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2019 (8) TMI 1663 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- Respectfully following the decision of the Co-ordinate Bench of this Tribunal in the case of Mobility Infotech India (P) Ltd., [2018 (8) TMI 1890 - ITAT BANGALORE] we direct (1) the exclusion of Infosys BPO Ltd., from the final set of comparables and (2) remand the issue of comparability of the other four companies, namely (i) Universal Print Systems Ltd., (ii) BNR Udyo Ltd., (iii) TCS E-serve Ltd., and (iv) Excel Infoways Ltd., back to the file of the TPO with the same directions rendered by the Co-ordinate Bench in the case of Mobility Infotech India (P) Ltd. M/s. Crystal Voxx Ltd., (Crystal) in the set of comparables - Respectfully following the decision of the Co-ordinate Bench of this Tribunal in the case of FNF India P. Ltd., [2019 (7) TMI 1760 - ITAT BANGALORE]we hold and direct that this company, Crystal Voxx Ltd., is to be included in the final set of comparables. Inclusion of M/s. Informed Technologies Ltd., in the final set of comparables - As perused the excerpts of the Annual Report of the company ‘Informed’ placed before us and find that at page 8 thereof under the head ‘Segmental Reporting’ the company has only one reportable segment, namely ‘BPO Segment’ which is functionally comparable to the assessee. Further, it is seen that total sales / turnover reported on page 24 thereof is also entirely from BPO activities and as such the filter applied by the TPO of ITES is satisfied, as the “Other Income” is clearly non-operating revenue - effect of “Other Income” on the margin of the company has not been examined. It is also seen that while suo moto excluding this company ‘Informed’, from the set of comparables, the DRP has not put either of the parties on notice. We are of the view that it would be appropriate to restore the matter to the TPO for examination of the point raised by the assessee before the DRP and decide on the comparability of this company, Informed Technologies Ltd., afresh. Needless to add, the AO / TPO shall afford the assessee adequate opportunity of being heard and to put forth details / submissions required in the matter, which shall be duly considered by the AO / TPO before deciding the matter. Disallowance under section 14A r.w. Rule 8D - HELD THAT:- AO observed that the assessee had made investments in shares yielding exempt dividend income which are claimed exempt from tax under section 10(34) - AO did not accept the assessee’s claim that no expenditure had been incurred to earn the exempt income and invoking the provisions of section 14A r.w. Rule 8D(2)(iii) to compute the indirect expenses attributable to the earning of such exempt income of ₹ 91,96,047/-, as per the formula given in Rule 8D. Except for repeatedly raising the plea that no disallowance is called for, nothing was brought on record by the assessee to controvert the finding of the authorities below that disallowance of ₹ 7,33,395/- computed as per the provisions of section 14A r.w. Rule 8D(2)(iii) was called for in the facts and circumstances of the case. We, therefore, find no infirmity in the order of the AO / DRP and uphold the disallowance made under section 14A r.w. Rule 8D. Charging of interest under section 234B and 234C is consequential and mandatory and the AO has no discretion in the matter. This proposition has been upheld by the Hon’ble Apex Court in the case of Anjum H. Ghaswala [2001 (10) TMI 4 - SUPREME COURT] and we, therefore, uphold the action of the AO in charging the assessee the aforesaid interest u/s 234B and 234C. Short credit for Tax paid - HELD THAT:- It is trite law that the assessee is entitled to be allowed full credit for taxes paid by it to the Government exchequer. We, therefore, direct the AO to examine and verify the assessee’s claim and allow credit for taxes paid by it as per law. Consequently, ground of the assessee’s appeal is allowed for statistical purposes.
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