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2014 (6) TMI 324 - AT - Income TaxTransfer pricing adjustment – International transaction of software development research and other services rendered – Held that:- Selection of comparables – Functionally not comparable – Held that:- The assessee’s objections regarding the comparables have not been properly dealt with - the matter pertaining to the above may be sent back to the file of the TPO to consider the issue fresh - the assessee agreed to this proposition – the direction should be given to the TPO that where necessary segmental data are not available the same may be obtained by issuing direction u/s 133(6) and if the comparables are found functionally not comparable, the same may be rejected – thus, the matter is required to be remitted back to the TPO for fresh adjudication – Decided in favour of Assessee. Assessee has elaborately submitted that TCS is engaged not only in software development services but also sale of products, assurance services, cloud consulting, industrial services etc. -The turnover of TCS was ₹ 2,245 crores as against ₹ 31.86 crores of the assessee - There were related party transaction of 59% as against assessee 25% which were engaged in diverse functions - the objections by the assessee are glaring and the same needed to be addressed cogently by the TPO and the DRP - even administrative orders have to be consistent with the law of natural justice - the comparable TCS should be rejected from the list of comparables on both the ground that the same was not functionally comparable as well as the fact that assessee’s objections were not at all addressed – Decided in favour of Assessee.
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