Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (3) TMI 291 - AT - Income TaxTP adjustment - Addition regarding provision of guarantee - HELD THAT:- As relying on own case [2020 (8) TMI 562 - ITAT MUMBAI] we hold that ALP of Corporate guarantee shall be computed @ 0.5% of guarantee value and as regards the determination of ALP for provision of performance guarantee, the same is restored to the file of the ld. TPO for fresh adjudication in the light of above mentioned directions given by this Tribunal. Accordingly, the ground Nos. 1-1.5 raised by the assessee are allowed for statistical purposes. TP adjustment made in respect of provision of back office services - TPO had accepted the segmental results of the first two AEs - TPO had only doubted the segmental results of the third AE i.e. Intelenet UK Services Ltd. The allocation method of expenditure are the same for all the three AEs - HELD THAT:- We find the basis of allocation of various expenses has been clearly given by the assessee for each of the segments as is evident from the aforesaid table. In any case, we find the main grievance of the ld. DRP seems to be that AE revenue is only ₹ 19 Crores and Non-AE revenue is ₹ 176 Crores and salary cost of back office income unit seems to be more by 24% and requires allocation to non-AE unit. If this observation is to be accepted then, the same would only be beneficial to the assessee as the same would result in increase of margins for the AE BPO segment. This fact itself proves that the ld. DRP had not applied its mind at all on the basis of allocation of expenses between the AE units and the non-AE units. In view of the above, the other grounds raised by the assessee on inclusion and exclusion of the comparables need not be gone into at all and they are left open. Going by the segmental data of back office services income which is evident from the table above, the assessee had earned a margin of 20.45% and even assuming if all the comparables chosen by the ld. TPO are to be accepted, the arithmetical mean margin of comparables is only 20.52%. Hence, the transactions of the assessee would be at arm's length requiring no TP adjustment. Accordingly, the ground Nos. 2.1 to 2.4 raised by the assessee are allowed. Relief for MAT credit - HELD THAT:- AO restricted the MAT credit of assessee as per return of income despite the fact that assessee had sufficient brought forward MAT credit. This matter requires factual verification and hence, the same is restored to the file of the ld. AO to re-compute the tax liability of the assessee in accordance with law. Accordingly, the ground No. 3.4 raised by the assessee is allowed for statistical purposes.
|