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2015 (4) TMI 803 - AT - Income TaxTransfer pricing adjustment - Determination of Arm's length price in international transactions - Adjustment in Software development services transaction - Selection / Rejection of comparables companies - Comparable collected from public domain u/s 133(6) - Risk adjustment - Depreciation on net working equipments - Interest u/s 234B & 234D - Penalty u/s 271(1)(c) - Held that:- The common ground for rejection of comparable companies are - Non-furnishing the information obtained under section 133(6) of the Act to the assessee has vitiated the selection of this company as a comparable - Functionally different from the assessee in the case on hand - to exclude this company from the list of comparables as it is engaged both in software development and product development, owns IPR’s, intangibles, etc. and cannot be held as comparable to a pure software service provider - it is predominantly engaged in a variety of functions like product designing services and not purely software development services. Accordingly companies selected/ rejected for comparables. Risk adjustment - We have heard both the learned Authorised Representative and the learned Departmental Representative in the matter and perused and carefully considered the material on record. While the submission of the assessee may be based on principles, we find that it has merely put forth its claim but has not filed any basis of the quantification of the risk adjustment either before the authorities below or before us. In this view of the matter, the assessee's claim for risk adjustment is rejected. Interest u/s 234B & 234D - The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter. This proposition has been upheld by the Hon'ble Apex Court in the case of Anjum H Ghaswala 252 ITR 1. In this view of the matter, we uphold the action of the Assessing Officer in charging the assessee the said interest. The Assessing Officer is, however, directed to recompute the interest chargeable under Sections 234B and 234D of the Act, if any, while giving effect to this order. Penalty proceedings under Section 271(1)(c) of the Act - This ground is not maintainable in this appeal as no penalty has been levied on the assessee under Section 271(1)(c) of the Act for any cause of grievance to arise in the assessee's case and for us to adjudicate upon in the impugned order. This ground being not maintainable is dismissed accordingly. Depreciation on net working equipments -Following the above decision of the co-ordinate bench of this Tribunal in the assessee's own case for Assessment Year 2007-08, we remand the issue back to the file of the Assessing Officer for fresh consideration, after affording the assessee adequate opportunity of being heard and to file details / submissions required. It is ordered accordingly. Consequently, the Grounds at S.Nos.3.1 to 3.3 are treated as allowed for statistical purposes only. Following the above decision of the co-ordinate bench of this Tribunal in the assessee's own case for Assessment Year 2007-08, we admit the additional ground raised by the assessee for adjudication and remand the matter to the file of the Assessing Officer for his examination and consideration of the issue in the light of the directions issued by the Tribunal at paras 49 and 50 of its order for Assessment Year 2007-08 in the assessee's own case. - Decided partly in favour of assessee.
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