing development and maintenance services for Printed from counselvise.com 3.1 During the assess international transactions with its Associated Enterprises (AEs) relating to the development and maintenance of telecom software, as well as the receipt of business and management consultancy services. The Learn Authorized Representative (Ld. AR) submitted that the Assessee had adopted the Transactional Net Margin Method (TNMM) as the most appropriate method for benchmarking these international transactions and had reported a margin of 18.56%, as compared to th comparable companies ranging from 11.68% to 16.78%, with a median of 13.50%. During the proceedings before the lower authorities, the Transfer Pricing Officer (TPO), vide order dated 06.10.2023, conducted a fresh search and introduced twe the TPO recomputed the Assessee’s margin at 12.04% in comparison with sixteen comparable companies whose margins ranged from 17.08% to 27.31%, with a median of 22.175%, and proposed an upward adjustment of Rs.4,20,19,530/-. Apart from the impugned primary adjustment, the Ld. TPO also disallowed the business and management consultancy fee amounting to Rs.17,16,26,011/ aggregated and benchmarked under TNMM, but was required to be excluded and examined on a standalone basis under the “Other Method.” 3 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. the assessment year 2021-22, the Assessee entered into international transactions with its Associated Enterprises (AEs) relating to the development and maintenance of telecom software, as well as the receipt of business and management consultancy services. The Learn Authorized Representative (Ld. AR) submitted that the Assessee had adopted the Transactional Net Margin Method (TNMM) as the most appropriate method for benchmarking these international transactions and had reported a margin of 18.56%, as compared to the margins of nine comparable companies ranging from 11.68% to 16.78%, with a median of During the proceedings before the lower authorities, the Transfer Pricing Officer (TPO), vide order dated 06.10.2023, conducted a fresh search and introduced twelve new comparable companies. Consequently, the TPO recomputed the Assessee’s margin at 12.04% in comparison with sixteen comparable companies whose margins ranged from 17.08% to 27.31%, with a median of 22.175%, and proposed an upward adjustment of Apart from the impugned primary adjustment, the Ld. TPO also disallowed the business and management consultancy fee 17,16,26,011/-, holding that the same could not be aggregated and benchmarked under TNMM, but was required to be excluded and examined on a standalone basis under the “Other Method.” IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. 22, the Assessee entered into international transactions with its Associated Enterprises (AEs) relating to the development and maintenance of telecom software, as well as the receipt of business and management consultancy services. The Learned Authorized Representative (Ld. AR) submitted that the Assessee had adopted the Transactional Net Margin Method (TNMM) as the most appropriate method for benchmarking these international transactions and e margins of nine comparable companies ranging from 11.68% to 16.78%, with a median of During the proceedings before the lower authorities, the Transfer Pricing Officer (TPO), vide order dated 06.10.2023, conducted a fresh lve new comparable companies. Consequently, the TPO recomputed the Assessee’s margin at 12.04% in comparison with sixteen comparable companies whose margins ranged from 17.08% to 27.31%, with a median of 22.175%, and proposed an upward adjustment of Apart from the impugned primary adjustment, the Ld. TPO also disallowed the business and management consultancy fee , holding that the same could not be aggregated and benchmarked under TNMM, but was required to be excluded and examined on a standalone basis under the “Other Method.” Printed from counselvise.com Additionally, the TPO made an upward adjustment of account of interest on outstanding receivables. 3.2 A draft assessment order dated 24.12.2023 was passed by the Assessing Officer incorporating the transfer pricing adjustments. The Assessee filed objections before the Dispute Resolution Panel (DRP), which, vide its directions dated 26.09.2024, upheld the action of the Transfer Pricing Officer (TPO) with respect to and management consultancy fees and also directed the re the filters applied, with consequential inclusion or exclusion of the comparable companies sought to be considered. 3.3. Further, the DRP directed the TPO points over and above LIBOR plus 350 basis points, which had earlier been adopted by the TPO, for the purpose of computing interest on outstanding receivables. Pursuant to the DRP’s directions, the TPO recomputed the filters and included the comparables proposed by the Assessee, resulting in the Assessee’s margin of 12.04% falling within the arm’s length range of margins earned by comparable companies, which ranged from 5.92% to 28.56%, with a median of 19.36%. Consequently, 4 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. Additionally, the TPO made an upward adjustment of account of interest on outstanding receivables. A draft assessment order dated 24.12.2023 was passed by the Assessing Officer incorporating the transfer pricing adjustments. The Assessee filed objections before the Dispute Resolution Panel (DRP), which, vide its directions dated 26.09.2024, upheld