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Showing 361 to 380 of 2184 Records
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2018 (5) TMI 1827
Revision u/s 263 - Held that:- The view of CIT(A) with regard to specific direction for non-assumption of jurisdiction is incorrect when there is contradictory directions on the same issue. As per the decided case laws the direction is in favour of the assessee has to be considered and benefit of doubt should be allowed to the assessee.
CIT was not intended to give any specific direction and the direction was to remit the matter back to the file of the A.O. to re-do the assessment afresh de-novo. Accordingly, we hold that the CIT(A) is vested with the jurisdiction and duty bound to decide the appeal of the assessee on merits. Hence, we set aside the order of the CIT(A) and remit the matter back to the file of the Ld. CIT(A) to decide the appeal of the assessee afresh on merits. The assessee is free to take up all the grounds relating to merits before the CIT(A). Appeal filed by the assessee is allowed for statistical purposes.
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2018 (5) TMI 1826
Service of notice - Held that:- The office report indicates that the Respondent No.2 has already filed the counter affidavit. Service of notice is complete on the respondent No.1 but no one has entered appearance on his behalf. Viewed, in that context, the matter shall be processed for listing before the Hon'ble Court, under the rules.
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2018 (5) TMI 1825
Validity of Section 4(3) of the Uttar Pradesh Ministers (Salaries, Allowances and Miscellaneous Provisions) Act, 1981 - allotment of government accommodation to former Chief Minister - conflict with the provisions of Section 4 of the 1981 Act - principles of equality - State of Uttar Pradesh has sought to defeat the writ petition by contending that the same being Under Article 32 of the Constitution of India a direct infringement of the fundamental rights of the Petitioner must be established which is nowhere apparent even on a close scrutiny - maintainability of petition.
Whether retention of official accommodation by the functionaries mentioned in Section 4(3) of the 1981 Act after they had demitted office violate the equality Clause guaranteed by Article 14 of the Constitution of India?
Held that:- While it is true that Article 32 of the Constitution is to be invoked for enforcement of the fundamental rights of a citizen or a non citizen, as may be, and there must be a violation or infringement thereof we have moved away from the theory of infringement of the fundamental rights of an individual citizen or non citizen to one of infringement of rights of a class. In fact, the above transformation is the foundation of what had developed as an independent and innovative stream of jurisprudence called "Public Interest Litigation" or class action - Along with the aforesaid shift in the judicial thinking there has been an equally important shift from the classical test (classification test) for the purpose of enquiry with regard to infringement of the equality Clause Under Article 14 of the Constitution of India to, what may be termed, a more dynamic test of arbitrariness.
The allocation of government bungalows to constitutional functionaries enumerated in Section 4(3) of the 1981 Act after such functionaries demit public office(s) would be clearly subject to judicial review on the touchstone of Article 14 of the Constitution of India. This is particularly so as such bungalows constitute public property which by itself is scarce and meant for use of current holders of public offices. The above is manifested by the institution of Section 4-A in the 1981 Act by the Amendment Act of 1997 (Act 8 of 1997). The questions relating to allocation of such property, therefore, undoubtedly, are questions of public character and, therefore, the same would be amenable for being adjudicated on the touchstone of reasonable classification as well as arbitrariness.
The present Petitioner had earlier approached this Court Under Article 32 of the Constitution challenging the validity of the 1997 Rules. Not only the said writ petition was entertained but the 1997 Rules were, in fact, struck down. In doing so, this Court had, inter alia, considered the validity of the 1997 Rules in the light of Article 14 of the Constitution of India. The insertion of Section 4(3) by the 2016 Amendment as a substantive provision of the statute when the 1997 Rules to the same effect were declared invalid by the Court would require the curing of the invalidity found by this Court in the matter of allotment of government accommodation to former Chief Ministers.
Natural resources, public lands and the public goods like government bungalows/official residence are public property that belongs to the people of the country. The 'Doctrine of Equality' which emerges from the concepts of justice, fairness must guide the State in the distribution/allocation of the same. The Chief Minister, once he/she demits the office, is at par with the common citizen, though by virtue of the office held, he/she may be entitled to security and other protocols. But allotment of government bungalow, to be occupied during his/her lifetime, would not be guided by the constitutional principle of equality.
