Sec. 92C, 92CA of Income-tax Act, 1961— Transfer pricing— ALP of international transactions has to be determined by following any of the prescribed methods.

Facts: The main ground urged by the assessee relate to the Transfer Pricing Adjustment in respect of payments made to AEs (AE) for availing various types of services.

Held, that payment made for similar types of services in asst. yrs. 2014-15 and 2015-16 have been accepted by TPO without making any adjustments, meaning thereby, TPO has accepted the fact that AEs have provided services to assessee during the years relevant to asst. yrs. 2014-15 and 2015-16. The case of the assessee is that various services were availed by it under the same agreements during asst. yrs. 2014-15 and 2015-16 were also availed during the years under consideration also. There may be difference between the quantum of services availed in asst. yrs. 2003-04 to 2010-11 and during the years under consideration, but the question is whether the services were actually provided by the AEs and the assessee did receive benefits therefrom or not. TPO has accepted payment made in the succeeding two years, meaning thereby, the TPO has accepted the fact that AEs have provided services and the assessee has got benefits from those services. Since the question of providing services and benefits received therefrom is question of fact and since the TPO has accepted that the payment in asst. yrs. 2014-15 and 2015-16 and further since the TPO, in his remand report, has accepted that the services were provided during the years under consideration also, we are of the view that the reasoning given by the TPO/DRP for determining the ALP at NIL, presumably by adopting CUP method, in our view, is liable to be rejected. There is no dispute that the ALP of international transactions has to be determined by following any of the prescribed methods. The assessee has determined the ALP by adopting TNMM method and the same has been accepted in the past and future years. It also well settled proposition that the TPO cannot estimate the ALP. However, in the instant years, the TPO/DRP has rejected the same only for the reason that the assessee has failed to prove that the services were actually provided by AEs and further the assessee has actually been benefitted there from. TP study undertaken by assessee under TNMM method has not been examined at all. Also the tax authorities have examined the question of determining most appropriate method. Accordingly the entire issue requires fresh examination at the end of the AO. Accordingly we set aside the order passed by AO on this issue and restore the same to his file for examining the same afresh. - DOW CHEMICAL INTERNATIONAL (P.) LTD. V/s DY. CIT - [2020] 206 TTJ 922 (ITAT-MUMBAI)