IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : I : NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No.1408/Del/2016 Assessment Year : 2011-12 ITA No.539/Del/2017 Assessment Year : 2012-13 ITA No.5415/Del/2017 Assessment Year : 2013-14 ITA No.6466/Del/2018 Assessment Year: 2014-15 YKK India P. Ltd., Vs DCIT, Global Business Park, Circle-27(2), 3rd Floor, Tower-A, New Delhi.

Mehrauli Gurgaon Road, Gurgaon, Haryana – 122 002. PAN: AAACY0201G (Appellant) (Respondent)

Assessee by : Shri Nageswar Rao, Advocate, Revenue by : Shri Dharamvir Singh, CIT-DR Date of Hearing : 06.03.2025 Date of Pronouncement : .03.2025 ORDER PER ANUBHAV SHARMA, JM:

These appeals are preferred by the assessee against the final assessment orders dated 21.12.2015 (for AY 2011-12), 25.11.2016 (for AY 2012-13), 22.06.2017 (for AY 2013-14) & 10.08.2018 (for AY 2014-15) passed u/s 143(3)/144C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the DCIT, Circle-27(2), New Delhi (hereinafter referred to as the Ld.

AO).

2. On hearing both the sides, it comes up that the appeals before us have common questions involved and the ld. representatives of both the sides have relied the facts and impugned orders of AY 2014-15 for making their submissions. Thus these appeals are adjudicated together and facts or impugned orders wherever relevant and relied shall be taken into consideration for AY 2014-15.

3. The relevant facts are that assessee/appellant YKK India is a wholly owned subsidiary of YKK Japan and is primarily engaged in the Manufacture of slide fasteners (zippers). YKK India manufactures metallic, viz. aluminum, golden brass and antique brass and non-metallic, viz. plastic, vislon and polyester zippers. YKK India has increasingly been incurring expenditure on anti-counterfeit action/protection of brand name, trademarks etc. in addition, customer education is another area of focus of the Company.

4. The assessee’s return of income for AY 2014-15 was selected for scrutiny under compulsory category as the assessee’s international transaction with associated enterprise was above the threshold. Notices u/s 143(2) and u/s 142(1) of the Act were issued by the AO and, thereafter, the case was referred to TPO u/s 92CA with the approval of the competent authority. The TPO examined the transfer pricing documentation provided by the assessee and with regard to international transactions of nature of payment of royalty, provision of support services and payment of technical fee, transfer pricing adjustments. Further, the AO has made disallowance u/s 40A(7) of the Act. Against the TPO order dated 31.10.2017, the assessee had filed objection before the DRP and the same were dismissed by order dated 17.07.2018. Consequently, the final assessment order was passed on 10.08.2018 and against same the assessee is in appeal raising the following grounds:-

“Based on the facts and circumstances of the case, the Appellant respectfully submits that:

Transfer Pricing grounds

1. General Ground:

1.1. The Learned Deputy Commissioner of Income Tax, Circle 27(2), New Delhi (hereinafter referred to as 'Ld. AO') pursuant to directions of Dispute Resolution Panel (Hon'ble DRP') - II, has erred on facts and circumstances of the case and in law in completing the present assessment at an income of INR 1,05,79,27,320/- as against the returned income of INR 88,37,29,340/- declared by the Appellant and is liable to be quashed.

1.2. The Ld. TPO erred in making an adjustment of INR 8,69,41,250 in respect of technical fee, INR 8,50,55,674 in respect of royalty payments and INR 17,86,156 in respect of provision of support services under section 92CA(3) of the Act.

The Hon'ble DRP erred in upholding the same.

2. Rejection of the economic analysis of the Appellant

2.1. That on the facts and circumstances of the case and in law, Ld. TPO/ Hon'ble DRP have erred in not accepting the economic analysis of the Appellant, for determination of the arm'