FTS Classification in Management and Administrative Services: ITAT deletes ALP Adjustment Due to Lack of Technology Transfer

ITAT (Income Tax Appellate Tribunal) deleted an ALP (Arm's Length Price) adjustment related to the classification of FTS (Fees for Technical Services) in management and administrative services due to the lack of technology transfer. The tribunal reasoned that for a payment to be classified as FTS involving technology transfer, there must be an actual transfer of technical knowledge, experience, skill, know-how, or processes. In the absence of such a transfer in the management and administrative services provided, the ALP adjustment was deemed unwarranted. This ruling clarifies the scope of FTS under transfer pricing regulations.