Relief to Megger India: Income Tax Dept to re-consider disallowance of availing of Intra-Group Services

While granting relief to Megger India, the Income Tax Appellate Tribunal (ITAT) Mumbai bench directed the Assessing Officer to reconsider the disallowance of intra-group services.

The appellant-company is in the business of importing and selling test instruments and metres from its principals in the United Kingdom. The department believed that the Appellant received no tangible or direct benefit from receiving intra-group services, and that the Appellant failed to provide sufficient proof to demonstrate that the services were actually rendered by the AE, despite the Appellant-details, Company’s explanations, and evidence.

The assessee argued before the Tribunal that the issue was squarely handled in favour of the assessee by the ITAT judgement in the assessee’s own case for AY 2012-13.

“The AO has contradicted himself that he is not applying the benefits test,” the Tribunal bench of Judicial Member Pavan Kumar Gadale and Accountant Member Shameem Yahya concluded. We find that the above order’s proposition is appropriate to the facts in this instance, to the degree that ITAT has set aside the order, DRP’s remark that the agreement should have been drawn into by the parties in a specific manner by containing various other articles, and so on. This remark holds true for this year as well. However, because the AO has highlighted that the assessee has not provided the requisite documentary proof and the assessee’s Ld. Counsel has agreed to the AO’s examination of documents, we remit the matter to the AO’s file for examination of the documents exclusively. Following that, the AO would make a decision based on the law, taking into account the ITAT judgement in the assessee’s own case as well as our previous observations.”