NTT INDIA PRIVATE LIMITED ,MUMBAI V. ASSTT COMM. OF INCOME TAX-14(1)(1), MUMBAI

ITA 2491/MUM/2022

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The case involves NTT India Private Limited appealing against the assessment order which included a significant transfer pricing adjustment related to management services provided by its associated enterprise, NTT Asia Pacific Holdings Pte. Ltd. The Transfer Pricing Officer (TPO) had applied the Comparable Uncontrolled Price (CUP) method instead of the Transactional Net Margin Method (TNMM) used by the assessee, leading to a higher adjustment. The Tribunal examined whether the TPO's rejection of TNMM and the application of CUP were justified. It was found that the TPO did not provide sufficient justification for not accepting TNMM and for applying CUP, leading to the Tribunal's decision in favor of the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668714 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2018-2019
• Other Referred Cases: Everest Kanto Ltd. vs. ACIT, UCB India Pvt. Ltd. vs. ACIT, Toyota Kirloskar Motors vs. ACIT, Serdia Pharmaceuticals (India) (P.) Ltd vs. ACIT, LG Electronics vs. ACIT, Syngenta India Ltd. vs. ACIT, A.W. Faber Castell vs. ACIT, Merk Limited vs. ACIT, AC Nielsen (India) Pvt. Ltd. vs. ACIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PANKAJ KUMAR; LD.
• Assessee Lawyers: VIJAY MEHTA; LD
• Keywords: Revised return; Transfer pricing; International transaction; TDS
• Section: 143(3); 142(1); 37; 92C; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “J” BENCH MUMBAI BEFORE MS. PADMAVATHY S, ACCOUNTANT MEMBER & SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER ITA No. 2491/Mum/2022 (Assessment Year: 2018-19) NTT India Private Limited 1701-1704, B Wing, One BKC, Level 17, G-Block, Plot No. C-65, Bandra Kurla Complex, Bandra East, Mumbai-400 051. Vs. Assessment Unit/NFAC/DCIT Circle 15(1)(2), Mumbai Aayakar Bhavan, Mumbai. PAN/GIR No. AAACD2145G (Applicant) (Respondent) Assessee by Shri Vijay Mehta, Ld. AR Revenue by Shri Pankaj Kumar, Ld. CIT-DR Date of Hearing 01.04.2025 Date of Pronouncement 24.06.2025 आदेश / ORDER PER RAJ KUMAR CHAUHAN, JM: This appeal is directed against the assessment order dated 29.07.2022 passed by Assessing Officer u/s 143(3) r.w.s. 144C(13) of the Act wherein the Arm’s Length Price (ALP) adjustment of Rs. 99,09,31,854/- was made in respect of management service transactions on the 2 ITA No. 2491/Mum/2022 NTT India Private Limited recommendation of Ld. DRP who accepted the ALP determined by the TPO. 2. The brief facts as culled out from the proceeding before the lower authorities are that the assessee, NTT India Private Limited (NTT India), formerly known as Dimension Data India Private Limited, is a part of NTT Group ('Nippon Telegraph and Telephone Group' - formerly Dimension Data group), and a subsidiary of NTT Asia. The group is a dealer for CISCO and other networking products. The assessee is engaged in trading of networking products and in providing services such as training, maintenance, installation, consultancy, facility management, outsourcing and systems integration in the area of information communications systems and computer networking and computer hardware and software. The assessee is also engaged in IT enabled services at small scale. 3. The assessee has electronically filed its return of income for the AY 2018-19 on 29.11.2018 declaring a total income of Rs.115,84,69,830/-. The assessment was selected for complete scrutiny through CASS. Accordingly, notice u/s 143(2) was issued on 23.09.2019 and was duly served on the assessee. Subsequently, a notice u/s 142(1) was issued to the assessee on 06.03.2020. However, in the mean time, the case was selected for Faceless assessment 3 ITA No. 2491/Mum/2022 NTT India Private Limited under the FAS, 2019 and accordingly statutory notice u/s 142(1) were issued again to the assessee on 24.11.2020 and 24.12.2020. In response to the said notices and the letters, the assessee company made online submissions on 5 dates between 09.12.2020 to 22.09.2021. 4. During the assessment proceeding, it was revealed that the assessee entered into international transactions with its associated enterprises (AEs) and the value of such international transactions was above the prescribed limit, hence the case of the assessee was referred to the concerned Transfer Pricing Officer (TPO), with prior approval of the PCIT. The TPO, DC/ACIT, TP 3(1)(1), Mumbai, made an adjustment to the value of the international transaction vide his order passed u/s 92CA (3) of the Act dated 30.07.2021. 5. The Ld. TPO has proposed the ALP adjustment of Rs. 99,09,31,854/- in respect of management services transaction. Ld. TPO has also requested to initiate the penalty proceedings u/s 271AA of the Act. In view of the order of arm’s length price determined by the TPO, an addition of Rs. 99,09,31,854/- was made to the total income of the assessee, accordingly the total income was assessed at Rs. 214,94,01,690/-. 6. Accordingly, draft assessment order u/s 144C of the Act was passed on 30.03.2021. The assessee preferred the 4 ITA No. 2491/Mum/2022 NTT India Private Limited objections before the Ld. DRP. The DRP while deciding ALP determined by the TPO, held that the TP adjustment be reduced to the extent of corporate guarantee which is included in management services. The assessee is in appeal before the Tribunal against the final order of assessment passed by the AO pursuant to the DRP directions. 7. The assessee has agreement with its AE for Intra Group services. The assessee has elaborated the nature of service and also enumerated the benefit of those services. The assessee has submitted various documents before the TPO to substantiate the availing services and the TPO has analysed the evidences filed in support of allocation of management services which included:- i) The quarterly invoices raised on AE which were not considered by the TPO on the ground that the invoices filed did not contain any details of services rendered by the AE. ii) The assessee got 42% to 80% discount on the price list as against the 3rd parties which gets only 42% discount. Ld TPO rejected this contention of the assessee on the ground that discount was received because the assessee is a member of the group and the intra group payment is supposed to be made for services availed and not for the membership of the 5 ITA No. 2491/Mum/2022 NTT India Private Limited group, therefore AE cannot seek compensation of the bulk discount. The gain in the purchase price, if any, is not on account of any concerted action of the AE but is on account of the membership of the assessee in the multinational group. Therefore these are benefits arising out of group synergies and such benefit has to be passed on to the group member and the AE does not incur any cost for such indirect benefits. iii) The assessee submitted a copy of PPT presentation, but the same was rejected by the TPO on the ground that the PPT presentation is general in nature and it has not been established by the assessee what were the services received and how the assessee is benefitted from the same. iv) The assessee's claim that the AE has extended a guarantee in favour of the assessee separately and the ALP of this transaction is determined @ 0.50% which comes to be Rs. 2,11,87,738/-. The rate of 0.5% is being taken on the basis of the decision of the Bombay High Court in the case of Everest Kanto Ltd. But the same was also rejected by the TPO stating that there is no guarantee transaction has been reported in the international transaction. Even if there is a guarantee transaction, it cannot be treated as the management 6 ITA No. 2491/Mum/2022 NTT India Private Limited service because its being a separate transaction has to be benchmarked separately. v) The claim of the assessee that the AE has arranged extending credit term form GE for the assessee was rejected by the TPO stating the this cannot be considered as rendering of the management