Not only that the legislation i.e. Section 4(3) of the 1981 Act recognizing former holders of public office as a special class of citizens, viewed in the aforesaid context, would appear to be arbitrary and discriminatory thereby violating the equality clause. It is a legislative exercise based on irrelevant and legally unacceptable considerations, unsupported by any constitutional sanctity.
Thus, Section 4(3) of the 1981 Act cannot pass the test of Article 14 of the Constitution of India and is, therefore, liable to be struck down - Section 4(3) of the Uttar Pradesh Ministers (Salaries, Allowances and Miscellaneous Provisions) Act, 1981 is ultra vires the Constitution of India as it transgresses the equality Clause Under Article 14 - petition allowed.
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2018 (5) TMI 1824
Addition on account of income booked in the Profit & Loss Account in excess of cash available - Held that:- Once the assessee has surrendered an income of ₹ 20,00,000/- due to the incriminating material found during the survey then the application of the same income if less than the amount surrendered by the assessee would not lead to the situation that assessee had surrendered less amount than it ought to have surrendered. AO has made an addition on the ground that the assessee has spent only ₹ 9,21,903/- and, therefore, the balance amount is liable to be taxed as surplus cash. CIT (A) has deleted this addition by considering the fact that there is no basis of such addition made by the AO. We do concur with the finding of the CIT (A) that the surplus cash, if any, is computed by the AO to the extent of the surrendered amount cannot be considered as an additional income liable to tax.
Addition on account of understatement of scrap sale - scrap sale as found in the loose papers - Held that:- Date of scrap sale as found in the loose papers is also a relevant factor to ascertain the said transaction belongs to the lot of the scrap sale and rate prevailing during the said period. Therefore, the rate of a particular item of scrap sale as found in the loose papers and the rate as recorded in the bills and books of accounts can be verified and then only to the extent of the same rate and same item of scrap sale will be considered for making the addition on account of under billing. Hence, in view of the facts and circumstances of the case, we set aside this issue to the record of the AO for proper verification of the facts and identify the particular item of scrap sale found recorded in the loose papers impounded during the course of survey and then apply the same rate in respect of the scrap sale of the same item which is shown by the assessee sold at the rate as mentioned in the corresponding bill.
Trading addition - AO rejected the books of account u /s 145(3)- assessee surrendered an income which was included by the AO while computing the GP rate to be applied for the year under consideration - Held that:- There is no quarrel on the point that after rejection of books of account, the only course of action left with the AO is to estimate the income of the assessee by applying a proper and reasonable basis. The GP rate of earlier year is no doubt a reasonable and proper basis for estimation of income. However, the AO instead of applying the undisputed and noncontroversial GP rate of the earlier year, has considered only the GP rate which was computed after including the surrendered income of the assessee of the preceding year. Therefore, we find that the basis applied by the AO is not proper and appropriate and, therefore, we do not find any error or illegality in the order of ld. CIT (A) in deleting the said addition.
Addition made on account of freight receipts - AO on the analyses of loose papers found that the assessee has received unaccounted cash @ 22.25% which is the difference between the billed amount and actual freight mutually determined with the transporters - Held that:- when the assessee has admitted the over-inflated claim of freight charges as found in the loose papers for the months of April to August in respect of the payment made to one transporter, namely, Haryana Rajasthan Roadlines, the said rate of inflated expenses on account of freight charges can be applied in respect of the freight charges claimed by the assessee paid to Haryana Rajasthan Roadlines. Therefore, to the extent of freight paid to the said transporter, the inflated rate as applied by the assessee is justified but not in respect of the other transporter when there is no material or other record to show such an arrangement between the assessee and other transporter. Accordingly, we set aside this issue to the record of the AO to verify the other freight charges and only to the extent of freight charges to Haryana Rajasthan Roadlines this difference rate can be applied.
Disallowance of interest under section 36(1)(iii) - Held that:- Disallowance made by the AO on account of interest expenses due to loan given to M/s. International Engineering & Manufacturing Services Pvt. Ltd., a sister concern of the assessee, without charging interest was considered by this Tribunal in assessee’s own case for the assessment year 2003-04. The revenue has not disputed the fact that there is no fresh loan given by the assessee during the year under consideration to the sister concern. Therefore, when the disallowance made by the AO on this account was already decided in favour of the assessee by the ld. CIT (A) and thereafter by this Tribunal, then following the earlier order of the Tribunal, we do not find any error or illegality in the impugned order of the ld. CIT (A) qua this issue.
