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The Dy. Commissioner of Income Tax Versus M/s. Nomura Services India Pvt. Ltd.

TP addition - Dispute Resolution Panel deleting the addition of TP regarding super normal profit of one comparable company having variation in PLI ranging from (-) 13.55% to 113.49% and in TNNM - whether AO erred in filing an appeal against the directions of DRP passed under section 144C(5)? - Held that:- There is no dispute that the objections against the draft order of the Assessing Officer were filed by the assessee on 23.12.2010 which were rejected by the DRP in-liminie on a technical ground .....

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directions passed by the DRP on the objections filed by the assessee are binding on the Assessing Officer. The order of this Tribunal restoring the matter to the record of the DRP for deciding the objections filed by the assessee on merits would not change the factum of filing the objections by the assessee on 23.12.2010 and therefore the direction of the DRP dated 11.03.2014 are in respect of the objections dated 23.12.2010 can’t be challenged by the Assessing Officer. The appeal filed by the .....

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e and cross objection by the assessee are directed against the assessment order dated 28.03.2014 passed under section 143(3) read with section 144C and 254 of the Income Tax Act in pursuant to the order of this Tribunal dated 16.11.2012 and consequential directions of the DRP dated 11.03.2014 passed under section 144C(5) of the Income Tax Act for the assessment year 2007-08. The Revenue has raised the following grounds in its appeal: 1. On the facts and circumstances of the case and in law, the .....

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same line of services i.e. ITes the said comparable ought not to be excluded in view of ration laid down by Special Bench, ITAT, Mumbai in case of MAERSK Global Centre (I) Pvt. Ltd. 3. The appellant prays that the order of CT(A) on the above ground be set aside and that of the assessing officer be restored. 4. The appellant craves leave to amend or alter any of the grounds or add a new ground which may be necessary. 2. In the cross objections the assessee has raised the following grounds: Ground .....

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actually filed by the Assessee on 23 December 2010. 2. Without prejudice to contentions in the aforesaid ground of objection, the learned AO/TPO erred in filing an appeal for acceptance of a comparable, namely Mold-tek Technologies Limited, which is functionally different from the Assessee and has been deleted by the learned DRP. 3. Without prejudice to the aforesaid grounds of objection, the learned AO/TPO erred in: i. not granting the working capital adjustment as determined by the Assessee a .....

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ancials were being used iv. holding that nine companies are not a reasonable under of comparables. v. providing the Assessee an additional set of 21 comparable companies identified through a separate process, without rejecting the search undertaken by the Assessee vi. identifying comparable companies based on the data available in the public domain at the time of conducting the assessment i.e. using non-contemporaneous data for calculating arm's length price of the international transaction .....

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nability of the appeal filed by the Revenue which goes to the root of the matter, therefore, we first take up to dispose of the cross objection of the assessee. 4. The brief facts leading to the controversy as emerged from the record are that a draft order was passed by the Assessing Officer under section 144C read with section 143(3) against which the assessee filed the objections on 23.12.2010 in form No.35A which were rejected by the DRP vide its order dated 04.07.2011 on the ground that the .....

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d by the Ld. CIT(A). In the appeal filed against the assessment order pursuant to the order of DRP rejecting the objections, the Tribunal vide its order dated 16.11.12 held that the DRP has committed the mistake in rejecting the objections of the assessee on the ground that the form No.35A was not signed by the Managing Director of the assessee. Accordingly, the Tribunal restored the matter to the file of the DRP for consideration of objections filed by the assessee afresh. Since the matter was .....

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ely Mold-tek Technologies Ltd. was directed to be excluded from the list of comparables selected by the TPO. 6. The Revenue has filed the present appeal challenging the exclusion of the Mold-tek Technologies Ltd. from the list of comparables. Since the objections were filed by the assessee on 23.12.2010 which is prior to 01.07.2012 therefore the assessee has raised the objection regarding maintainability of the appeal of the Revenue. 7. We have heard the Ld. A.R. as well as Ld. D.R. and consider .....

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23.12.10 and therefore as per the provisions of section 253 the Revenue has no right to file the appeal against the directions of the DRP and consequently the appeal filed by the Revenue is not maintainable. 8. On the other hand, the Ld. D.R. has submitted that once the matter was restored by the Tribunal to the record of the DRP with the direction to consider the objections filed by the assessee afresh therefore, the objection so filed by the assessee would be treated as filed subsequent to th .....

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record of the DRP for deciding the objections on merits. Therefore, it is not a case of filing of fresh objection before the DRP but the matter was restored by the Tribunal to the record of the DRP for consideration of the objections filed by the assessee on 23.12.2010 on merits. 10. Thus, we do not find any substance in the contention of the Ld. D.R. that the objections of the assessee will be treated as filed afresh after the order of the Tribunal. The DRP was created by the Finance Act, 2009 .....

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ssessing Officer to appeal to this Tribunal against such orders passed in pursuant to the directions of DRP. Subsequently, section 253 of the Act has been amended by Finance Act, 2012 whereby sub section 2A has been inserted which reads as under: (2A) The [Principal Commissioner or] Commissioner may, if he objects to any direction issued by the Dispute Resolution Panel under sub-section (5) of section 144C in respect of any objection filed on or after the 1st day of July, 2012, by the assessee u .....

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to the directions of DRP on the objections filed by the assessee on or after 01.07.2012. There is no ambiguity in the provisions of section 253 that prior to insertion of sub section 2A, the Assessing Officer was not permitted to file an appeal against the directions of DRP. As it is manifest from the record as well as the facts of the case that the objections in the case of the assessee were filed before the DRP on 24.12.2010, therefore the Assessing Officer is not permitted to file the appeal .....

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