the action of the Transfer Pricing Officer (TPO) with respect to the disallowance of business and management consultancy fees and also directed the re the filters applied, with consequential inclusion or exclusion of the comparable companies sought to be considered. Further, the DRP directed the TPO to apply an additional 100 basis points over and above LIBOR plus 350 basis points, which had earlier been adopted by the TPO, for the purpose of computing interest on outstanding receivables. Pursuant to the DRP’s directions, the TPO recomputed the s and included the comparables proposed by the Assessee, resulting in the Assessee’s margin of 12.04% falling within the arm’s length range of margins earned by comparable companies, which ranged from 5.92% to 28.56%, with a median of 19.36%. Consequently, the entire adjustment IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. Additionally, the TPO made an upward adjustment of Rs.48,736/- on A draft assessment order dated 24.12.2023 was passed by the Assessing Officer incorporating the transfer pricing adjustments. The Assessee filed objections before the Dispute Resolution Panel (DRP), which, vide its directions dated 26.09.2024, upheld the action of the the disallowance of business and management consultancy fees and also directed the re-computation of the filters applied, with consequential inclusion or exclusion of the to apply an additional 100 basis points over and above LIBOR plus 350 basis points, which had earlier been adopted by the TPO, for the purpose of computing interest on outstanding receivables. Pursuant to the DRP’s directions, the TPO recomputed the s and included the comparables proposed by the Assessee, resulting in the Assessee’s margin of 12.04% falling within the arm’s length range of margins earned by comparable companies, which ranged from 5.92% to the entire adjustment Printed from counselvise.com proposed in the original transfer pricing order in respect of the overall entity stood deleted. 3.4 However, the adjustment on account of interest on outstanding receivables was enhanced to order dated 25.10.2023 was passed by the Assessing Officer confirming the adjustment of Rs. assessment order, the Assessee has preferred the present appeal before us. 4. The first issue raised by the Assessee to 2.6 pertains to the disallowance of business and management consultancy charges. The Learned Authorized Representative (Ld. AR) submitted that the Transfer Pricing Officer (TPO) disallowed the said charges on the ground tha stewardship activities. The Ld. TPO further observed that email correspondences could not be regarded as sufficient evidence of receipt of services and that the Assessee had failed to furnish adequate documentation to substantiate the receipt of such services. Consequently, the TPO segregated this transaction and benchmarked it separately under the “Other Method.” 5 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. proposed in the original transfer pricing order in respect of the overall entity However, the adjustment on account of interest on outstanding receivables was enhanced to Rs.56,554/-. Thereafter, the final assessme order dated 25.10.2023 was passed by the Assessing Officer confirming Rs.17,16,82,565/-. Aggrieved by the said final assessment order, the Assessee has preferred the present appeal before The first issue raised by the Assessee in grounds of appeal Nos. 2.1 to 2.6 pertains to the disallowance of business and management consultancy charges. The Learned Authorized Representative (Ld. AR) submitted that the Transfer Pricing Officer (TPO) disallowed the said charges on the ground that the services received were in the nature of stewardship activities. The Ld. TPO further observed that email correspondences could not be regarded as sufficient evidence of receipt of services and that the Assessee had failed to furnish adequate tion to substantiate the receipt of such services. Consequently, the TPO segregated this transaction and benchmarked it separately under IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. proposed in the original transfer pricing order in respect of the overall entity However, the adjustment on account of interest on outstanding . Thereafter, the final assessment order dated 25.10.2023 was passed by the Assessing Officer confirming . Aggrieved by the said final assessment order, the Assessee has preferred the present appeal before in grounds of appeal Nos. 2.1 to 2.6 pertains to the disallowance of business and management consultancy charges. The Learned Authorized Representative (Ld. AR) submitted that the Transfer Pricing Officer (TPO) disallowed the said t the services received were in the nature of stewardship activities. The Ld. TPO further observed that email correspondences could not be regarded as sufficient evidence of receipt of services and that the Assessee had failed to furnish adequate tion to substantiate the receipt of such services. Consequently, the TPO segregated this transaction and benchmarked it separately under Printed from counselvise.com The Dispute Resolution Panel (DRP) upheld the action of the TPO in treating the business and manage the Assessee as stewardship activities and in carrying out a separate benchmarking of the transaction under the Other Method. 