Disallowance on account of travelling expenses - expenses incurred are personal in nature - Held that:- AO has not disputed that the expenditure was incurred on the travelling of the Director and, therefore, in the absence of any fact or material to show that the visits undertaken by the Director of the assessee was personal and not for the purpose of business of the assessee, such an adhoc disallowance of ₹ 50,000/- is not justified.
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2018 (5) TMI 1823
Levy of tax on state police - security agency service - certain charges collected for providing police guard for currency chest of various bank branches, financial institutions and also other Central and State organizations and public enterprises - Held that:- An identical issue has come-up for consideration before this Tribunal in the case of THE DEPUTY COMMISSIONER OF POLICE JODHPUR, SUPERINTENDENT OF POLICE VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, JAIPUR [2016 (12) TMI 289 - CESTAT NEW DELHI], where it was held that the police department, which is an agency of the State Govt., cannot be considered to be a person engaged in the business of running security services. Consequently, the activity undertaken by the police is not covered by the definition of Security Agency under Section 64 (94)of the Act.
Appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1822
TPA - comparable selection - rejection of Calchem Industries (India) Ltd. from the list of comparables on the ground that the assessee has only filed Balance Sheet and P & L account and has not furnished Annual Report for the Financial Year 2009-10 - Held that:- Since information furnished by assessee was incomplete to carry out analysis, the said company was rejected. The assessee has filed Director’s report along with Balance Sheet, P & L account and notes to account of Calchem Industries (India) Ltd for Financial Year 2009-10 as additional evidence. Accordingly, we deem it appropriate to remit the issue back to the file of TPO/Assessing Officer for considering additional evidences filed by assessee and deciding the issue of inclusion/exclusion of the abovesaid company from the list of comparables. Thus, ground raised in appeal by assessee is allowed for statistical purposes.
Writing of of Bad Debts’ u/s. 36(1)(vii) - Unrecovered amount of sales proceeds from total sales - Ballarpur Industries Limited though used the material but did not make payment on account of inferior quality of WGCC thus, the assessee decided to ‘write off’ the said amount - Held that:- It is a settled law that entitlement of any deduction cannot depend on the treatment accorded to such entries by assessee. The existence or the absence of entries in the books of account is not determinative of such claim. The Authorities below have taken hyper-technical and pedantic view in rejecting the assessee’s claim of ‘writing off’ of the amount, not received from Ballarpur Industries Limited against supply of WGCC, though the assessee has ‘written off’ the amount by reducing sales price. The manner in which assessee has given accounting treatment to the irrecoverable sales may not be the typical desired method of book entry but it will have the same effect on financial results as is writing off of ‘Bad Debts’. Accordingly, we allow assessee’s claim to the extent of amount irrecoverable from Ballarpur Industries Ltd. against supply of WGCC.
Disallowance with respect to reduction in sales price is difference in stock - Held that:- The assessee is consistently raising bills for supply of WGCC on similar methodology and the Revenue has accepted the same in past without any objection. Taking into consideration entirety of facts, we are of considered view that this issue relating to reduction of sales on account of verification of stock needs revisit to Assessing Officer for de novo consideration. We hold and direct accordingly. The assessee shall furnish necessary details before the Assessing Officer viz. the manner of valuation, scope of work carried out by National Survey Engineers and other relevant details. The Assessing Officer after considering the same shall decide the issue afresh after allowing opportunity of hearing to the assessee, in accordance with law.
Incorrect computation of operating margin - TPO while computing operating margin has considered ‘write back of provision for doubtful debts’ as non-operating in nature - DRP rejected assessee’s submission by placing reliance on ‘Safe Harbour Rules’ - Held that:- It is an undisputed fact that ‘Safe Harbour Rules’ were introduced on 18.09.2013. Safe Harbour Rules does not apply retrospectively and hence, they would not have application on the assessment year under appeal. The Hon'ble Delhi High Court in the case of Pr. CIT Vs. M/s. Cashedge India Pvt. Ltd [2016 (5) TMI 1348 - DELHI HIGH COURT] has held that “Safe Harbour Rules’ do not apply to the assessment year 2010-11.
Whether ‘write back of provision of doubtful debts’ is operating in nature? - Held that:- The Co-ordinate Bench of Tribunal in the case of Haworth (India) (P) Ltd. Vs. DCIT (2017 (10) TMI 1385 - ITAT PUNE) has held that liabilities written back and bad debts recovered are part of operating income of the assessee. Thus, following the decision of Co-ordinate Bench, we hold that Authorities below have erred in coming to the conclusion that ‘write back of provision for doubtful debts’ is non-operating in nature.
