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2016 (7) TMI 1364 - AT - Income TaxTPA - selection of comparable - selection criteria - bench marking international transactions - Held that:- Assessee provides computer aided software solutions, maintenance and imaging services to its AE which provided services to oil and gas companies operating in India and was granted permission for setting up 100% EOU under STPI scheme. The assessee was categorized as ITES service provider. When the assessee has furnished segmental profits, the entity level profits cannot be considered for bench marking international transactions in view of the Jurisdictional High Court decision. Therefore, respectfully following the said decisions, we hold that the ALP of the assessee should be determined only on the international transactions and not on the entire transactions at entity level. We also find from various decisions that the four comparables selected by the TPO out of 9 have been rejected for various reasons like high turnover, functionally different, abnormal profits etc. Taking the totality of the facts and circumstances, we are of the view that this matter has to go back to the TPO for denovo adjudication in view of the fact that no proper opportunity was given by the TPO. Therefore, we direct the TPO to complete the denovo assessments keeping in view the decisions of the Jurisdictional High Court and various other Tribunals in rejecting various comparables selected by the TPO after providing adequate opportunity of being heard to the assessee. Upward adjustment on account of invoices raised on ONGC without appreciating that the same were pending acceptance/approval by ONGC - Held that:- We hold that the Assessing Officer should examine this matter afresh in the light of the submission that the said amount has already been taxed in the Assessment Year 2010-11. Therefore, we restore this issue to the file of the Assessing Officer for fresh adjudication. We make it clear that this amount should be taxed either in the Assessment Year 2010-11 or in the Assessment Year 2009-10 but not in both Assessment Years since it amounts to double taxation. The Assessing Officer shall consider and decide accordingly. Addition made on account of remission of liability - Held that:- We restore this issue to the file of the Assessing Officer who shall pass necessary order keeping in view of the fact that this amount was already taxed in the Assessment Year 2008-09 against which appeal is pending and if assessee succeeds in Assessment Year 2008-09, the Assessing Officer shall tax this amount in Assessment Year 2009-10 as offered by the assessee himself. In case, if the assessee fails in the Assessment Year 2008-09, the Assessing Officer shall not make addition of this amount in the current Assessment Year i.e. 2009-10. Thus we restore this matter to the file of the Assessing Officer with a direction to pass consequential orders accordingly.
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