4.1 The Learned Authorized Representative (Ld. AR) contended that the business and management consultancy charges ought not to be benchmarked separately, as they had already been benchmarked under the TNMM. It was submitted that the business and management consultancy services received by the Assessee were primarily in the nature of operational assistance and strategic support, which provided substantial benefit to the Assessee. In support of this contention, the Ld. AR placed on record a detailed note outlining the various services received by the Assessee, which is reproduced below: • International Business Development: Assessee in expanding its international operations by conducting detailed market research, assessing market potential, formulating market entry strategies, identifying strategic partners for bus specific jurisdictions, and preparing business plans for feasible markets. • Global Marketing: through global marketing initiatives, including digital marketing, campaigns, trade shows, and event sponsors help generate leads, devise marketing strategies, analyze competitors, form new alliances, and integrate new technology products. • Global Legal and Compliance: complies with regulatory requiremen jurisdictions. It includes reviewing and approving contracts with third 6 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. The Dispute Resolution Panel (DRP) upheld the action of the TPO in treating the business and management consultancy services received by the Assessee as stewardship activities and in carrying out a separate benchmarking of the transaction under the Other Method. The Learned Authorized Representative (Ld. AR) contended that the management consultancy charges ought not to be benchmarked separately, as they had already been benchmarked under the TNMM. It was submitted that the business and management consultancy services received by the Assessee were primarily in the nature ational assistance and strategic support, which provided substantial benefit to the Assessee. In support of this contention, the Ld. AR placed on record a detailed note outlining the various services received by the Assessee, which is reproduced below: International Business Development: This service supports the Assessee in expanding its international operations by conducting detailed market research, assessing market potential, formulating market entry strategies, identifying strategic partners for bus specific jurisdictions, and preparing business plans for feasible Global Marketing: This involves promoting the Assessee’s brand through global marketing initiatives, including digital marketing, campaigns, trade shows, and event sponsorships. These activities help generate leads, devise marketing strategies, analyze competitors, form new alliances, and integrate new technology products. Global Legal and Compliance: This service ensures that the Assessee complies with regulatory requirements across all operational jurisdictions. It includes reviewing and approving contracts with third IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. The Dispute Resolution Panel (DRP) upheld the action of the TPO in ment consultancy services received by the Assessee as stewardship activities and in carrying out a separate The Learned Authorized Representative (Ld. AR) contended that the management consultancy charges ought not to be benchmarked separately, as they had already been benchmarked under the TNMM. It was submitted that the business and management consultancy services received by the Assessee were primarily in the nature ational assistance and strategic support, which provided substantial benefit to the Assessee. In support of this contention, the Ld. AR placed on record a detailed note outlining the various services received by the This service supports the Assessee in expanding its international operations by conducting detailed market research, assessing market potential, formulating market entry strategies, identifying strategic partners for business in specific jurisdictions, and preparing business plans for feasible This involves promoting the Assessee’s brand through global marketing initiatives, including digital marketing, hips. These activities help generate leads, devise marketing strategies, analyze competitors, form new alliances, and integrate new technology products. This service ensures that the Assessee ts across all operational jurisdictions. It includes reviewing and approving contracts with third Printed from counselvise.com parties (such as suppliers, customers, and affiliates), providing advice on legal terms, and offering legal support in dealings with customers or regulatory authorities. • Technology-Related Strategic Services: strategic guidance on acquiring, allocating, and managing technology resources to meet business objectives and customer needs. It includes identifying and addressing the Assessee’s requirements, benchmarking against industry best practices, and supporting the conversion of leads into business opportunities. 4.2 The Learned Authorized Representative (Ld. AR) for the Assessee reiterated that the business and management consu received are high-value, core management services that significantly contribute to the Assessee’s business growth, revenue, and profitability. The Associated Enterprises (AEs) leverage their global reputation and customer/vendor relationshi expertise, thereby helping the Assessee secure projects and enhance financial performance. The Ld. AR argued that, since these services are closely integrated with the Assessee’s operations, determining the Arm’s Length Price (ALP) on an aggregate basis using TNMM is more appropriate, and therefore, these services cannot be segregated and benchmarked independently. 