IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH : BANGALORE

BEFORE SHRI SUNIL KUMAR Y ADA V, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER

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The Deputy Commissioner of Vs. M/s. Volvo India Private Limited, Income Tax, L TU, 65/2, Bagmane Tech Park, Bangalore. Block A, 5th Floor, Parin Building,

C. V. Raman Nagar, Bangalore - 560 093. PAN: AAACV 6747N

APPELLANT RESPONDENT

Mis. Volvo India Private Limited, Vs. The Deputy Commissioner' of 65/2, Bagmane Tech Park, Income Tax, LTU, Block A, 5th Floor, Parin Building, Bangalore. C.V. Raman Nagar, :

Bangalore - 560 093. PAN: AAACV 6747N .. .

I APPELLANT RESPONDENT

Revenue b Shri Saniav Kumar, CIT(DR)(ITAT), Benzaluru. Revenue b Shri Neerai Jain, CA

Date of hearing 09.01.2018 Date of Pronouncement 19.01.2018

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IT(TP)A Nos.834 & 835/Bang/2014 Page 2 of 6

ORDER

Per Sunil Kumar Yadav, Judicial Member

These are cross appeals preferred by the revenue and the assessee

against the order of the CJT(Appeals) inter alia on various grounds which

are as under:-

"ITA No.834/Bang/2014

I. The order of the Ld CIT(A) is opposed to law and facts of the case.

2. . The Ld. CIT(A) has erred in deleting the 18 comparables by adopting 0% RPT filter from the final 27 comparables selected by the TPO.

3. The CIT(A) has erred in disallowing the assessee's claim· of reducing the communication charges, telephone expenses, and•. postal expenses from total turnover.

4. For these and such other grounds that may be urged atthe · time of hearing."

ITA No.835/Bang/2014

"Based on the facts and circumstances of the case and in law, Volvo India Private Limited (hereinafter referred to as "Appellant"), respectfully craves leave to prefer an appeal against the appeal order passed by the learned Commissioner of Income­ Tax (Appeals), LTU [hereinafter referred to as the "learned CIT(A)-] under section 250 of the Income-tax Act, 196 I ("Act") on the following grounds:

That on the facts and circumstances of the case and in law:

I. The order of the learned CIT(A) is based on incorrect interpretation of law and facts and is therefore bad in law.

lT(TP)A Nos . .834 & 835/Bang/2014 Page 3 of 6 _

2. The learned CIT(A) has erred in law and facts in confirming the addition of Rs. 43,62,73,000 and Rs. 2,46,91,315 made by the Assessing Officer ("AO")/Transfer Pricing Officer ("TPO") to the total income of the Appellant on account of adjustment in the arm's length price of the management fee paid and the provision of engineering design services transaction entered by the Appellant with its Associated Enterprises (-AEs");

3. The learned CIT(A) has erred in law and facts, by confirming the order of the learned AO/ TPO and not accepting the analysis undertaken on a bona fide basis by the Appellant in accordance with the provisions of the Act read with the Income Tax Rules, 1962 ("the Rules"), for the determination of the arm's length price in connection with the impugned international transactions and holding that the Appellant's international transactions are not at arm's .length,

Transfer Pricing adjustment relating to payment of Management/Marketing support Fee

4. The learned . CIT(A) has erred in law. and facts, by confirming disallowance made by the AO/ TPO in respect of payment of management- & marketing support services fee by the Appellant by: · · · · · · · · ·

a) Not accepting the . Appellant's plea that .. the impugned transaction should not be benchmarked separately but must be aggregated: with : other closely linked international transactions. -_ - - · ·

b) Not appreciating the benefit I economic value/ commercial value derived by the Appellant from the management & marketing support services received from its AEs.

c) Wrongly upholding thatthe Appellant's efforts alone ensured the steep rise in sales while the AE's services were diffuse and had no impact. ·

d) The learned CIT(A)ITPO has not appreciated the evidence produced for usage of marketing intangibles (brand) to demonstrate receipt of services

IT(TP)A Nos.834 & 835/Bang/2014 Page4of6

Transfer pricing adjustment relating to provision of Engineering Design Services:

5. The learned CIT(A) has erred in law and facts, by confirming the addition made by the learned AO/ TPO in respect of the transaction relating to provision of engineering design services by:

a) Not accepting the Appellant's plea that the learned AO/TPO erred in rejecting the transfer pricing documentation maintained by the Appellant.

b) Rejecting the Appellant's plea that the learned AO/TPO erred in conducting a fresh comparability analysis based on re­ characterization of the nature of activities undertaken by the Appellant (from engineering design services to IT enabled services).

c) By applying and upholding the applicatio1'l of additional filters in determining the arm's length price of the engineering design services segment. · ·

d) Accepting_ the companies in the analysis which: do not satisfy the test of cornparability and rejecting companies comparable to that of the Appellant.

e) Not accepting the Appellant's plea that the le~rned AO/TPO has erred in not applying multiple year data for comparable companies and using data pertaining _to Financial Year 2006- 07 alone.

f) Upholding the learned AOITPO's . action of collecting selective information of companies by exercising powers granted under section 133( 6) of the Act.

g) Upholding the learned AO/TPO's action of not allowing risk adjustment to be made to the comparables selected

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IT(TP)A Nos.834 & 835/Bang/2014 Page 5 of 6

6. The learned CIT(A) erred in confirming the imposition of interest under section 234B and 234D of the Act.

The Appellant submits that each of the above grounds is independent and without prejudice to one another.

The Appellant craves leave to add, alter, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal, so as to enable the Hon'ble Tribunal to decide on the appeal in accordance with law."

2. During the course of hearing, the Id. Counsel for the assessee has

invited our attention that they have approached the Competent Authorities

for settlement of disputes through Mutual Agreement Procedure (MAP). In

the light of these facts, the assessee does not want to pursue its appeal in

ITA No.835/Bang/2014. Therefore, he wants to withdraw the same, to

which the revenue has no objection. Accordingly, the assessee's appeal is

dismissed as withdrawn.

3. So far as revenue's appeal is concerned, ground No.2 is covered by

the judgment of the jurisdictional High Court in the case of Tata Elxsi Ltd.

(349 /TR 98) (Kam}, therefore no interference in the order of the

CIT(Appeals) iscalled for.

4. With regard to ground No.3, the ld. DR has contended that this issue

relates to TP issue and the assessee has withdrawn its appeal in this

regard, therefore he does not want to press the ground. Accordinqly, this

ground is dismissed.

IT(TP)A Nos.834 & 835/Bang/2014 Page 6 of 6

5. In the result, the appeal of the assessee as well as the revenue are

dismissed.

Pronounced in the open court on this I 9th day of January, 2018.

Sd/-

( INTURJ RAMA RAO ) Accountant Member

/ Desai Smurthy /

Copy to:

I. Appellant 2. Respondent 3. CIT.-· 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guardfile

Sd/-

( SUNIL KUMAR Y ADA V) Judicial Member

Bangalore, Dated, the 19th January, 20 I 8.

By order

Senior Private Secretary IT AT, Bangalore.