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2022 (8) TMI 1412 - AT - Income TaxTDS u/s 195 - Disallowance of legal and professional fees made u/s 40(a)(i) - HELD THAT:- In order to bring the impugned payments within the Article 12 of India- USA DTAA, the services should have been “made available” technical knowledge etc to the assessee herein. In the instant case, the assessee has only availed professional services of non-residents in connection with tax compliances and the technical knowledge has not been “made available”. Since the make available clause fails, the impugned payments cannot be taxed as Fee for Included services under Article 12 of the India-USA DTAA. In this view of the matter, there is no necessity to refer to Article 15 also. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the disallowance of legal and professional fees made u/s 40(a)(i) - Thus direct the AO to delete the disallowance of legal and professional charges. TP adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee and with extraordinary events need to be deselected from final list. Infosys BPO - Considering the financial report that there was extraordinary events occurred during the financial year we direct AO/TPO exclude this company as comparable. Excel Infoways Ltd (Seg) (IT/BVPO) company as engaged in software testing, verification and validation of software and also on the basis that it had huge turnover and was engaged in providing KPO services. should be excluded from the final list of comparable companies. TCS E-serve Ltd. company be excluded on the basis that it was engaged in software testing, verification and validation of software and also on the basis that it had huge turnover and was engaged in providing KPO services. BNR Udyog Ltd., (Seg) (Medical Transcription) - RPT filters applied by the TPO is a 25% but the RPT turnover ratio works out to 49.60%, therefore, on the basis of RPT filter, the assessee cannot be considered as good comparable for the relevant assessment year. Therefore, the AO/TPO to is directed to exclude this comparable for computation of ALP. Informed Technologies Pvt. Ltd. - TPO has considered it while calculating PLI and the ld.AR has also requested for inclusion of this company vide written synopsis cited supra and it is not clear why the assessee has raised this issue before us. However, while calculating the PLI of the assessee company, if this company has not been considered in the final set of comparable for computation, then the AO/TPO shall consider it for calculating PLI.
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