4.3 The Ld. AR further relied on the decision of the jurisdictional Tribunal in M/s. Siemens Gamesa R No. 1420 & 376/Mds/2017] 7 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. parties (such as suppliers, customers, and affiliates), providing advice on legal terms, and offering legal support in dealings with customers or uthorities. Related Strategic Services: This involves providing strategic guidance on acquiring, allocating, and managing technology resources to meet business objectives and customer needs. It includes identifying and addressing the Assessee’s requirements, benchmarking against industry best practices, and supporting the conversion of leads into business opportunities. The Learned Authorized Representative (Ld. AR) for the Assessee reiterated that the business and management consu value, core management services that significantly contribute to the Assessee’s business growth, revenue, and profitability. The Associated Enterprises (AEs) leverage their global reputation and customer/vendor relationships to identify new clients and share their expertise, thereby helping the Assessee secure projects and enhance financial performance. The Ld. AR argued that, since these services are closely integrated with the Assessee’s operations, determining the Arm’s Length Price (ALP) on an aggregate basis using TNMM is more appropriate, and therefore, these services cannot be segregated and benchmarked independently. The Ld. AR further relied on the decision of the jurisdictional Tribunal M/s. Siemens Gamesa Renewable Power Private Limited Vs DCIT [ITA No. 1420 & 376/Mds/2017], where a co-ordinate bench ruled as follows: IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. parties (such as suppliers, customers, and affiliates), providing advice on legal terms, and offering legal support in dealings with customers or This involves providing strategic guidance on acquiring, allocating, and managing technology resources to meet business objectives and customer needs. It includes identifying and addressing the Assessee’s technology requirements, benchmarking against industry best practices, and supporting the conversion of leads into business opportunities. The Learned Authorized Representative (Ld. AR) for the Assessee reiterated that the business and management consultancy services value, core management services that significantly contribute to the Assessee’s business growth, revenue, and profitability. The Associated Enterprises (AEs) leverage their global reputation and ps to identify new clients and share their expertise, thereby helping the Assessee secure projects and enhance financial performance. The Ld. AR argued that, since these services are closely integrated with the Assessee’s operations, determining the Arm’s Length Price (ALP) on an aggregate basis using TNMM is more appropriate, and therefore, these services cannot be segregated and The Ld. AR further relied on the decision of the jurisdictional Tribunal enewable Power Private Limited Vs DCIT [ITA ordinate bench ruled as follows: Printed from counselvise.com “20.5. We have heard both the parties and perused the material on record. In our considered opinion, transaction to transaction approach is not required if the PLI of the Assessee at entity segment level is at arm’s length where the Assessee company has adopted TNMM for the purpose of benchmarking. Its adoption of CUP solely for the purpose of evaluating technical assistance fee would lead to chaos and be detrimental to the interests of both revenue and the Assessee. In other words, once the arm’s length criterion is tested at entity level, the learned TPO has no jurisdiction to examine the need, benefit etc. in relation to each transaction.” 4.4 The Ld. AR for the Assessee further submitted that the Ld. TPO / DRP in his order has mentioned that e cannot be considered as evidence for demonstrating the receipt of services. Since the Assessee clearly demonstrat through sufficient mail correspondences along with a detailed need, receipt and benefit documentation, the Ld. AR submits that the claim of the Ld. TPO / DRP that e-mail correspondences is erroneous and not tenable. The Assessee submit that all the supporting evidences could not be furnished during the course of TP assessment proceedings on account of paucity of time as various departments were required to be coordinated to secure the said evidences. Now before us, the Assessee ha said additional evidence to substantiate the receipt of business and management consultancy services to strengthen its contention to benchmark the payment of management fees under TNMM. 8 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. 