Treating foreign exchange gain/loss as non-operating in nature - Held that:- As has been pointed earlier, ‘Safe Harbour Rules’ came into existence from September, 2013. They do not apply retrospectively and hence, have no application in the assessment year 2010-11. In the case of Approva System Pvt. Ltd Vs. CIT(A)-IT/TP (2015 (3) TMI 151 - ITAT PUNE), the Co-ordinate Bench of Tribunal has held that foreign exchange gain/loss is part of operating income.
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2018 (5) TMI 1821
Denial of deduction u/s.80P - interest earned on Fixed Deposits with Nationalized Banks - Held that:- As decided in ITO Vs. Swa Ashokrao Bankar Nagari Sah. Patsanstha Maryadit [2016 (7) TMI 1484 - ITAT PUNE] Society which is carrying on the business of banking activity and providing credit facility to its members is eligible for deduction u/s.80P(2)(a)(i).
The assessee is entitled to claim the deduction under section 80P(2)(a) on the interest income earned from investment in fixed deposits with Nationalized Banks. Accordingly, the said deduction is directed to be allowed by the Assessing Officer. - Decided in favour of assessee
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2018 (5) TMI 1820
Assessment u/s 153A - enhancement of income - assessments made pursuant to search operation - higher deduction u/s 80 IC - Held that:- In the present case the impugned seized paper does not belong to the Assessment Years involved in the impugned appeals.
Furthermore, with respect to the same paper it is also important to note that it is evident from that paper that Surya Vinayak Industries have over paid the assessee than what it should have allegedly paid for over invoicing. This evident facts also runs contrary to the other finding that Surya Vinayak industries is company of not having capacity to supply so much material in para no 145 of the order. If it is so then how it could have paid the assessee over and above what is required to be paid if the goods are over invoiced.it cannot be disputed that assessee has purchased the material. Now the issue is at what rate. If it Is the case of the revenue that assessee has purchased goods at ₹ 100 But has booked purchases at ₹ 150 and received ₹ 50 back from the supplier in cash, then revenue should have brought on record the near about comparable prices of those material with reasonable evidences. These facts could have been proved either by the availability of the material in the market or also by the production cost of the supplier. Revenue has not brought on record any such material. Most of the part of the order justifying the addition in absence of this merely remains allegations without evidences. Additions in such a manner cannot be sustained.
As none of the documents seized during the course of search are shown to us pertaining to the Assessment Year 2005-06 to 2009-10, we are of opinion that all the additions made by the ld Assessing Officer are not based on incriminating documents found during the course of search, hence they are not sustainable.
There is no incriminating material found during the course of search relevant to Assessment Year 2005-06 to AY 2009- 10, which are concluded Assessment Year, and could have been disturbed only on the basis of any incriminating material showing escapement of income found during the course of search relevant to that assessment year only. Hence, we do not have any other option but to allow ground No. 1 of the appeal of the assessee for the impugned assessment years. - Decided in favour of assessee.
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2018 (5) TMI 1819
Benefit of reduced penalty of 25% under the proviso to Section 78 - Non-payment of service tax - non-filing of returns - interest for delayed payment of service tax also not paid - Held that:- The benefit of reduced penalty is inbuilt under Section 78 ibid. Hence, the same cannot be denied to the appellant - appeal is therefore partly allowed by way of allowing the appellants to pay reduced penalty calculating at 25% of the penalty imposed under Section 78 ibid, provided they fulfil all the other conditionalities of that Section - appeal allowed in part.
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2018 (5) TMI 1818
Assessment u/s 153A - addition made in the absence of any incriminating material found during the course of search - Held that:- In the present case, since no incriminating material was found, therefore, the addition made by the AO u/s 153A of the Act was not justified. See COMMISSIONER OF INCOME TAX (CENTRAL) -III VERSUS KABUL CHAWLA [2015 (9) TMI 80 - DELHI HIGH COURT] as held since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. - Decided in favour of the Assessee
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2018 (5) TMI 1817
Sale of paintings claimed to be gifted by late father renowned painter late Shri MF Husain - correct head of income - business income or capital receipt - definition of ‘capital asset’ under section 2(14) - sufficient opportunities to produce the details - Held that:- We find that now assessee’s Counsel before us has clearly undertook to file the necessary details to prove that receipts from sale of paintings are on account of sale to the respective buyers. He undertook to file the confirmation from these buyers and the relevant evidences to prove that the sale proceeds are deposited in the bank account will be produced before the Assessing Officer. In such undertaking, we are of the view that the primary responsibility/onus is on assessee to file these details and in term of this undertaking we set aside this issue to the file of the Assessing Officer.
