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2020 (7) TMI 645 - AT - Income TaxTP Adjustment - working capital adjustment - HELD THAT:- TPO in the instant case, without verification of the working submitted by the assessee at the time of hearing, simply disallowed the same, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore this issue to the file of the TPO with a direction to verify the working capital adjustment, the details of which has been given by the assessee and allow appropriate working capital adjustment to the assessee after due verification of the same. The ground raised by the Revenue is accordingly allowed for statistical purposes. Comparable selection - rejection of HCL Technologies Ltd. and HP Globalsoft Ltd. on account of substantial RPT - HELD THAT:- We find HCL Technologies Ltd. has got RPT of 71.09% and HP Global Soft Ltd., has got 87.44% RPT. Although the TPO at page 5 of the order has mentioned that the objection of the assessee regarding related party transactions were not substantiated with any account details, however, from the details furnished by the assessee in we find the assessee had categorically mentioned before the TPO regarding substantial RPT. It has been held in the case of Agilant Technologies International (P) Ltd 2013 (7) TMI 843 - ITAT DELHI that a potential comparable having more than 25% of the related party transactions is to be ignored. The Delhi Bench of the Tribunal in the case of Nokia India Pvt. Ltd. vs. DCIT 2014 (11) TMI 101 - ITAT DELHI has also taken a similar view. Under these circumstances, we do not find any infirmity in the order of the CIT(A) in directing the TPO/AO to exclude the above two comparables on account of huge related party transactions. Exclude Satyam Computer Services Ltd., from the list of comparables as the financial results of the said company is the result of admitted financial irregularities and conspiracy hatched and committed by the directors and cannot be relied upon. Depreciation on computer peripherals @ 60% - Hon’ble Delhi High Court in the case of CIT vs. BSES Yamuna Power Ltd, [2010 (8) TMI 58 - DELHI HIGH COURT] has held that computer accessories and peripherals being an integral part of computer system are eligible for depreciation at a higher rate of 60%. The various other decisions placed in the paper book filed by the assessee also support the case that computer peripherals being an integral part of computer systems are eligible for depreciation at a higher rate of 60%. Nature of expenditure - software upgradation expenses - revenue or capital expenditure - HELD THAT:- Expenses are incurred for up-gradation of software which was not customized software. They were general software available off the shelf. In view of this, following the decision of the jurisdictional High Court, the AO is directed to allow the expenses. CIT(A), while deleting the disallowance made by the AO has followed the decision of the Hon’ble Delhi High Court in the case of CIT vs. G.E. Capital Services Ltd.,[2007 (7) TMI 185 - DELHI HIGH COURT] . DR could not bring any fresh material so as to take a contrary view than the view taken by the Hon’ble Delhi High Court which has been followed by the ld.CIT(A).
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