20.5. We have heard both the parties and perused the material on record. In our considered opinion, transaction to transaction not required if the PLI of the Assessee at entity segment level is at arm’s length where the Assessee company has adopted TNMM for the purpose of benchmarking. Its adoption of CUP solely for the purpose of evaluating technical assistance fee chaos and be detrimental to the interests of both revenue and the Assessee. In other words, once the arm’s length criterion is tested at entity level, the learned TPO has no jurisdiction to examine the need, benefit etc. in relation to each transaction.” The Ld. AR for the Assessee further submitted that the Ld. TPO / DRP in his order has mentioned that e-mail correspondences and reports cannot be considered as evidence for demonstrating the receipt of services. Since the Assessee clearly demonstrated the receipt of services through sufficient mail correspondences along with a detailed need, receipt and benefit documentation, the Ld. AR submits that the claim of the Ld. mail correspondences is erroneous and not tenable. The submit that all the supporting evidences could not be furnished during the course of TP assessment proceedings on account of paucity of time as various departments were required to be coordinated to secure the said evidences. Now before us, the Assessee has collated and filed the said additional evidence to substantiate the receipt of business and management consultancy services to strengthen its contention to benchmark the payment of management fees under TNMM. IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. 20.5. We have heard both the parties and perused the material on record. In our considered opinion, transaction to transaction not required if the PLI of the Assessee at entity segment level is at arm’s length where the Assessee company has adopted TNMM for the purpose of benchmarking. Its adoption of CUP solely for the purpose of evaluating technical assistance fee chaos and be detrimental to the interests of both revenue and the Assessee. In other words, once the arm’s length criterion is tested at entity level, the learned TPO has no jurisdiction to examine the need, benefit etc. in relation to each transaction.” The Ld. AR for the Assessee further submitted that the Ld. TPO / mail correspondences and reports cannot be considered as evidence for demonstrating the receipt of ed the receipt of services through sufficient mail correspondences along with a detailed need, receipt and benefit documentation, the Ld. AR submits that the claim of the Ld. mail correspondences is erroneous and not tenable. The submit that all the supporting evidences could not be furnished during the course of TP assessment proceedings on account of paucity of time as various departments were required to be coordinated to secure the s collated and filed the said additional evidence to substantiate the receipt of business and management consultancy services to strengthen its contention to benchmark the payment of management fees under TNMM. Printed from counselvise.com 5. Per contra, the Ld. DR strongly supported the lower authorities. 6. We have considered the rival submissions in light of the materials on record. It is noted that the Assessee is fully dependent on its Associated Enterprise (AE) for business management and consultancy services, for which a fee is payable. Neither the Learn questioned the Assessee’s reliance on its AE for international business development, marketing, legal, and technology Additionally, the Assessee has submitted substantial additional evidence before us to further substantiate the receipt of management services. In the interest of justice and fairness, we remit this issue to the file of the TPO to examine the additional evidence, seek further details if necessary, and benchmark the transaction based on the meth below. The TPO shall provide the Assessee with adequate opportunity to submit the required details or documents. 6.4 Regarding the methodology for benchmarking the management charges, it is noted that the Assessee has aggregated thi benchmarked it under TNMM. The Ld. AR strongly contended that payments for business and management consultancy services are closely 9 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. Per contra, the Ld. DR strongly supported the orders and directions of We have considered the rival submissions in light of the materials on record. It is noted that the Assessee is fully dependent on its Associated Enterprise (AE) for business management and consultancy services, for which a fee is payable. Neither the Learned TPO nor the Learned DRP has questioned the Assessee’s reliance on its AE for international business development, marketing, legal, and technology-related services. Additionally, the Assessee has submitted substantial additional evidence ther substantiate the receipt of management services. In the interest of justice and fairness, we remit this issue to the file of the TPO to examine the additional evidence, seek further details if necessary, and benchmark the transaction based on the methodology outlined by us below. The TPO shall provide the Assessee with adequate opportunity to submit the required details or documents. Regarding the methodology for benchmarking the management charges, it is noted that the Assessee has aggregated thi benchmarked it under TNMM. The Ld. AR strongly contended that payments for business and management consultancy services are closely IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. the orders and directions of We have considered the rival submissions in light of the materials on record. It is noted that the Assessee is fully dependent on its Associated Enterprise (AE) for business management and consultancy services, for ed TPO nor the Learned DRP has questioned the Assessee’s reliance on its AE for international business related services. Additionally, the Assessee has submitted substantial additional evidence ther substantiate the receipt of management services. In the interest of justice and fairness, we remit this issue to the file of the TPO to examine the additional