service and the AE is not required any payment for such services under the head management services. vi) The assessee's claim that AE carries out its Customers Credit Evaluation was rejected by the TPO on the ground that this activity has nothing to do with the management services. vii) The claim of the assessee that AE has implemented the HR policy, which was rejected by the TPO on the ground that the user guides and manuals furnished are general and common in nature, which are not especially for the assessee but appears for entire group. viii) The claim of the assessee that HR tools which requires compensation to AE was also not considered by the TPO because these tools are related to receipt of management services is not demonstrated by assessee that these tools were related to the management 7 ITA No. 2491/Mum/2022 NTT India Private Limited services or whether AE had incurred any expenses to sustain the tools. ix) Regarding assessee’s claim that AE has contributed to recruitment of employees in India, the TPO has rejected on the ground that assessee has not filed any details in that regard. x) The claim of assessee that NTT India centrally provides IT support and software license was also not considered by the TPO on the ground that the exact details of the services rendered, cost incurred for the same by the AE, benefits received out of such services was not clarified. Therefore, the AE is not required to be compensated under the head management services. xi) The claim of assessee that assessee's management fees agreement entails 10 kinds of services to be provided to assessee was rejected by the TPO on the ground that assessee has failed to show the cost allocated to it in each or any of service category. 8. Thus the TPO has rejected the assessee's entity level benchmarking of the international transaction of cost contribution of management fees for two reasons:- (1) Firstly, the cost contribution constitutes a small part of the total transactions of the assessee company at the entity level. Therefore, the profit margin at the entity level cannot be 8 ITA No. 2491/Mum/2022 NTT India Private Limited the basis for determining the ALP of the cost contribution. The profits at the entity level are affected by various other factors unconnected with the value of cost contribution transaction. Therefore, TNMM is not the most appropriate method to benchmark the transaction of cost paid for availing the management services. This view has been held by the ITAT in the following cases for royalty transaction and same is applicable for cost contribution also: a. LG Electronics b. Syngenta India Ltd. 148 ITD 420 (Mum) C. A.W. Faber Castell (2) Secondly, it was held that under the TP provisions, each international transaction has to be benchmarked separately. As the payments for the management services constitute a separate class of transaction, it should be benchmarked separately. For this, reliance was placed on the decision in the case of UCB India Pvt. Ltd. v/s. ACIT 121 ITD, 131 (Mum) and Toyota Kirloskar Motors v/s. ACIT, ITA No. 1595 (Bang)/2012. 9. Relying on the provision of section 92B(1) of the Act, the TPO has held that any income arising from any service, facility, or benefit has to be determined having regard to their ALP, therefore the allocation was in itself is not the ALP and the ALP has to be separately determined under one of the 5 methods prescribed in section 92C(1). For benchmarking of the international transaction of cost contribution of management fees, the TPO has applied CUP 9 ITA No. 2491/Mum/2022 NTT India Private Limited method as the most appropriate method relying on the decision in the case of Serdia Pharmaceuticals (India) (P.) Ltd of ITAT Mumbai reported in 44 SOT 391, and proposed a downward ALP adjustment of Rs. 99,09,31,854/- in respect of allocation of management fees. The ALP of this transaction was determined at Rs 7,81,85,549/- by the TPO considering that the third party invoice bills submitted by the assessee, an amount of Rs. 7,81,85,549/- was found to be allocable to the assessee for the management service and the balance amount claimed by the assessee of Rs. 99,09,31,854/- was proposed as adjustment. 10. To arrive at the above conclusion the TPO has highlighted that while the assessee has given description of various services for which the payment is stated to have been made, actual evidence for receipt of service has not been fully and appropriately furnished to justify the cost allocation or enable the ALP determination., The assessee/AE has neither maintained any log book of the time devoted by the employees of the AE to provide the service to the assessee nor did the assessee furnished for details of actual cost incurred by the AE in respect of services availed by the assessee. Submissions of assessee before Ld. DRP. 10 ITA No. 2491/Mum/2022 NTT India Private Limited 11. The assessee has submitted before the Ld. DRP that; Firstly, the assessee has entered into international transactions with its group entities, aggregated them under distribution and support service segment and benchmarked the said transactions using TNMM. Secondly, the payment of management fee is not a separate transaction but closely linked to the primary business activity of the assessee that these services are required to efficiently perform the business activity of the assessee and further these services contribute jointly to the profitability of the assessee, therefore separate transaction by transaction approach was not possible. Thirdly, the assessee submitted that there are various legal precedents in support of the assessee for benchmarking the transaction of payment of management fees by using the TNMM method as the most appropriate method. The said ruling has been referred in para 5.2.3 of the order of Ld. DRP. Fourthly, the assessee has submitted that the TPO has determined the arm's length price of the transaction by applying CUP method, however, the TPO has failed to provide comparable uncontrolled transaction data with independent parties. Fifthly, it is stated by the assessee that NTT Asia is the regional headquarters and acts as a group service center and the said AE renders management services to all the subsidiaries to enable smooth and efficient operations of 11 ITA No. 2491/Mum/2022 NTT India Private Limited the business, formulates the overall business direction, provides general management to group entities, allocates resources within the group and ensures that the overall strategies are implemented by the subsidiaries. Sixthly, the assessee has submitted that, without availing management services, it would not have been in a position to even carry on its business, hence, the assessee has incurred management fees for a legitimate business purpose and the assessee has immensely benefited from the management services rendered by AE. The evidence was submitted before the TPO with regard to the assessee has been benefitted immensely through the services of its AE and the Ld. TPO has not appreciated the documentary evidence provided by the assessee on the ground that one to one benefit linkage was not shown as NTT Asia has allegedly rendered certain centralized intra group services to all NTT group companies. Seventhly, the assessee has claimed that because of the management services provided, the assessee was benefitted for a sum of Rs. 300.71 crores and amount paid as management fees was only 106.91 crores. Eighthly, the assessee submitted that the services rendered by NTT Asia in any particular year may benefit the assessee company over a period time to come and hence exact quantification in any year may not be possible and reliance was also placed on Para 7.24 and Para 7.26 of the 2017 OECD Guidelines in this regard. 