Honda R&D (India) wasn’t involved in R&D activity and rather was providing market support services to its AE: ITAT [Read Order]

Honda R&D - R&D - market support services - AE - ITAT - Taxscan

The Income Tax Appellate Tribunal (ITAT), New Delhi Bench held that the assessee, Honda was not involved in Research and Development (R&D) activity and rather was providing market support services to its AE.

The assessee, M/s Honda R&D (India) Pvt. Ltd. (HRDI) challenge the order passed by the Tribunal and has pointed out mistakes

The petitioner prayed to recall the order and modify the Tribunal’s order. To this extent there appears to be a clear mistake apparent from the record which deserves to be corrected.

The assessee pointed out that the High Court in assessee’s own case has not restored the matter to the Tribunal, but has given a categorical finding that the assessee was not involved in R&D activity and rather was providing market support services to its AE.

The coram consists of R.K. Panda and Suchitra Kamble held that the order was not justified in concluding that HRDI was involved in R&D activity and not provision of market support services. The order of the CIT(A), which was reversed by the ITAT, is restored.

The Tribunal held that an order of another Co-ordinate Bench of ITAT has been overlooked in HRDPs own case for AY 2004-2005 had remanded the matter to the CIT(A), acting on the remand report of the TPO for AY 2005-06. By taking a different view and by again sending to the CIT(A) the entire issue of determining which comparables were best suited for the exercise of determination of ALP, the ITAT was adding to the confusion resulting from contradictory orders.

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