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2021 (9) TMI 1139 - AT - Income TaxRectification u/s 254 - determination of ALP in respect of international transaction of rendering software development services by the assessee to its wholly owned holding company which was Associated Enterprise (AE) in terms of section 92 - HELD THAT:- We find that the DRP in rejecting the plea of the assessee has placed reliance on the decision of M/s. Telcordia Technologies India Pvt. Ltd.[2012 (6) TMI 388 - ITAT MUMBAI] and Thyssen Krupp Industries India Pvt. Ltd.I. [2013 (11) TMI 930 - ITAT MUMBAI]. Both these decisions have been considered in the Bengaluru Bench of the Tribunal rendered in the case of Maxim India Integrated Circuit Design Pvt. Ltd.[2020 (11) TMI 563 - ITAT BANGALORE]. Tribunal, after noticing the fact that in the decision cited in the order of the DRP, the facts were different and would result in the same effect if the claim of the assessee is accepted. Besides the above, the Karnataka High Court has also taken a view in the case of Business Process Outsourcing India Pvt. Ltd., [2018 (7) TMI 380 - KARNATAKA HIGH COURT] that provision for bad and doubtful debts should be taken as operating expenses while computing profit level indicator of the comparable companies. In the light of the aforesaid decisions which have been cited at the time of hearing of the appeal, we are of the view that the claim of the assessee deserves to be accepted. Accordingly, ground No.4(h) raised by the assessee has to be allowed and is hereby allowed. Consequent to the aforesaid conclusion, portion of para 11 of the order of the Tribunal dated 24.06.2021 given in bold letters in the earlier part of this order will stand substituted by the observations made in Paragraph 6 to 10 of this order as paragraph 11.1 to 11.5 and the remaining part of paragraph 11 will stand substituted as paragraph 11.6. Miscellaneous petition is allowed to the extent indicated above.
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