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2022 (3) TMI 1507 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee, a captive service provider, rendering Software Development Services to its parent company need to be deselected. Admittedly the turnover of Infosys Ltd., R S Software India Ltd., and Sasken Communication Technologies Ltd are more than 200 crores. Considering the assessee being a captive service provider, aforesaid three companies should be excluded from the list of comparable companies. Working Capital Adjustment - It is settled principle that working capital adjustment cannot be restricted or can be negative. The assessee placed reliance on the decision in the case of Huawei Technologies India [2018 (10) TMI 1796 - ITAT BANGALORE] wherein coordinate bench of this Tribunal held that working capital should be allowed as per actuals. Respectfully following the view taken by coordinate bench of this Tribunal, we direct the Ld.AO/TPO to grant the WCA on actuals Depreciation on Software cannot be disallowed due to non-deduction of TDS - HELD THAT:- We note that the Ld.CIT(A) given direction to the Ld.AO to verify the TDS payments and allow the payments, which has not been implemented, till date. We direct the Ld.AO to follow the directions of the CIT(A) in light of the principles laid down by decisions referred to herein above and to consider the claim of assessee in accordance with law.
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