12 ITA No. 2491/Mum/2022 NTT India Private Limited 12. Thus, the assessee contended before the Ld. DRP that its actual benefit from the various services rendered by AE should be sufficient to meet the arm's length requirements. Accordingly, assessee submitted that the Ld. AO be directed to delete the adjustments proposed on account of management fees. Directions of the Ld. DRP 13. After considering the submission of the assessee and the observation of the Ld. TPO, Ld. DRP has relied on its previous directions /proceedings for AY 2013-14 and AY 2014-15 in the case of assessee and quoted the said directions in para 5.3.1 of its order (pages from 38 to 51). It has been concluded by the Ld. DRP that the adjustment as regards international transaction of 'Providing Group Corporate Guarantee' benchmarked @ 0.50% on the basis of the decision of the Bombay High Court in the case of Everest Kanto Ltd., which comes to be Rs.22,11,87,738/- needs to exclude from the adjustment of Rs. 99,09,31,854/- on account of international transactions of allocation of Management Fees and accordingly, the AO/TPO was directed to exclude this adjustment while passing the final order after verification. 14. With respect to remaining adjustment made by the TPO, the same was upheld on the ground that “Just by describing various services, it will not suffice to justify the 13 ITA No. 2491/Mum/2022 NTT India Private Limited price charged in intra group services. The taxpayer has to prove with proper documentation and evidence that the services are actually rendered and received and that payment is commensurate with the benefit derived there from. First of all, the taxpayer has to prove that the services are rendered and received. The second aspect of intra group services is the quantification of such services in terms of actual expenditure incurred and commensurate benefits derived there from. The third aspect is arm's length price for such services, if the same requires payment at arm's length.” 15. In view of the directions of the Ld. DRP, subsequently, ACIT, Transfer Pricing Officer-3(1)(1), Mumbai passed the give effect to direction u/s 144C(5) vide order dated 14.07.2022 wherein TPO has revised addition amount on account of TP adjustment to the tune of Rs. 93,23,73,143/- instead of Rs. 99,09,31,854/- as per the direction given by the DRP u/s. 144C(5) of the Act in respect of Management Services including Corporate Guarantee vide order dated 09.06.2022. Accordingly, the final assessment order was passed wherein adjustment of Rs. 93,23,73,143/- was made to the total income which was brought to Rs. 209,22,06,715/-. Penalty proceedings initiated u/s.274 r.w.s. 270A and 271AA of the Act. 14 ITA No. 2491/Mum/2022 NTT India Private Limited 16. Aggrieved by the impugned order, assessee is in appeal before us and has raised the following grounds of appeal:- 1. Ground No. 1: Transfer Pricing adjustment of INR 93,23,73,143/- on account of payment of management fees: 1.1. On the facts and in the circumstances of the case and in law, the Hon'ble Dispute Resolution Panel ('DRP')/Learned Transfer Pricing Officer ('Ld. TPO') / Learned Assessing Officer ('Ld. AO') have erred, in making transfer pricing adjustment of INR 93,23,73,143/- to the value of international transactions in respect of payment of management fees to its Associate Enterprise ('AE') i.e. NTT Asia Pacific Holdings Pte. Ltd. ('NTT Asia') 1.2. The Hon'ble DRP / Ld. TPO / Ld. AO have erred in law by considering management fees paid as a separate class of transaction and segregating it for the benchmarking purpose. 1.3. The Hon'ble DRP/Ld. TPO/Ld. AO have exceeded their powers in questioning the commercial wisdom of the Appellant's decision to take benefit of the expertise of NTT Asia and accordingly determining the arm's length price of management services as Nil. 1.4. The Hon'ble DRP/Ld. TPO/Ld. AO have erred in law by rejecting the Transactional Net Margin Method ('TNMM') analysis adopted by the Appellant to benchmark its international transactions and applying the Comparable Uncontrolled Price ('CUP') Method in contravention of the provisions of Rule 10A of the Income Tax Rules, 1962. 1.5. The Hon'ble DRP / Ld. TPO / Ld. AO has erred in facts and law in not considering or not appreciating the detailed analysis and evidence presented by the Appellant as regards the benefits received by the Appellant towards the management services availed from its AE and rejecting such detailed analysis of the Appellant without providing proper justification. 1.6. The Hon'ble DRP / Ld. TPO/Ld. AO have erred in stating that NTT India receives a fixed quarterly charge for management services availed and have also erred in stating that such quarterly invoices raised by AE on the Appellant are without any cost base and allocation keys. 15 ITA No. 2491/Mum/2022 NTT India Private Limited 1.7. The Hon'ble DRP/Ld. TPO/Ld. AO have erred in rejecting the detailed documentary evidences with respect to 10 categories of services (Inputs on company policy related matters, Services related to human resource function, Assistance with corporate communications and brand management, Services related to business development and business operations, Legal support for corporate and compliance matters, Services related to finance and accounting, Services related to development of solutions, Services related to project management and consulting services, Information technology related assistance, Support with sales activities) produced by the Appellant, by stating generically that the activities were routine in nature, part of shareholder activities or evidences do not lead to availment of services. The Hon'ble DRP/Ld. TPO/Ld. AO have further erred in concluding that no costs were incurred by AE for rendering the services and that no services were rendered by the AE. 1.8. The Hon'ble DRP/Ld. TPO/Ld. AO have erred in stating the fact that the Appellant has not been able to demonstrate any benefit received by it from services for which payment is made, when in fact the benefit demonstrated by the Appellant was multiple times more than the payment made to NTT Asia. 1.9. On the facts and in the circumstances of the case and in law, the Hon'ble DRP has erred in confirming the conclusion of the TPO that the gain in the form of discounts on the purchase price is not because of the efforts of NTT Asia but is on account of membership of the Appellant in the multinational group. Further, the Hon'ble DRP/Ld. TPO erred in concluding that the benefit of Rs 278.47 crores computed by the Appellant has no basis. 1.10. The Hon'ble DRP/Ld. TPO/Ld. AO have erred in ignoring the benefits received and quantified by the Appellant and in ignoring the fact that the overall benefit derived by the Appellant is much higher than the cost charged by the AE for the management services and hence, it would be just and equitable to conclude that the Appellant has been able to justify the benefit test. The Appellant contends that as the payment of management fees is for the bundle of services, the benefit also has to be looked at in totality rather than for specific services. The Hon'ble DRP /Ld. TPO/Ld. AO have erred in ignoring the fact that the Appellant has the right to avail any of the services mentioned in the umbrella agreement for various services entered with its AE. 16 ITA No. 2491/Mum/2022 NTT India Private Limited 1.11. The Hon'ble DRP/Ld. TPO/Ld. AO have erred in granting a partial relief of only 0.50% as a saving in the guarantee fee to the Appellant as against 3% to 4% claimed by the Appellant in respect of the guarantee provided by the AE which is bundled in the management services rendered by the AE. 1.12. The Hon'ble DRP/Ld. TPO/Ld. AO have erred in stating that the Appellant has not submitted the evidence of expenses incurred by the AE and the basis on which the charges were allocated. The Hon'ble DRP/Ld. TPO/Ld. AO have also erred in interlinking the management services with the technical support and maintenance services availed from the AE without appreciating the fact that the same is a separate class of transaction. 