Income from house property - Fair rental value u/s 23(1)(a) - deemed let out premises under section 23(1)(a) – AO adopted Annual Letable value at ₹ 9,000 PM in respect of each of the two worli flats - Held that:- Hon’ble Bombay High Court in the case of CIT vs. Tip Top Typography [2014 (8) TMI 356 - BOMBAY HIGH COURT] wherein it is held that for computing letable value, Municipal rateable value can be adopted by the AO. In view of the above, we direct the AO to compute the deemed rent as per Municipal rateable value and assess the income accordingly. This issue of assessee’s appeal is set aside to the file of the AO.
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2018 (5) TMI 1816
TPA - Determination the ALP of the charge for giving a corporate guarantee - CUP method applicability - Held that:- Issuance of a corporate guarantee is a non-fund based transaction. The assessee in this case has obtained the quotes from RBS and as well as from Indusind Bank. The credit rating of the assessee and other financial data were considered by the banks, before giving a free quote to the assessee. Thus in our view the free quotes taken by the assessee for the very same transactions do constitute material for determination of ALP.
Though the assessee has quoted a decision in the case of Asian Paints [2011 (10) TMI 629 - ITAT, MUMBAI] in support of its contention that the CUP method should be used for determination of arm’s length price and that such exercise would result in determination of ALP at 0.20%, we do not apply the same, as factually they are variations in facts. The credit rating of an organisation etc. plays an important role in determination of the rate. Geographical location, local government regulations etc. are also to be considered.
In this case, corporate guarantee has been provided by the assessee to ABN AMRO Bank for AE BAMPL Mauritius and Strategic Food International Co. LLC, Dubai.
Royal Bank of Scotland has given a free quote of 0.25%. This quote constitutes the ALP of this International Transaction in question. The average adopted by the assessee as ALP is in our view not the right approach as averages do not always give logical results. As this quote is the basis on which this transaction has taken place, we are of the opinion that this should be taken as the ALP. Hence, we direct the TPO as well as the Assessing Officer to adopt 0.25% as the ALP. Appeal of the Assessee is allowed in part.
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2018 (5) TMI 1815
Charitable activities - Grant of registration to the respondent u/s 12-A - Held that:- The respondent is a society constituted by the Government for imparting training to various officers/officials involved in the criminal justice system with no profit motive at all and whatever funds are generated or received in aid are utilized for the aforesaid public purpose. It cannot be said that there is any commercial motive and the application for registration granted under Section 12-A of the Act cannot be said to be erroneous. No substantial questions of law.
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2018 (5) TMI 1814
Charitable activity - exemption u/s 11 - promoting technology or technology related activities - ITAT held that the assessee’s activities are charitable and that it was not engaging in any business or commercial activity - Held that:- Revenue felt that the assessee is engaged in non-charitable and business activities because of certain services it provided for consideration; these were video conferencing facilities, provision for conferencing in workshops etc. The ITAT relied upon the ruling of this Court in ‘GS1 India vs. Director General of Income Tax’ [2013 (10) TMI 19 - DELHI HIGH COURT] where it was held that the similar activities of promoting technology or technology related activities could not be considered commercial or business activities, per se. Having regard to the facts of this case, the Court is of the opinion that the ratio of GS1 India (supra) applies in this case as well. - decided against revenue
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2018 (5) TMI 1813
Maintainability of appeal - Held that:- The appellant-assessee is not interested to pursue the appeal - as per maxim, VIAILATIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT, law helps those who are vigilant and not those who go to sleep - appeal is dismissed for default with liberty to come again for recalling this order subject to satisfying the reasons for the default but within prescribed time.
