DCIT, Circle-11(1), Kolkata Vs M/s. AT&S India Ltd.

Parties Involved

Facts Summary

The case involves an appeal by the revenue against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2014-15. The assessee, M/s. AT&S India Ltd., had entered into a cost contribution arrangement for financing global information technology (IT) products and services with its group companies. The assessee reimbursed its due share of cost for a sum of INR 4,10,08,010/- to AT&S Austria Technologie & Systemtechnik Aktiengesellschaft (AT&S AG). The Tribunal of Income Tax Appellate Tribunal (ITAT) had previously ruled in favor of the assessee in similar cases for the assessment years 2009-10, 2010-11, 2011-12, and 2013-14. The revenue contested the disallowance of the arm's length price adjustment made by the Assessing Officer/Transfer Pricing Officer (AO/TPO).…

Legal Issues

• 1. Whether the CIT(A) erred in allowing the claim of the assessee without getting the facts verified by the AO from the respective records.
• 2. Whether the CIT(A) erred in deleting the adjustment made by the AO/TPO amounting to Rs. 4,10,08,010/- in respect to the payment of shared IT service cost to its AEs.
• 3. Whether the CIT(A) erred in concluding that the intra-group services provided by the AE under the head of IT services are not in the nature of stewardship activities.
• 4. Whether the CIT(A) erred in concluding that the payment for intra-group services was at arm’s length without examining the cost of such service provider and without examining mark-up element incorporated in the quantum of service fee charged by the AE.
• 5. Whether the CIT(A) erred in deleting the arm’s length price adjustment of Rs. 38,71,000/- made by the AO/TPO on account of sale of finished goods to its AEs.
• 6. Whether the foreign comparable companies selected by the assessee were located in different countries of Europe and engaged in distribution of large variety of electronic components including PCB, telecommunication parts and equipment but not solely the PCB.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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