1.13. The Hon'ble DRP/Ld. TPO/Ld. AO have erred in law by not considering the Mumbai Income-tax Appellate Tribunal's decision in the Appellant's own case for AY 2011-12 which specifically held that while deciding the Arm's Length Price ('ALP') of the umbrella of services what has to be considered is the right of Appellant that it is entitled to avail the services and non-availing of services cannot be the basis for rejecting the claim and it had accordingly decided the matter in favour of the Appellant. 2. Ground No.2: Erroneous computation of Total Income by the Ld. AO: The AO has erred in denying the deduction u/s 80G of the Act allowable under Chapter VIA amounting to Rs. 13,63,740/-. The Appellant, therefore, prays the Hon'ble Members to direct the Ld. AO to consider the correct total income by allowing deduction u/s 80G of the Act and consequently recompute the tax and interest payable thereon. 3. Ground 3: Short grant of Tax Deducted at Source ('TDS') credit amounting to INR 22,86,779/- On the facts and circumstances of the case and in law, the Ld. AO has erred in granting TDS credit of Rs 49,42,94,260/- against Rs 49,65,81,039/- as claimed in the revised return of income filed by the Appellant. The Appellant, therefore, prays the Hon'ble Members to direct the learned AO to grant balance credit for TDS of Rs. 22,86,779/-. 4. Ground 4: Penalty Proceedings: 17 ITA No. 2491/Mum/2022 NTT India Private Limited The Ld. AO has erred in law in initiating penalty proceedings under section 274 r.w.s. 270A and 271AA of the Act. The Appellant being aggrieved is filing the present appeal. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at the time of hearing of the appeal, so as to enable the Honourable Members to decide this appeal according to law. Ground No. 1 17. In this ground, the assessee challenged the Transfer Pricing adjustment of Rs. 93,23,73,143/- towards payment of management fees. The assessee has benchmarked the said transaction in entity level TNMM on the ground that the margin earned by the assessee at entity level was in accordance with the provision of section 92C(2) of the Act and further claimed that the same was determined at ALP. However the Ld. TPO was not in agreement with the assessee for the reason discussed earlier by us in this order and Ld. TPO has applied the CUP method for benchmarking the said transaction and rejected the contentions of the assessee on the ground that assessee had failed to furnish the evidence for receipt of services for justifying the cost of allocations and also that the assessee has not maintained log book of the time devoted by the employees of the AE to provide the intra group services to the assessee and also the details of actual cost incurred by the AE for rendering the said services. 18 ITA No. 2491/Mum/2022 NTT India Private Limited 18. The Ld. DRP while disposing the objections filed by the assessee has confirmed the order of TPO stating that this issue on management fees was already considered in assessee’s case for AY 2013-14 and 2014-15 where the DRP’s finding were on the issue of determination of ALP and not the purpose of rendering the said services. The Ld. DRP further held that the TNMM method is not applicable to bench mark the entire group services where identifying the cost of services for each service would be difficult. The Ld. DRP proposed to give partial relief by directing the TPO to exclude the amounts towards the international transaction of providing group corporate guarantee @ 0.50% based on the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Everest Kento Cylinders Ltd. in ITA No. 1165 of 2013 vide order dated 08.05.2015. 19. We have heard Ld. AR and Ld. DR and examined the record. At the very outset, Ld. AR submitted that the issue involved in the present case is fully covered in favour of the assessee in the following cases /reasons :- i) ITA no. 2280/Mum/2016 for AY 2011-12 in the case of Dimension Date India Pvt. Ltd. vs. DCIT dated 16.08.2017 placed at page no. 91 of the Paper Book 1. ii) Rejection of departmental appeal by the Hon’ble Bombay High Court against the above referred Tribunal order and 19 ITA No. 2491/Mum/2022 NTT India Private Limited proof in that regard filed at page no. 555 to 556 of the Paper book 4. iii) Order of the Tribunal in ITA No. 722/Mum/2022 for AY 2017-18 in assessee’s own case placed at page no. 557 to 571 of Paper Book 4. iv) Certificates issued under Vivad se Vishwas in the case of assessee for AY 2010-11, 2012-13 to 2016-17 wherein the identical dispute has been settled by considering it covered case decided by the Hon’ble Bombay High Court thereby enabling the assessee to pay only 50% of the disputed tax, which is placed at page no. 572 to 655 of the Papber Book-4. 20. It is therefore argued that the case of the assessee is covered by the above referred case including the Hon’ble Jurisdictional High Court and Jurisdictional Tribunal in assessee’s own case wherein the issue was decided in favour of the assessee. 21. On the other hand, Ld. DR relied on the directions of Ld. DRP and the order of TPO and AO and also brought to our notice the written submission dated 07.04.2025 stating therein that the case is not covered as being claimed and has given the following reasons:- i) The case of Hon’ble ITAT in AY 2017-18 relied by the assessee is distinguishable from the present year case because the ITAT has held that Ld. TPO/AO has not given any justification for rejecting the TNMM method adopted by 20 ITA No. 2491/Mum/2022 NTT India Private Limited the assessee and for considering CUP method as the ‘MAM’. It is argued that in the impugned order, Ld. TPO has given sufficient reasons for rejecting the TNMM method, therefore the present year case need to be decided separately without considering the same as a covered in assessee own case for AY 2017-18. ii) With regard to ITA No. 2280/Mum/2016 for AY 2011-12 (supra), this case is distinguishable because the said order does not discuss if TNMM is the most appropriate method (MAM) for 10 different services grouped under the ‘Umbrella of Services’. It is therefore stated that ITAT order for AY 2011- 12 should not be considered as it had not discussed the CUP over TNMM and the order of ITAT in the AY 2017-18 should not be considered as it has not gone into the issue by stating that AO /TPO has not given reasons for rejecting TNMM. 22. In the rejoinder, Ld. AR submitted written arguments and controverted the submissions of the revenue with respect to non applicability of previous judgments in assessee’s own case relied and referred above, and submitted that the Hon’ble Tribunal in earlier years has relied on the judgment of Hon’ble Bombay High Court in the case of Merk Limited (389 ITR 70). It is submitted that in those judgments of Hon’ble Tribunal, based on the judgment of Hon’ble Bombay High Court in Merk Limited (supra), the stand of the assessee was confirmed wherein it 21 ITA No. 2491/Mum/2022 NTT India Private Limited was held that the payment of management fees does not require separate benchmarking and therefore if the overall profit margin of the assessee, at the entity level, is comparable under TNMM method with comparables, no adjustment is required to be made. Further, even if the management service fee requires separate benchmarking, no adjustment is required for the reason that assessee received services under umbrella agreement of intra group services and the said argument has been upheld by the Hon’ble Tribunal in earlier years while following the judgment of Hon’ble Bombay High Court in the case of Merk Limited (supra). It is therefore argued that in view of the decision in favour of the assessee with regard to payment of management fee, the issue of transfer pricing looses importance and has no relevance. It is further argued that in the present case though the specific ground being Ground no. 1.4 regarding transfer pricing method, however in the light of the order of the earlier years, only ground no. 1.1 was discussed and pressed into service. It is therefore submitted that the issue of transfer pricing method is merely academic and the adjustment of the management service fee is squarely covered by the binding precedents relied by the assessee. 