evidence, seek further details if necessary, and odology outlined by us below. The TPO shall provide the Assessee with adequate opportunity to Regarding the methodology for benchmarking the management charges, it is noted that the Assessee has aggregated this transaction and benchmarked it under TNMM. The Ld. AR strongly contended that payments for business and management consultancy services are closely Printed from counselvise.com linked to the Assessee’s business operations and therefore cannot be segregated and benchmarked independen AR relied on the jurisdictional decision in M/s. Doowon Automotive Systems India Private Limited vs DCIT [IT(TP)A No. 88/Chny/2024], which held as follows: “24.0 We have noted that the facts of the present case are akin t those available in judicial precedence discussed herein above and no distinguishment of facts was pointed out by the Revenue. Accordingly, in respectful compliance to the same, we direct the Assessing Officer to aggregate technical fee payments and bench Transactional Net Margin Method (TNMM) after allowing customs duty adjustment, working capital adjustment and treating miscellaneous expenses as operating in nature for the assessee and the comparable companies. In case the assessee’s m there would be no requirement to make separate adjustment for technical fee payments. With these specific directions we remit this issue to the Ld.TPO to redetermine the arm’s length price as per our observations herein above. nos.2.32 to 2.39 are allowed for statistical purposes.” 6.5 We also note the jurisdictional decision relied upon by the Ld. AR in M/s. Siemens Gamesa Renewable Power Private Limited vs DCIT [ITA No. 1420 & 376/Mds/2017], where a co “20.5. We have heard both the parties and perused the material on record. In our considered opinion, transaction to transaction approach is not required if the PLI of the Assessee at entity segment level is at arm’s length where the Assessee company has adopted TNMM for the purpose of benchmarking. Its adoption of CUP solely for the purpose of evaluating technical assistance fee would lead to chaos and be detrimental to the interests of both revenue Assessee. In other words, once the arm’s length criterion is tested at entity level, the learned TPO has no jurisdiction to examine the need, benefit etc. in relation to each transaction.” 10 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. linked to the Assessee’s business operations and therefore cannot be segregated and benchmarked independently. To support this view, the Ld. AR relied on the jurisdictional decision in M/s. Doowon Automotive Systems India Private Limited vs DCIT [IT(TP)A No. 88/Chny/2024], which “24.0 We have noted that the facts of the present case are akin t those available in judicial precedence discussed herein above and no distinguishment of facts was pointed out by the Revenue. Accordingly, in respectful compliance to the same, we direct the Assessing Officer to aggregate technical fee payments and benchmark the same under Transactional Net Margin Method (TNMM) after allowing customs duty adjustment, working capital adjustment and treating miscellaneous expenses as operating in nature for the assessee and the comparable companies. In case the assessee’s margin is at arm’s length then there would be no requirement to make separate adjustment for technical fee payments. With these specific directions we remit this issue to the Ld.TPO to redetermine the arm’s length price as per our observations herein above. Accordingly, all the grounds of appeal nos.2.32 to 2.39 are allowed for statistical purposes.” We also note the jurisdictional decision relied upon by the Ld. AR in M/s. Siemens Gamesa Renewable Power Private Limited vs DCIT [ITA No. , where a co-ordinate bench has held as follows: 20.5. We have heard both the parties and perused the material on record. In our considered opinion, transaction to transaction approach is not required if the PLI of the Assessee at entity segment level is at arm’s length where the Assessee company has adopted TNMM for the purpose of benchmarking. Its adoption of CUP solely for the purpose of evaluating technical assistance fee would lead to chaos and be detrimental to the interests of both revenue Assessee. In other words, once the arm’s length criterion is tested at entity level, the learned TPO has no jurisdiction to examine the need, benefit etc. in relation to each transaction.” IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. linked to the Assessee’s business operations and therefore cannot be tly. To support this view, the Ld. AR relied on the jurisdictional decision in M/s. Doowon Automotive Systems India Private Limited vs DCIT [IT(TP)A No. 88/Chny/2024], which “24.0 We have noted that the facts of the present case are akin to those available in judicial precedence discussed herein above and no distinguishment of facts was pointed out by the Revenue. Accordingly, in respectful compliance to the same, we direct the Assessing Officer mark the same under Transactional Net Margin Method (TNMM) after allowing customs duty adjustment, working capital adjustment and treating miscellaneous expenses as operating in nature for the assessee and the comparable argin is at arm’s length then there would be no requirement to make separate adjustment for technical fee payments. With these specific directions we remit this issue to the Ld.TPO to redetermine the arm’s length price as per our