In the Nike case reported at (2022] 27 ITR (Trib)-OL 322 (ITAT[Bang] the Transfer Pricing Officer took the view that the reimbursement expenditure was not related to the business of the assessee and determined the arm’s length price at nil alleging failure of the assessee to prove business necessity or expediency in making such payment. The Tribunal upheld this ground.
On the contrary the Ahmedabad bench in  27 ITR (Trib)-OL 99 (ITAT[Ahm]) held TPO action untenable when he proceeded to make disallowance by holding that there was no commercial expediency in making reimbursements. The bench therein held that the Transfer Pricing Officer should not venture into the job of the Assessing Officer or in other words go into the merits or admissibility of the expenditure incurred.
These two decisions go opposite to each other and leave uncertainties in routine nature of transactions in the ordinary course of running of any business among holding subsidiaries in an international group structure where resources are shared and costs are distributed among entities for optimising use of group resources. This dichotomy need to be addressed by the CBDT at the earliest.