23. In order to appreciate the arguments advanced on behalf of the parties, we find it expedient to quote the relevant findings of the Jurisdictional Tribunal in ITA No. 22 ITA No. 2491/Mum/2022 NTT India Private Limited 722/Mum/2022 for AY 2017-18 (supra) with respect to ground no. 1 in the present appeal is extracted below:- 6. Ground No.1 : This ground of appeal challenges the transfer pricing adjustment of Rs.119,52,99,430/- towards payment of management fees. It is observed that the assessee has paid a sum of Rs.121,94,85,623/- on account of management fees to its AE for providing various operational support services to all its group companies which includes strategic execution and business management services, vendor management services, sales and marketing, corporate communications and brand management, finance, human resource services, IT services. The assessee had bench marked the said transaction in entity level TNMM for the reason that the margins earned by the assessee at an entity level was in accordance with the provision of section 92C(2) of the Act and stated that the same was determined at ALP. The TPO was not in agreement with the ALP determined by the assessee for the reason that the assessee’s management fees agreement consist of 10 services which were not provided with itemwise break up and no justification was given for the requirement of the said services. The ld. TPO further stated that the assessee has failed to show the cost allocated to each of the said services along with the third party costs incurred by the AE for similar services. The ld. TPO necessitated FAR analysis and the benefit tests to determine the ALP for the said transaction. The assessee had submitted various details before the ld. TPO categorizing the various services included in the management services and also the benefits the assessee gets by availing these services. The ld. TPO rejected the contention of the assessee for the reason that it had failed to furnish the evidence for receipt of services for justifying the cost allocation and also that the assessee has also not maintained the books as to the time taken by the employees of the AE to provide the intra group services to the assessee and also the details of actual cost incurred by the AE for rendering the said services. The TPO bench marked the said transaction using CUP method as the most appropriate method thereby rejecting TNMM as the most appropriate method for determining the ALP. The ld. TPO further held that the assessee has relied upon the allocation keys which is not the prescribed method as per the provision of section 92C(1) of the Act and thereby applied CUP method for determining the ALP. The ld. TPO held that the ALP of the services rendered by the AE to the assessee is determined at nil by applying CUP method and thereby proposed the impugned adjustment of Rs.121,94,85,623/-. The ld. DRP while disposing the objection filed by the assessee stated that this issue on management fees was there in assessee’s case for A.Ys. 2013-14 and 2014-15 where the DRP’s finding was on the issue of determination of ALP and not the purpose of rendering the said services. The ld. DRP further held that the 23 ITA No. 2491/Mum/2022 NTT India Private Limited TNMM method will not be applicable to bench mark the entire group services where identifying the cost of services for each service would be difficult. The DRP further held that the assessee has to prove that the said services were actually rendered and received and the actual expenditure incurred for each services should have been quantified and whether the same is at ALP has to be determined by the assessee. The ld. DRP further proposed the TPO to exclude to Rs.2,42,00,000/- towards the international transaction of providing group corporate guarantee @ 0.50% based on the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Everest Kento Cylinders Ltd. (in ITA No. 1165 of 2013 vide order dated 08.05.2015) and the same to be excluded from the adjustment of Rs.121,94,85,623/- on account of international transaction allocation of management fees. 7. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee has bench marked the international transaction related to management fees availed by the assessee from its AE by taking TNMM method as a most appropriate method. The ld. AR further stated that the contention of the TPO that payment of management fees cannot be combined with other trade transaction in distribution and service segment is unacceptable for the reason that it is not a separate transaction but is closely associated with primary business activity of the assessee. The ld. AR further stated that these services are necessary for the benefit of the assessee’s business which impact the profit earned by the assessee. The ld. AR further stated that it is highly improbable to bifurcate the said transaction owing to the nature of the services availed by the assessee. The ld. AR further contended that the TPO has applied CUP method without any justification or finding and has also failed to considered the quarterly invoice raised by the AE for the services rendered to the assessee. The ld. AR further contended that the payment of management fees has to be considered in total and the same cannot be segregated for determining the ALP. The ld. AR also contended that the ld. TPO/A.O. has failed to considered the umbrella agreement entered into by the assessee with its AE for the purpose of availing various services. The ld. AR relied on the decision of the Hon'ble Jurisdictional High Court in the case of Merck Limited TS- 608- HC-2016(BOM)-TP and also the assessee’s case in A.Y. 2011-12 on identical issue. 8. The learned Departmental Representative ('ld.DR' for short), on the other hand, controverted the said facts and stated that these were bouque of transactions which has to be bench marked considering each of the said services availed by the assessee. The ld. DR further stated that these are intra group services and the assessee has failed to prove that the said services were rendered by its AE and has also failed to quantify the same for determination of the ALP. The ld. DR further stated 24 ITA No. 2491/Mum/2022 NTT India Private Limited that the assessee has failed to furnish all the details and further brought our attention to the fact that the assessee has not reported the said transaction in Form 3CEB and that it is merely said to be a deemed international transaction. The ld. DR relied on the decision of the Tribunal in the case of Akzonobel India Ltd. [2022] 137 taxmann.com 369 (Del- Trib), MWH India Pvt. Ltd. vs. Dy. CIT (in ITA No. 1009/Mum/2015 vide order dated 27.02.2023). The ld. DR also stated that the ld. AR relying on the decision of the earlier orders is not applicable as the principle of resjudicata does not apply to the TP proceedings. 