Accordingly, all the grounds of appeal We also note the jurisdictional decision relied upon by the Ld. AR in M/s. Siemens Gamesa Renewable Power Private Limited vs DCIT [ITA No. ordinate bench has held as follows: 20.5. We have heard both the parties and perused the material on record. In our considered opinion, transaction to transaction approach is not required if the PLI of the Assessee at entity segment level is at arm’s length where the Assessee company has adopted TNMM for the purpose of benchmarking. Its adoption of CUP solely for the purpose of evaluating technical assistance fee would lead to chaos and be detrimental to the interests of both revenue and the Assessee. In other words, once the arm’s length criterion is tested at entity level, the learned TPO has no jurisdiction to examine the need, Printed from counselvise.com 6.6 We note that the facts of the present case are simila considered in the judicial precedents discussed above, and the Revenue has not pointed out any distinguishing facts. In accordance with these precedents, we direct the TPO to aggregate the payments for business and management consultancy service Transactional Net Margin Method (TNMM). If the Assessee’s margin is found to be at arm’s length, no separate adjustment for payments towards business and management consultancy services will be necessary. In view of these directions, we remit this issue to the Learned TPO to redetermine the arm’s length price in line with our observations. Consequently, all grounds of appeal Nos. 2.1 to 2.6 are allowed for statistical purposes. 7. The next issue for consideration, raised i the Assessee’s appeal, pertains to the recharacterization of outstanding trade receivables as a separate international transaction. The Assessing Officer treated the outstanding receivables from the Associated Enterprise (AE) as a distinct international transaction under the Explanation to section 92B of the Act and imputed interest at LIBOR plus 450 basis points on an ad hoc basis as the arm’s length interest rate. 11 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. We note that the facts of the present case are simila considered in the judicial precedents discussed above, and the Revenue has not pointed out any distinguishing facts. In accordance with these precedents, we direct the TPO to aggregate the payments for business and management consultancy services and benchmark them under the Transactional Net Margin Method (TNMM). If the Assessee’s margin is found to be at arm’s length, no separate adjustment for payments towards business and management consultancy services will be necessary. In view ections, we remit this issue to the Learned TPO to redetermine the arm’s length price in line with our observations. Consequently, all grounds of appeal Nos. 2.1 to 2.6 are allowed for statistical purposes. The next issue for consideration, raised in grounds Nos. 3.1 to 3.2 of the Assessee’s appeal, pertains to the recharacterization of outstanding trade receivables as a separate international transaction. The Assessing Officer treated the outstanding receivables from the Associated Enterprise s a distinct international transaction under the Explanation to section 92B of the Act and imputed interest at LIBOR plus 450 basis points on an ad hoc basis as the arm’s length interest rate. IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. We note that the facts of the present case are similar to those considered in the judicial precedents discussed above, and the Revenue has not pointed out any distinguishing facts. In accordance with these precedents, we direct the TPO to aggregate the payments for business and s and benchmark them under the Transactional Net Margin Method (TNMM). If the Assessee’s margin is found to be at arm’s length, no separate adjustment for payments towards business and management consultancy services will be necessary. In view ections, we remit this issue to the Learned TPO to redetermine the arm’s length price in line with our observations. Consequently, all grounds of appeal Nos. 2.1 to 2.6 are allowed for statistical purposes. n grounds Nos. 3.1 to 3.2 of the Assessee’s appeal, pertains to the recharacterization of outstanding trade receivables as a separate international transaction. The Assessing Officer treated the outstanding receivables from the Associated Enterprise s a distinct international transaction under the Explanation to section 92B of the Act and imputed interest at LIBOR plus 450 basis points on an Printed from counselvise.com 7.1 The Ld. AR for the Assessee submitted that this issue various decisions of ITAT Chennai benches wherein it has been held that outstanding receivables is an international transaction, however when it comes to benchmarking, this Tribunal has held that Average LIBOR was to be adopted as the appropria receivables. Relying upon the same, the Ld. AR pleaded that Average LIBOR may be adopted for imputing interest. 7.2 Per contra, the Ld. DR strongly supported the orders and directions of the lower authorities. 