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2018 (5) TMI 1812
Scope of deferred tax within the meaning of Section 61(2)(d)(iii) of the Haryana Value Added Tax Act, 2003 read with Rule 69 of Haryana Value Added Tax Rules, 2003 - whether input tax paid by the assessee can be counted towards payment of 50% of deferred tax upfront under Section 61(2)(d)(iii) of the Haryana Value Added Tax Act, 2003? - Held that:- In case the unit opts for payment of half of the deferred tax upfront alongwith the returns, the deferred tax would be calculated without deducting the amount of input tax paid on the goods used in the manufacture and the amount of input tax paid by it is to be counted towards payment of 50% of deferred tax upfront.
The substantial questions of law are answered accordingly and the appeal stands dismissed.
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2018 (5) TMI 1811
TPA - determination of arms length price(ALP) u/s 92C - commission chargeable by the assessee from its AE on international transaction entered into u/s 92B with its associated enterprises (AE) - Held that:- Corporate guarantee provided by the assessee brought certain benefits to its AE by way of credit facility and therefore, the same was required to be compensated by its AE. Our view is duly supported by the decision of this Tribunal rendered in Everest Kanto Cylinders Ltd. Vs. DCIT [2012 (11) TMI 1099 - ITAT MUMBAI] as affirmed by Hon’ble Bombay High Court [2015 (5) TMI 395 - BOMBAY HIGH COURT]wherein the rate of commission has been adopted @0.5%. Respectfully, following the same, we estimate the impugned additions @0.5% p.a.. The Ld. AO is directed to quantity the addition and re-compute the income of the assessee in terms of our above order - decided partly in favour of assessee
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2018 (5) TMI 1810
Registration u/s 12A and approval under section 80G denied - no charitable activities done by the assessee - Held that:- As decided in DIRECTOR OF INCOME TAX VERSUS FOUNDATION OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE [2012 (8) TMI 777 - DELHI HIGH COURT] as relying on SELF EMPLOYERS SERVICE SOCIETY VERSUS COMMISSIONER OF INCOME-TAX [2000 (9) TMI 47 - KERALA HIGH COURT] non commencement of charitable activity could not be a ground for rejection of application for registration u/s 12A. - decided in favour of assessee
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2018 (5) TMI 1809
Recovery of tax seeked by department - appeal against the orders of the third respondent is pending before the Income Tax Appellate Tribunal alongwith the stay petitions - Held that:- This writ petition is disposed of with a direction to the Income Tax Appellate Tribunal to consider the appeal filed by the petitioner, which is pending on his file alongwith the stay petitions and pass appropriate orders in accordance with law within a period of two weeks from the date of receipt of a copy of this order. Till such time, the recovery proceedings are put on hold.
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2018 (5) TMI 1808
TPA - addition made on account of adjustment to ALP survives - directions of the DRP results in reduction of the addition on account of adjustment to ALP as suggested by the TPO - Held that:- Companies functionally dissimilar with that of ITES segment of the Assessee need to be deselected from final list.
Working capital adjustment - Held that:- The working capital adjustment ought to be allowed on actuals upon taking into consideration the correct value of receivables and payables. We are of the view that it would be appropriate to direct the TPO/AO to examine the grievance of the Assessee in this regard and re work the working capital adjustment in accordance with law.
Foreign exchange fluctuation is operating in nature - the margin of the Assessee has to be computed upon including the gains from the said fluctuation - Held that:- In the light of Rule 10B(3) of the Rules and the business cycle in the relevant business, the comparability will not be materially affected if the foreign exchange gain is considered as reflected in the accounts of the comparable companies as available in public domain. Respectfully following the decision of the ITAT Bangalore in the case of SAP Labs (2010 (8) TMI 676 - ITAT, BANGALORE) we hold that the DRP was justified in directing the AO to consider the foreign exchange gain or loss as operating in nature. Therefore, in light of the above, this ground of the Revenue is liable to be dismissed
Regarding 1% risk adjustment, it is settled position that assesses that are captive service providers assume less risk compared to companies in an uncontrolled situation and therefore, an adjustment is to be provided to the margins of the comparables to mitigate the said difference. This Hon'ble Tribunal has consistently upheld the above approach and has directed the grant of risk adjustment to the margins of the comparables. In this regard, reference may be made to the decision of ITAT Bangalore Bench in the case of Bearing Point Business Consulting (PR) Ltd. v. DOlT (2014 (4) TMI 997 - ITAT BANGALORE), where this Hon'ble Tribunal has directed the grant of risk adjustment in the case of an assessee placed similarly to that of the Assessee herein. No grounds to interfere with the order of the DRP in this regard and dismiss the relevant ground of appeal of the Revenue.
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9911796707