9. We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has entered into the international transactions with regard to the payment of management fees to its associated enterprises namely NTT Asia Pacific Holding Pvt. Ltd. and had bench marked the said transaction using TNMM method. The assessee contends that it had filed documentary evidence with respect to various categories of services which are regularly availed by the assessee and out of which the assessee had received overall benefit which are much higher than the cost charged by the AE for the management services, thereby justifying the benefit test. The assessee has further contended that the payment of management fees was for the bundle of services for which the benefit should also be considered in totality and the same cannot be categorized as specified services. The assessee further stated that the said services were availed by an umbrella agreement entered into by the assessee with its AE, which also included the corporate guarantee extended by the AE. It is also observed that the assessee has furnished details of third party costs incurred by the AE with regard to the management services and had allocated Rs.8,58,91,740/- to the assessee for similar services. The assessee further contended that the ld.TPO/A.O. has also interlinked IT support service rendered with technical support along with the maintenance services which according to the assessee was separate category of transactions. The assessee has relied on the decision of the Tribunal in assessee’s case for A.Y. 2011-12 where on similar grounds the Tribunal has held that for determining ALP on umbrella of services, even a few services out of all the services, if availed by the assessee during the year consideration then the TPO ought not to have rejected the TP study of the assessee on the ground that it had not availed all the services or rather majority of services entered into by the assessee with its AE as per the umbrella agreement. The Tribunal further held that it is not prerogative of the TPO to decide if the assessee has availed the entire services of a consolidated agreement but has to merely consider whether the payment made to the AE for availing the said services is at ALP or not. The relevant extract of the said decisions is cited hereunder for ease of reference: 25 ITA No. 2491/Mum/2022 NTT India Private Limited 5. We have heard the rival submissions and perused the material before us. We find that the assessee is part of the dimension Data Group and is a subsidiary of Dimension Data Asia Pacific Pte. Ltd., that the Group is a dealer for CISCO Networking Products, that as per the agreement entered into between the assessee and its AE the assessee was to be rendered services by its AE under ten different heads, that the assessee had availed certain services from its AE under then different heads, that the assessee had availed certain services from its AE as per the agreement and had made payment accordingly, that the AE had similar type of agreements with other entitites of the group, that the allocation key used for charging management fee to various entities of the group by the AE was turnover of an entity vis-à-vis turnover of the entire Asia Pacific group for the year under consideration. We are of the opinion that the basic issue to be decided in the matter before us is as to whether the payment made by the assessee under the head management service should be allowed or not. It is a fact, assessee had, during the year under consideration, not availed services under the heads (i) Corporate communication & brand management services (ii) Human resources services and (iii) Sales and marketing services. It is also a fact that as per the agreement the assessee was entitled to avail all the services. We find that similar issue has been deliberated upon and decided by the Hon'ble Bombay High Court in the case of Merck Ltd. (supra). In that matter the assessee had entered into an agreement with its AEs to provide technical know-how or consultancy in 12 fields, as indicated therein, for a consideration of Rs.1.57 crores. During the previous year relevant to the A.Y. 2003-04, the assessee availed of services of its AEs only in three out of twelve fields listed in the agreement. The TPO proceeded to hold that the entire consideration of Rs.1.57 crores was attributable to the three technical services which the assessee availed of and held that no consideration was payable in respect of nine services provided for in the agreement. Thus the entire payment of Rs.157 crores was attributable only to the three services availed out of the twelve listed in the agreement. He further held that only Rs.40 laksh could be considered as arm’s length price attributable to three services and made adjustment of Rs.1.17 crores resulting in its addition to the taxable income. The FAA confirmed the order of the A.O. The Tribunal held that the AE was obliged to provide technical assistance in the 12 areas listed in the agreement and it was for the availability of the assistance in all twelve areas that the consideration was paid and thus, no adjustment was required. Dismissing the appeal filed by the department the Hon’ble High Court held as under: “.... (c) The grievance of the Revenue before us is that services only in three areas had been availed of by the respondent-assessee from its associated enterprises out of the twelve areas listed in the agreement. Therefore, the consideration paid to the associated enterprises is only attributable to the services received/avail (d) The finding of the Tribunal that the Transfer Pricing Officer has not applied any of the method prescribed under section 92C of the Act to determine the arm's length price in respect of fees for technical know how /consultancy fee paid by the respondent assessee to its associated enter prices is not disputed before us. Further, the finding of the Tribunal that even in respect of three fields where the respondent-assessee had availed the services, no exercise to bench mark the same with similar transactions entered into between independent parties was carried out before holding that the arm’s length price in the three areas availed of is Rs.40 lakhs, is not disputed. The finding of the Tribunal that the agreement for technical know-how/consultancy was in respect of all the twelve services and the respondent- assessee could avail of all or any one of these twelve areas listed out in the agreement as and when the need arose. We find the agreement is similar to a retainer agreement. Consequently, the finding of the Assessing Officer 26 ITA No. 2491/Mum/2022 NTT India Private Limited attributing nil value to nine of the services listed in the agreement which were not availed of by the respondent-assessee in the present facts was not justified. Moreover, not adopting one of the mandatorily prescribed methods to determine the arm’s length price in respect of fees for technical services payable by the respondent-assessee to its associated enterprise, makes the entire transfer pricing agreement unsustainable in law. (e) In view of the above, the finding of fact arrived at by the Tribunal that Rs.157 crores paid by it to its associated enterprises is in respect of its right to avail and the obligation of the associated enterprises to provide technical assistance in any of the twelve services listed out in the technical know-how agreement entered into between the respondent-assessee with its associated enterprises is not shown to be perverse. The view taken by the Tribunal in the present facts is a possible view.” Here, we would also like to refer to the matter of AC Nielsen (India) Private Ltd. (supra). Relevant portion of the order reads as under: “2.2 The TPO found that during the year the assessee had paid Rs.11.14 crores to its AE, that the said payment was made in view of business support services received from the AE. It was claimed that above-mentioned payment was in the nature of intra-group services payment. He found that the first was signed on 02/06/2003 and its specified a Mark up of 5% in accordance with Article 4 whereas the second agreement was signed on 28.11.2007 and was stated to be effective from 01.01.2007. He found that the assessee had paid Euro 113315 + 339945 + USD103385 under the head Regional GSA (Business Support Services) for Client Services. He further found that under the heads Finance (Euro 19,000+ 5700+ US dollar 45. 