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2022 (9) TMI 1473 - AT - Income TaxTP Adjustment - determination of Arm's Length Price (ALP) in respect of an international transaction of rendering of Software Development Services (SWD services) by the assessee to its Associated Enterprise (AE) - comparable selection - HELD THAT:- Rejection of comparables as functionally dissimilar with that of assessee. Infosys Ltd., Larsen and Toubro Infotech Ltd. , Persistent Systems Ltd. and Thirdware Solutions Ltd. need to be deselected accordingly. Akshay Software Technologies ltd. and Maverie Systems Ltd. ("Maverie") - As relying on decision of this Tribunal rendered in the case of EMC Software and Services (India) Pvt. Ltd., (2019 (12) TMI 1279 - ITAT BANGALORE] the comparability of this company should be remanded to the AO/TPO for fresh consideration. 12T2 India Limited - This issue with regard to the comparability of this company has to be remanded to TPO/AO for fresh consideration as the submissions made above were neither considered by the TPO nor by the DRP. We hold and direct accordingly. Adding Notional interest on outstanding receivables - HELD THAT:- The fact remains that the transaction with Non-AE is non-realization of receivables beyond the credit period and not charging interest on such delayed receivables becomes a comparable uncontrolled transaction. Hon'ble Delhi High Court in the case of MC. Kinley Knowledge Centre (I) Pvt. Ltd.[2021 (10) TMI 751 - DELHI HIGH COURT] took the view that wherever payments are received in advance that cannot be ignored. By the same analogy, the outstanding payable that was paid beyond the due date should also be considered when determining ALP of extended / delayed realization of outstanding receivable. Without going into the question whether the delay in realization of outstanding receivables would be an international transaction or not, on which there are conflicting decisions prior to amendment of section 92B of the Act, we are of the view that the calculation of ALP has to be remanded to the AO/TPO to compute ALP, after considering (i) outstanding payable to AE which was paid belated by the assessee and (ii) delay in realization of outstanding receivables beyond the credit period as transactions with Non-AE. We hold and direct accordingly. Depreciation on computer servers, software and networking equipment - @ 15% by considering it as "plant and machinery" OR "computers" at 60% - HELD THAT:- We find that the issue raised herein is no longer res-integra and has been decided in the case of Mphasis Ltd.[2021 (3) TMI 1072 - KARNATAKA HIGH COURT] wherein held that computer accessories such as switches and routers form part of peripherals of computer system and hence entitled to depreciation at 60%. Ground raised by the assessee. Short credit of TDS - as submitted that the AO erred in not granting appropriate credit of tax deducted at sourc-HELD THAT:- AO will verify the claim of the assessee and allow relief, if found correct. Non-grant of advance tax credit - as submitted that the AO erred in not granting the advance tax credit amounting paid by Teleca Software Solutions India Pvt. Ltd. which was merged with the assessee w.e.f. 01 April 2013 - HELD THAT:- We are of the view that a direction to the AO to verify the claim of the assessee and allow relief if found correct, would be sufficient. We hold and direct accordingly. Non-grant of MAT credit - as submitted that the AO erred in not granting relief of MAT credit to the extent of difference between assessed tax computed under normal provisions of the Act and MAT computed even after having sufficient MAT credit - HELD THAT:- We direct the AO to verify the claim of the assessee and allow relief in accordance with law. Charging of Interest u/s 234A - as submitted that the AO erred in levying interest without considering that the assessee has filed return of income within the due date prescribed u/s 139 - HELD THAT:- We are of the view that a direction to the A0 to verify the claim of the assessee and allow relief as per law, would be sufficient. We direct accordingly. Assessee appeal is partly allowed.
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