TMI Blog2011 (11) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... ication filed as above, the assessee has sought stay of outstanding demand of Rs.8,32,20,253. The assessee company is a wholly owned subsidiary company of Evalueserve Ltd., Bermuda and is registered under the Software Technology Park Scheme of Government of India. It is engaged in the research activities and provides information technology enabled services primarily to its associate enterprises. During the year under consideration it had entered into international transactions with Evalueserve Ltd., Bermuda, which comprised of provision of IT enabled back office services and reimbursement of travelling expenses. While computing the arm's length price, the assessee selected transactional net margin method (TNMM) and in applying such method it used the profit level indicator of net operating profit/operating cost. It also selected external comparables using a scientific screening process involving various quantitative and qualitative filters to arrive at independent companies with a comparable functional profile and on this basis it compared the margins earned by it with that of comparables and concluded that its margin is 11.18% vis-a-vis 8.70% of the comparables. To better understa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment is based on cogent reasoning, use of current year data has been found more appropriate and fresh search has been rejected as there were no valid reasons. We also do not find any fault with the working of 10A deduction. As regards proposed levy of interest and initiation of penalty proceedings u/s 271(1)(c) we find it premature to issue any direction. Hence, the DRP does not find adequate reasons to interfere with the order of TPO/A.O." 5. The Stay Application filed by the assessee was earlier fixed for hearing on 21st October, 2011 when it was pointed out by ld. AR that order passed by the DRP is a non-speaking order and has to be restored back to the DRP in view of the decision of Hon'ble Delhi High Court in the case of Vodafone Essar Ltd. v. Dispute Resolution Panel-II. He pleaded that the appeal of the assessee is fixed for hearing on 3rd November, 2011, therefore, the assessee should be granted stay and the matter should be restored back to the file of DRP and if the matter is restored back to the file of DRP, then, the stay application filed by the assessee will become infructuous as there will be no outstanding demand. Considering this submission of the Ld. AR, the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d which is prejudicial to the interest of such assessee. Under sub-section (2) of Section 144, the assessee within 30 days of the receipt of such draft order can accept the variation made by the Assessing Officer or he can file objections either to Dispute Resolution Panel or to the Assessing Officer. Since the assessee had filed his objections with DRP, then, under sub-section (5) the DRP, upon receipt of objection is under obligation to issue directions as it thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment and under sub-section (6) such directions which are put up under sub-section (5) would be further considering the following documents: (a) draft order; (b) the objection filed by the assessee; (c) the evidence furnished by the assessee; (d) report, if any, of the Assessing Officer, valuation officer, or TPO or any other authority; (e) records relating to the draft order; (f) evidence collected by, or caused to be colleted by, it; and (g) result of any inquiry made by, or caused to be made by, it. Under sub-section (7), DRP is also authorized before issuing of direction under sub-section (5) to make such further inquiry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 2nd December, 2010. The assessee had filed a writ of certiorari seeking the quashing the order of DRP and the revenue contended before the Hon'ble High Court that the order in question deserve to be quashed and the matter was remanded for fresh adjudication. The said order of the Hon'ble Delhi High Court is reproduced below:- "JUDGMENT Heard Mr. Syali, ld. Sr. Counsel for the petitioner and Mr. Sanjeev Sabharwal, ld. Standing Counsel for the revenue. By this writ petition, the petitioner has prayed for issue of a writ of certiorari for quashment of the order dated 30th September, 2010 passed by the dispute resolution panel-II, the first respondent herein. What could have been a matter of debate was put to rest by Mr. Sanjeev Sabharwal, ld. Counsel for the revenue by stating that the order passed on 30th September, 2010, contained in Annexure-P1, deserves to be quashed and the matter be remanded to the said authority for fresh adjudication. In view of the aforesaid fair concession, the order dated 30th September, 2010 passed by the respondent No. 1 is quashed and the matter is remanded to the said respondent to adjudicate afresh. Be it noted, when a quasi-judici ..... X X X X Extracts X X X X X X X X Extracts X X X X
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