713) and IT (Euro 48,851+ Euro 146552 plus US dollar 18, 759) thè assessee had made payments to its AE. The TPO directed the assessee to justify the ALP in respect of the GSA charges paid to its AE and to submit the gross allocation base, computation of allocation base, key of allocation and the basis of the key of allocation. The TPO examined the regional expenses allocation of Rs. 9.01 crores. After considering the submissions of the assessee dated 25/09/2010, 11/10/2010, 12/10/2010 and 19/10/2010, the TPO held that the IT was based upon components of costs that the assessee had not disclosed the basis for the allocation, that no details of special marketing Support was brought on record to show that specialist marketing and complication suppori service have been provided by the AE to the taxpayer, that the cost allocation included expenses on regional information technology team consisting of hundreds of employees located in New Zealand Australia and India and 140 people in other countries, that the assessee had not brought any evidence on record regarding employees located in India, that no customized research was conducted for the year for the assessee by the regional centre, that it had paid certain amounts towards business support services to its AE 's, that the total allocation could not be accepted to be India specific, that the submission of intra-group invoices could not be construed as sufficient compliance to show that payments made for GSA services were at arm 's length, that actual working for general costs incurred and its components were not produced for verification, that it was not proved that the assessee had really benefited out f the services of the regional team. That no one would pay any amount without knowing the actual basis and also the actual allocation figures in a third-party situation, that the assessee had its own client/server system, that total allocation could not be accepted to be India specific. He held that adjustment had to be 27 ITA No. 2491/Mum/2022 NTT India Private Limited made in the TP order. Accordingly, he made an adjustment of Rs. 4.50 crores (50% of Rs. 9.01 crores). 2.8. It is not denied by the TPO/DRP that expenses incurred by ACNielsen Corporation were not allocated to all the group entities on the basis of revenue. The assessee had made a claim that ACNielsen Asia Pacific has prepared a master file to determine an arm's length mark-up to be charged for the intra-group services. Both the authorities has not commented upon the said evidence and alleged errors,jf any, of the method approved by the Group. In short,the assessee had proved with documentary evidences that charges paid by the assessee were at arm 's length and that other arm 's length entity was prepared to pay for such services in comparable circumstances. 2.9 We are not agreeable to the proposition, advanced by the TPO/DRP, that when expenditure is incurred for the benefit of the group as a whole no charge of such expenditure is required Services rendered by AE help not only the group as a whole, but also helps others. Therefore, there is nothing wrong in charging cost for such services. As the cost incurred by the AE had been allocated to all the group companies on the basis of the revenue and detailed workings was shared with the TPO and DRP, so, it cannot be held that requisite information was not made available. It is other thing that both of them did not take notice of the details field, as discussed earlier. We are unable to understand the logic behind the argument of both the authorities that if the assessee had its own client service team then why costs of client service teams was included. According to us, it is gross violation of the ‘Laman-Rekha- drawn by the basic and fundamental taxation jurisprudence. No authority is required to hold that the jurisdiction of the A.O. u/s. 37 of the Act and that of the TPO u/s. 92CA are distinct. The authority of the TPO is to conduct a TP analysis to determine the ALP and not to determine whether or not there is a service from which the assessee benefits. So, when the TPO holds that the assessee did not benefit from these services it amounts to disallowing expenditure. Such a decision is outside the authority of the TPO. The decision as to whether the expenditure was \"laid out or expended wholly and exclusively for the purposes of the business\" is a fact determination or verification and that exercise is to be undertaken by the A0. That determination is not and cannot be made by the TPO. The Hon 'ble Delhi High Court in the case of Ekl Appliances Ltd. (345 ITR 241) has held as under: \"It is not open to the Transfer Pricing Officer to question the judgment of the assessee as to how it should conduct its business and regarding the necessity or otherwise of incurring the expenditure in the interest of its business. t is entirely the choice of the assessee as to from whom it contemplates to source its technology or technical know-how and as to what steps should be taken to meet the competition prevalent in the market and to stave off the competitors. This is the domain of the businessman and the Transfer Pricing Officer has no say in the matter. As held by the Supreme Court in S. A. Builders Ltd. v. CIT (Appeals) (2007] 289 ITR 26 (SC) the Revenue cannot justifiably claim to place itself in the arm chair of businessman or in the position of the board of directors and assume the role to decide how much is the reasonable expenditure having regard to the circumstances of the case. 22. Even rule TOB(T)a) does not authorize disallowance of any expenditure on the ground that it was not necessary or prudent for the assessee to have incurred the same or that in the view of the Revenue the expenditure was unremunerative or that in view of the Continued losses suffered by the assessee in his business, he could have fared better had he not incurred such expenditure. These are irrelevant 28 ITA No. 2491/Mum/2022 NTT India Private Limited considerations for the purpose of rule 10B. Whether or not to enter into the transaction is for the assessee to decide.......So long as the expenditure or payment has been demonstrated to have been incurred or laid out for the purposes of business, it is no concern of the Transfer Pricing Officer to disallow the same on any extraneous reasoning. As provided in the OECD guidelines, he is expected to examine the international transaction as he actually finds the same and then make suitable adjustment but a wholesale disallowance of the expenditure, particularly on been given by the Transfer Pricing Officer is not contemplated or authorized.” In the case under consideration actually the TPO had DRP have completely taken over the role of GHP AO. Instead of deciding the ALP of the IT.s reported by the assessee, they have decided the issue of allowability of expenditure incurred by it. Therefore, in of opinion, their order are not in accordance with the provisions of the Act....\" From the above, it is clear that while deciding the ALP of umbrella of services what has to considered is the right of assessee that it is entitled to avail.If it avails only a few services out of the boquet of services the TPO should not reject the TP study of the assessee on the ground that it did not avail all the services or the majority of services as mentioned in the agreement. Availing selected services from a composite agreement is sufficient for claiming the deduction. For rejecting the TP study of the assessee the TPO should prove that price shown by the assessee from the services availed was not at arm's length. Non-availing of services cannot be the basis for rejecting the claim. These are two different things and are fundamentally separate. In the case under consideration the TPO or the DRP has not stated that payment made by the assessee to its AE were not at Arm's length. Therefore, respectfully following the above mentioned cases, we decide the first ground of appeal in favour of the assessee. As far as cases relied upon by the DR are concerned, we would like to state that both of then do not deal with the issue. Dispute before us, as stated earlier, is as to whether any TP adjustment can be made if an assessee avails only certain services out of the bunch of services mentioned in an agreement specially when the TPO does not doubt the arm's length price of availed services. Both the cases are not helpful to decide the issue before us. 10. From the above observation, it is evident that the Tribunal in assessee’s case for AY 2011-12 has considered the decision of the Hon'ble Jurisdictional High Court in the case of Merck Ltd. 389 ITR 70 and the Tribunal’s decision in the