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2019 (2) TMI 1322 - AT - Income TaxTP Adjustment - computation of arm’s length price - aggregation of international and domestic segments pertaining to IT segment - TPO re-characterized the assessee’s limited risk IT services as ITeS, thereby rejecting the functional analysis as documented in the Transfer Pricing Documentation - HELD THAT:- Assessee company has given all the information relating to international segment and domestic segment with the related party sales transaction of the assessee company with its AE’s. Besides that the TPO has also re-characterized the assessee’s limited risk IT services as ITeS, thereby rejecting the functional analysis as documented in the Transfer Pricing Documentation. The TPO while re-characterizing the IT services as IT enabled Services has not given any finding or reasons as to why the same is done. Thus, on both account that is aggregation of international and domestic segments pertaining to IT segment and the re-characterization of the IT services as IT enabled Services, the issues need to be addressed by the TPO after taking into account all the relevant evidence provided by the assessee company during the assessment proceedings which the TPO failed to take into account. Therefore, it will be appropriate to remand back the entire Transfer pricing issue to the file of the TPO/AO. Allowability of provision for warranty - HELD THAT:- The assessee company’s submissions were not properly taken into account by the Assessing Officer during the Assessment Proceedings while deciding the provision for warranty. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer who will decide the same after taking into account all the submissions and evidence provided by the assessee company during the assessment proceedings.
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