Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (7) TMI 530 - AT - Income TaxTransfer pricing adjustment - Not applying TNMM to the internal uncontrolled transactions of the company for determining the ALP - Held that:- It is a fact on record, assessee during the year has provided software development services to both AE and Non-AEs. There is no dispute to the fact that assessee in its TP documentation has undertaken an analysis by applying internal TNMM. The TPO in his order also accepts this fact. It is also the plea of assessee that as it has maintained segmental details with regard to the transactions made with AE as well as transactions made with non-AEs during the relevant period and has also maintained relevant record indicating segmental details with regard to both the transactions, then, as per rule 10B(3) internal comparables have to be given preference as price charged by assessee for controlled transactions with AEs can be compared with similar uncontrolled transactions with third parties. On examining relevant statutory provisions, we find merit in the submissions of ld. AR. As the assessee during the year has undertaken transactions with both AEs and non-AEs, and as claimed, has not only maintained segmental details of such transactions, but, has also undertaken comparative analysis in its TP study, it has to be looked into in an objective manner before rejecting the same. However, as noticed from the order passed by TPO, he has not assigned even a single reason why internal comparables/transactions should not be considered. Even the DRP has also not properly appreciated assessee’s contention in this regard. As far as observation of the DRP that uncontrolled transactions constitute merely 21.4% amounting to ₹ 44 crores as against huge volume of transactions with AE, therefore, it cannot be compared, we are of the view that claim of assessee cannot be rejected on such general observations. Before rejecting assessee’s analyzation under internal TNMM, departmental authorities are required to assign cogent reasons for not accepting the same. Only because volume of transaction is small or insignificant, on that ground alone it cannot be rejected.Since the matter has not been properly enquired into or examined ether by TPO or DRP, we are inclined to remit the issue to the file of TPO for examining afresh after due opportunity of being heard to assessee. TPO must make an endeavour to examine segmental details and find out whether internal transactions/comparables can form the basis of determination of ALP. - Decided in favour of assessee for statistical purposes. Not allowing credit of TDS - Held that:- Though, application u/s 154 has been filed by assessee AO has not dealt with the same. Considering the nature of dispute, we direct AO to verify the facts relating to the claim of TDS and if the online statement show credit of the aforesaid TDS in the name of assessee, the same may be allowed.Decided in favour of assessee for statistical purposes.
|