case of Nielsen (India) Pvt. Ltd. (in ITA No. 8799/Mum/2012) and where on identical facts, it has been held that if the assessee availed even some of the services listed out in the composite agreement is suffice to prove the consideration paid to the AE’s and in case of intra group service payment, the TPO does not have an authority to decide whether the assessee has derived any benefit from these services or not and whether the said expenditure was incurred for the purpose of business of the assessee was to be determined by the A.O. and not by the TPO. Further it was held that the TPO is restricted only to determine whether the international transaction was at ALP. The issue in the present case is whether TP adjustment can be made in case where the assessee has availed only limited services out of bundle of services specified in the umbrella agreement, is answered in favour of the assessee. It is also pertinent to point out that the ld.TPO /A.O. has not 29 ITA No. 2491/Mum/2022 NTT India Private Limited given any justification for rejecting the TNMM method adopted by the assessee and in considering CUP as a most appropriate method. We, therefore, allow ground no. 1 raised by the assessee and hold that the same is at ALP. As this ground has been decided in favour of the assessee, ground no. 2 raised by the assessee becomes academic in nature. 24. It is not in dispute that both the judgments relied by the assessee, has attained finality because it has been claimed by the assessee that the appeal of the department against the order of Jurisdictional Tribunal for AY 2011-12 has already been dismissed. Nothing is submitted on behalf of the revenue if any appeal is filed against the order of ITA No. 722/Mum/2022 for AY 2017-18. Therefore the finding rendered by the Jurisdictional Tribunal on the issue before it can always be followed for the same issue between assessee and revenue for subsequent years. In the present case, what has to be looked into by this Tribunal is the order of the jurisdictional Tribunal in assessee’s own case on the issue involved and the said exercise has to be done in an objective manner and not based on the subjective satisfaction of either of the parties. The argument advanced by the revenue with respect to non- applicability of the earlier judgment of the Jurisdictional Tribunal on the basis of difference in consideration of points, will amount to considering the said decision of the Tribunal will a subjective approach for examining the binding precedents, which accordingly to us is not allowable in the present case. 30 ITA No. 2491/Mum/2022 NTT India Private Limited 25. The core issue before the Jurisdictional Tribunal in the previous year cases was also the same i.e. whether the transfer pricing adjustment can be done on the payment of management fee by the assessee. The Jurisdictional Tribunal in ITA No. 722/Mum/2022 (supra), it was observed while following the judgment of Hon’ble Jurisdictional High Court in the case of Merk Limited (supra) and the Tribunal decision in the case of Nielsen (India) Pvt. Ltd. (ITA No. 8799/Mum/2012) that the TPO is not correct in rejecting the TP study of the assessee on the ground that the assessee has not availed all the services agreed with the AE. It is further held that the TPO can only examine the ALP of the services availed by the assessee and non-availing of services can not be the reason for rejecting the claim. It is also held that reducing the ALP on the ground that the assessee has availed only few services out of bundle of services in the umbrella agreement is not sustainable. 26. For the above reasons, we find force in the argument of Ld. AR that the issue of payment of management fee does not require separate benchmarking and the comparable under TNMM method based on the overall profit margin of the entity level has been accepted and no adjustment was required on that count, therefore, the question of CUP method over TNMM by TPO pales into insignificance. 31 ITA No. 2491/Mum/2022 NTT India Private Limited 27. As per section 92C(i) of the Act, the arm’s length price in relation to international transaction shall be determined by any of the following methods, being the most appropriate method, having regard to the nature of transaction or class of transaction. The Six methods included CUP method as well as TNMM method. In the present case, the assessee in order to arrive at arm’s length price in relation to international transaction relating to the payment of management fee to the AE for the services rendered has considered the TNMM as most appropriate method. In the similar situation, the Jurisdictional Tribunal in ITA No. 722/Mum/2022 for AY 2017-18 (supra) has approved the TNMM to arrive at ALP and the CUP method adopted by the TPO was not considered to be the most appropriate method. 28. Since the facts and issue are same, we respectfully following the judgment of Jurisdictional Tribunal in ITA No. 722/Mum/2022 (supra) are of considered opinion that Ld. AO /Ld. TPO / Ld. DRP has committed illegality in making TP adjustment of Rs. 93,23,73,143/- paid by the assessee to its AE on account of management fee. Since the Coordinate Bench in ITA No. 722/Mum/2022 has decided the issue involved in favour of the assessee as discussed above, there is no gainsaid to reiterating that the assessee has rightly arrived at arm’s length price in respect of transaction in question while following the TNMM method considering the same as most appropriate method. In the given facts and circumstances of the case and 32 ITA No. 2491/Mum/2022 NTT India Private Limited respectful following the Jurisdictional Bench decision as discussed, the ground no. 1 raised by the assessee is allowed. Ground NO. 2 29. This ground pertains to denying the deduction u/s 80G of the Act allowable under Chapter VIA amounting to Rs. 13,63,740/- and it was prayed that the AO be directed to consider the correct total income by allowing the deduction u/s 80G of the Act. 30. There is no objection of the revenue if this ground is restored to the file of AO for considering the request of the assessee. Accordingly, we restore this ground to the file of AO for fresh adjudication and to consider the benefit of deduction of 80G of the Act after giving effective opportunity of hearing to the assessee. Hence, the ground no. 2 is allowed for statistical purposes. Ground No. 3. 31. This ground pertains to the short grant of Tax Deducted at Source ('TDS') credit amounting to Rs. 22,86,779/- stating that the Ld. AO has erred in granting TDS credit of Rs 49,42,94,260/- against Rs 49,65,81,039/- as claimed in the revised return of income filed by the assessee. 32. In the given facts and circumstances, we restore this ground to the file of AO for fresh adjudication with respect 33 ITA No. 2491/Mum/2022 NTT India Private Limited to grant of TDS credit amounting to Rs. 22,86,779/- as claimed in the revised return of income filed by the assessee, after giving effective opportunity of hearing to the assessee. Hence, the ground no. 3 is allowed for statistical purposes. Ground NO. 4. 33. This ground pertains to penalty proceedings. This ground seems to be premature and needs no specific adjudication, accordingly disposed of. 34. In the result, the appeal is accordingly partly allowed for statistical purposes. Order pronounced in the open court on 24.06.2025. Sd/- Sd/- (PADMAVATHY S) (RAJ KUMAR CHAUHAN) ACCOUNTATN MEMBER JUDICIAL MEMBER Mumbai, Dated 24/06/2025 Dhananjay, SPS आदेश की \bितिलिप अ\u000eेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. \u000eथ / The Respondent. 3. संबंिधत आयकर आयु\u0019 / The CIT(A) 4. आयकर आयु\u0019(अपील) / Concerned CIT 5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, मु\u0003बई / DR, ITAT, Mumbai 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, स\u000eािपत ित //True Copy// 1. उप/सहायक पंजीकार ( Asst. Registrar) 34 ITA No. 2491/Mum/2022 NTT India Private Limited आयकर अपीलीय अिधकरण, मु\u0003बई मु\u0003बई मु\u0003बई मु\u0003बई / ITAT, Mumbai "