Denso Haryana P. Ltd [TS-661-ITAT-2023(DEL)-TP]

The TPO made adjustment for payments made towards intra-group services and payment made towards import of capital goods amounting to Rs.12,40,40,466/-, after accepting ALP of all other transactions under TNMM. The assessee had clubbed all the international transactions together and adopted TNMM for benchmarking.

The Tribunal held that the TPO was not justified in selectively picking of only a couple of transactions for different treatment. The tribunal observed that while the TPO has accepted assessee’s approach in respect of nine transactions, he has segregated two transactions including the transaction relating to intragroup services. Thus, it is not a case where the TPO has entirely disbelieved assessee’s claim that the transactions are closely linked transactions. Therefore, the tribunal held that the approach adopted by the TPO to segregate this payment made towards intra-group services is unsustainable.

The tribunal further observed that in the course of proceedings before the TPO, the assessee furnished voluminous evidences, which demonstrate that the assessee has received various services such as planning services, safety and environment services, information system, procurement services, human resource services. The tribunal held that from the aforesaid facts, it can be seen that not only the assessee has received services from AE, the services have resulted in tangible benefit to the assessee.

The tribunal further held that in any case of the matter, the TPO could not have determined the ALP at Nil under CUP method without bringing on record any comparable uncontrolled transaction.

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