7.3 We have heard the rival contentions, perused the material available on record, gone through the orders of lower authorities and case laws relied upon. We find that an identical issue has already been adjudicated by the co-ordinate bench in the case of vs DCIT, [IT(TP)A Nos: 34 & 115/Chny/2024] directed the AO to recompute interest by adopting Average LIBOR as the basis. The relevant findings of the Tribunal are reproduced below: “26. The first issue that came up for our consideration from ground no. 2 to 11 of this appeal is recharacterization of outstanding trade receivables as separate international transactions. Since this issue has already been adjudicated in ITA No.34/CHY/2024(supra) for AY 21, by following the same, we direct the Assessing officer to recompute interest by adopting Average LIBOR as the basis for imputing interest on outstanding Trade Receivables.” 12 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. The Ld. AR for the Assessee submitted that this issue various decisions of ITAT Chennai benches wherein it has been held that outstanding receivables is an international transaction, however when it comes to benchmarking, this Tribunal has held that Average LIBOR was to be adopted as the appropriate rate for benchmarking the delayed receivables. Relying upon the same, the Ld. AR pleaded that Average LIBOR may be adopted for imputing interest. Per contra, the Ld. DR strongly supported the orders and directions of We have heard the rival contentions, perused the material available on record, gone through the orders of lower authorities and case laws relied upon. We find that an identical issue has already been adjudicated ordinate bench in the case of M/s. Acqueon Technologies Pvt Ltd vs DCIT, [IT(TP)A Nos: 34 & 115/Chny/2024] wherein this Tribunal has directed the AO to recompute interest by adopting Average LIBOR as the basis. The relevant findings of the Tribunal are reproduced below: ssue that came up for our consideration from ground no. 2 to 11 of this appeal is recharacterization of outstanding trade receivables as separate international transactions. Since this issue has already been adjudicated in ITA No.34/CHY/2024(supra) for AY 21, by following the same, we direct the Assessing officer to recompute interest by adopting Average LIBOR as the basis for imputing interest on outstanding Trade Receivables.” IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. The Ld. AR for the Assessee submitted that this issue covered by various decisions of ITAT Chennai benches wherein it has been held that outstanding receivables is an international transaction, however when it comes to benchmarking, this Tribunal has held that Average LIBOR was to te rate for benchmarking the delayed receivables. Relying upon the same, the Ld. AR pleaded that Average Per contra, the Ld. DR strongly supported the orders and directions of We have heard the rival contentions, perused the material available on record, gone through the orders of lower authorities and case laws relied upon. We find that an identical issue has already been adjudicated /s. Acqueon Technologies Pvt Ltd wherein this Tribunal has directed the AO to recompute interest by adopting Average LIBOR as the basis. The relevant findings of the Tribunal are reproduced below: ssue that came up for our consideration from ground no. 2 to 11 of this appeal is recharacterization of outstanding trade receivables as separate international transactions. Since this issue has already been adjudicated in ITA No.34/CHY/2024(supra) for AY 2020- 21, by following the same, we direct the Assessing officer to recompute interest by adopting Average LIBOR as the basis for imputing interest Printed from counselvise.com 7.4 In view of the above and following the decisions of co benches of this Tribunal, we direct the Assessing Officer to compute interest on outstanding receivables from the Associated Enterprises (AEs) by using the average LIBOR as the basis for imputation. Consequently, the grounds of appeal Nos. 3.1 to 3.2 raise 8. In the result, the a Order pronounced on Sd/- (एस. आर. रघुनाथा (S.R.RAGHUNATHA) लेखा लेखा लेखा लेखा सद)य सद)य सद)य सद)य/ACCOUNTANT MEMBER चे\u000eनई चे\u000eनई चे\u000eनई चे\u000eनई/Chennai, *दनांक *दनांक *दनांक *दनांक/Dated: 31st December, 2025. EDN, Sr. PS आदेश आदेश आदेश आदेशक क क क ितिल+प ितिल+प ितिल+प ितिल+पअ,े+षत अ,े+षत अ,े+षत अ,े+षत 1. अपीलाथ अपीलाथ अपीलाथ अपीलाथ /Appellant 2. यथ यथ यथ यथ /Respondent 3. आयकरआयु- आयकरआयु- आयकरआयु- आयकरआयु-/CIT, Chennai / Madurai / 4. +वभागीय ितिनिध +वभागीय ितिनिध +वभागीय ितिनिध +वभागीय ितिनिध/DR 5. गाड\u0018फाईल गाड\u0018फाईल गाड\u0018फाईल गाड\u0018फाईल/GF 13 IT(TP)A No.120 M/s. Plinton Mobility Solutions Pvt. Ltd. In view of the above and following the decisions of co benches of this Tribunal, we direct the Assessing Officer to compute interest on outstanding receivables from the Associated Enterprises (AEs) by using the average LIBOR as the basis for imputation. Consequently, the grounds of appeal Nos. 3.1 to 3.2 raised by the Assessee are allowed. appeal of the assessee is partly allowed. Order pronounced on 31st day of December, 2025 at Chennai. रघुनाथा) (S.R.RAGHUNATHA) /ACCOUNTANT MEMBER Sd/ (मनु कुमार (MANU KUMAR GIRI) \u000eयाियक \u000eयाियक \u000eयाियक \u000eयाियक सद)य सद)य सद)य सद)य/JUDICIAL MEMBER December, 2025. /CIT, Chennai / Madurai / Salem / Coimbatore. IT(TP)A No.120/Chny/2024 Mobility Solutions Pvt. Ltd. In view of the above and following the decisions of co-ordinate benches of this Tribunal, we direct the Assessing Officer to compute interest on outstanding receivables from the Associated Enterprises (AEs) by using the average LIBOR as the basis for imputation. Consequently, the d by the Assessee are allowed. ssessee is partly allowed. day of December, 2025 at Chennai. Sd/- कुमार िग र) (MANU KUMAR GIRI) /JUDICIAL MEMBER Salem / Coimbatore. Printed from counselvise.com "