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2020 (6) TMI 834 - AT - Income TaxTP Adjustment - comparable selection in ITES Segment - HELD THAT:- Exclusion of companies as functionally dissimilar with that of assessee. We direct the TPO to exclude (i) Infosys BPO Limited (ii) TCS e-serve Ltd. (iii) BNR Udyog Ltd. (iv) Excel Info ways Ltd, from the list of comparables for determination of ALP in ITES Segment. And in the case of (v) Universal Print Systems Ltd, the comparable is restored to the file of TPO for fresh adjudication. Negative Working Capital Adjustment - TPO not properly computed in ITES segment for determination of ALP - We find the TPO in ITES segment has computed arithmetic mean margin on cost at 28.11% and negative working capital adjustment of -8.70% and worked out adjusted margin for determination of ALP at36..81%. Ar even before the tribunal could not demonstrate that the working capital adjustments based on OECD guidelines are not applicable to financials of the assessee. We have dealt on disputed issue in Software Development Segment (SDS) in Para 7, above relying on the decision of Tecnotree Convergence Pvt. Ltd. Vs. DCIT [2018 (6) TMI 1688 - ITAT BANGALORE] in the case of and dismissed the ground of appeal and the same decision shall equally apply. Accordingly, we dismiss this ground of appeal in ITES segment. TDS u/s 40(a)(ia) on software expenses - HELD THAT:- Prima facie, the assessee is engaged in software development services and ITES and incurred expenses for purchase of software and AMC charges. Ar emphasized on revenue expenditure but could not support with evidences. Further there is no clarity in respect of deduction of tax at source. Hence, considering the facts and circumstances, we are of the opinion that the assessee has to establish that recipient/payee has paid the tax on income and discharged tax obligation. Accordingly, we restore this issue to the file of Assessing officer for examination and verification of facts and allow the ground of appeal for statistical purpose. Computation of the book profits u/s 115JB on provision for loyalty bonus - Ar submitted that the loyalty bonus should not be considered for calculation of the book Profit u/sec 115JB and relied on the co-ordinate Bench decision in assessee own case for the Asst. Year 2008- 09 - HELD THAT:- We, considering the decision of co-ordinate bench and to compare the facts of present case, restore this disputed issue for limited purpose to the file of A O for verification and allow the ground of appeal of the assessee for statistical purposes.
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