IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : H : NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER Assessment Year: 2013-14 Fujitsu India P. Ltd., Vs National Faceless Assessment Rectangale-1, D-4, Centre, District Centre, New Delhi.

Saket, New Delhi – 110 019. PAN: AAACF4170D (Appellant) (Respondent)

Assessee by : Shri K.M. Gupta, Advocate, Ms Shruti Khimta, AR & Shri Kaskaran Singh, CA Revenue by : Shri S.K. Jadhav, CIT-DR Date of Hearing : 07.01.2025 Date of Pronouncement : 24.01.2025

ORDER

PER ANUBHAV SHARMA, JM This appeal is preferred by the assessee against the final assessment order dated 18.02.2022 passed u/s 143(3) r.w.s. 254 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the National Faceless Assessment Centre, Delhi (hereinafter referred to as the Ld. AO).

2. The facts in brief are that Fujitsu India Private Limited (‘Fujitsu India’/ the ‘Company’/ the ‘Assessee’) is a wholly owned subsidiary of Fujitsu Technology Solutions, Holding, B.V, Netherlands ('Fujitsu Netherlands’), incorporated in 1997. Fujitsu India is engaged in trading of IT products and provision of IT solutions and services in India. Portfolio of Fujitsu India includes servers, storage systems, workstations, notebooks, desktops & displays. Fujitsu India is also engaged in IT product, Maintenance and Support services. The International transactions undertaken by the Assessee during AY

2013-14 are :

• Purchase of goods for trading • Purchase of spares • Provision of IT services • Receipt of IT services • Receipt of maintenance support services • Provision of business support services  Purchase of fixed assets • Reimbursement/recovery of expenses

2.1 During the course of TP Assessment proceedings, the Ld. TPO, considered TNMM as the most appropriate method against RPM applied by the Assessee in the distribution segment. While doing the above, the Ld. TPO concluded the characterization of the Assessee. Further, the Ld. TPO did not allow the working capital adjustment to the operating profit margins of the comparables. Thus the Ld. TPO, vide order dated October 21, 2016, enhanced the income of the Assessee by INR 44,94,92,709 on account of change in most appropriate method for benchmarking the international transactions of the Assessee. The Dispute Resolution Panel (‘DRP’) upheld the approach followed by the Ld. AO/TPO, however allowed working capital adjustment to the Assessee in its the directions dated September 21, 2017. Additionally, the DRP also directed the Ld. TPO/AO to compute adjustment on account of non-receipt of the reimbursement for “allegedly excessive” AMP expenses by considering gross profit earned by the Assessee in its trading segment as an appropriate mark-up. The case of assessee is that DRP had not provided any opportunity to the Assessee in this respect. Pursuant to the DRP direction, the Ld. TPO computed an adjustment on account of AMP expenses incurred by the Assessee. Hence, on conclusion of the assessment proceedings i.e. receipt of the final assessment order, two adjustments were made - one on account of the margin earned in the distribution segment with change in the most appropriate method and second was in relation to the alleged excess AMP spend. The assessee approached this Tribunal and a co-ordinate bench ruled in favour of the Assessee for the adjustment made in the distribution segment, granting a relief of INR 41,74,29,552 by considering RPM as the MAM against the use of TNMM by the Ld.TPO. Then for the adjustment made in relation to alleged excessive spend on AMP, the bench remitted the matter back to the file of Ld. TPO for fresh adjudication, since the DRP did not provide any opportunity of being heard to the Assessee during the relevant course of proceedings, thereby setting aside the adjustment of INR 42,33,63,864 (refer page 153 to 155 of the appeal set).

2.2 Then Ld. TPO had via an initial notice sought certain information from