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TP adjustment with respect to receipt of Intra-Group Services


Court :
ITAT Delhi

Brief :
The present appeal has been f i led by the assessee against the order dated 30.03.2021 passed by AO u/s 143(3) r.w.s. 144C(3) of the Income Tax Act,1961

Citation :
ITA No. 489/Del/2021 : Asstt. Year : 2016-17

Before Sh. Amit Shukla, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
(Through Video Conferencing)

ITA No. 489/Del/2021 : Asstt. Year : 2016-17
SA No. 75/Del/2021 : Asstt. Year : 2016-17

AT&T Global Network Services
(India) Pvt. Ltd., Vatika Triangle, 3rd
Floor, Sushant Lok-I, Block-A,
Gurgaon, Haryana-122002




Circle-2(1), National EAssessment
New Delhi


Assessee by : Sh. Ravi Sharma, Adv. &
Sh. Rishabh Malhotra, AR
Revenue by : Sh. Surenderpal, CIT DR &
Ms. Shashi Kajle, Sr. DR
Date of Hearing: 28.07.2021

Date of Pronouncement: 24.08.2021


The present appeal has been filed by the assessee against the order dated 30.03.2021 passed by AO u/s 143(3) r.w.s. 144C(3) of the Income Tax Act, 1961.

2. The assessee is providing seamless services to its customers was availing services from its AE. As the services required specialized knowledge and experience in the field, the assessee had entered into services agreement in the earlier years in order to avail such Intra Group services. During the year under consideration, the assessee availed these services from Global Customers Services Center. Similar issues arose before the Tribunal and on simi lar facts, the adjustment made in the hands of the assessee was deleted by the Tribunal.

3. The issue of intra group services, availed by the assessee has been benchmarked by the TNMM which has been found to be acceptable by the Tribunal for the earlier year 2014-15 and 2015-16. Since, the facts are identical, we hereby allow the claim of the assessee.

4. From the above, we find that Education Cess is not of the nature described in sections 30 to 36, Education Cess is not in the nature of capital expenditure, Education Cess is not personal expense of the Assessee, it is mandatory for it to pay Education Cess and for the purpose of computation of Education Cess, the Income ‘Tax’ is taken as the criteria for computational purpose. Thus, the expense of Education Cess is mandatory expenses to be paid but does not fall under capital expense and personal expenditure and hence may be al lowed as deduction.

5.Owing to the disposal of the appeal the assessee, the Stay Application No. 75/Del/2021 is dismissed as infructuous.

6. In the result, the appeal of the assessee is allowed and the Stay Application of the assessee is dismissed.
Order Pronounced in the Open Court on 24/08/2021

Please find attached the enclosed file for the full judgement.



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