Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Forum Articles Highlights TMI Notes SMS News What's New Calendar Imp. Links Database More...
Extracts
Home List
← Previous Next →

The Deputy Commissioner of Income Tax, Circle-17 (2) Hyderabad Versus M/s. Zavata India Pvt. Ltd., Hyderabad

Transfer pricing adjustment - section of comparable - Held that:- As far as Accentia Technologies Ltd., is concerned, the DRP did not direct to exclude the comparable but directed the AO to verify whether there is any extraordinary event which had an effect on financials. Since it is AO who on verification excluded the comparable, we do not see any reason to interfere with the direction of the DRP. - Decided against revenue.

As far as Eclerx Services Ltd., is concerned, DRP has given .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r as TCS e-Serve International Ltd., also. There is contradiction in the findings of the DRP in excluding two companies while rejecting assessee's objections in TCS e-Serve International Ltd. DRP also did not give any finding whether there is any influence on the margins of the comparables as there is no higher turnover filter adopted by the AO while selecting the comparables. As we see from the list of final comparables even a company with ₹ 1.74 Crores was selected as comparable company .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of revenue for statistical purposes.

Excluding telecommunication charges from the total turnover while excluding the same from the export turnover - Held that:- With reference to ground of amount of communication charges excluded, AO considered an amount of ₹ 51,89,321/- i.e., total communication charges spent in India also whereas assessee objected before the DRP that the data link charges were only ₹ 39,22,626/-, which required to be reduced from both export turnover as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

same is rejected.- Decided against revenue. - I.T.A. No. 473/HYD/2015 - Dated:- 29-7-2015 - Shri B. Ramakotaiah and Shri Saktijit Dey, JJ. For the Petitioner : Shri Mohan Singhania, CIT-DR For the Respondent : Shri Ravi Bhardwaj, AR ORDER PER B. RAMAKOTAIAH, A.M. : This is an appeal by Revenue against the directions of Dispute Resolution Panel [DRP], Hyderabad dated 24-12-2014. Assessing Officer (AO) has raised the following grounds: "2. Whether on the facts and in the circumstances of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sfer pricing study to comparison between replicas of companies? 4. Whether on the fact and circumstances of the case, the Hon'ble DRP is justified in deleting comparable M/s Accentia Technologies Ltd for extraordinary even on the grounds of extraordinary events like mergers, acquisitions ignoring the fact that turnover is not the criteria in IT industry and it is the quality of services that matter? 5. Whether on the facts and circumstances of the case, the Hon'ble DRP is correct in law .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

communication charges of ₹ 51,89,321/-". 2. Briefly stated, assessee-company is engaged in the business of providing healthcare administrative back office services to its Associated Enterprise [AE] and works on cost + 15% basis. Assessee-company filed return of income declaring total income of ₹ 3,38,503/-. As assessee's transactions are with AE, the matter was referred to Transfer Pricing Officer [TPO], who after rejecting assessee's transfer pricing study, selected so .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y upper turnover filter and has not gone into verticals/horizontals and high end or low end distinction of the comparable companies. The Panel is of the opinion that M/s. Infosys BPO and TCS E Serve Ltd. should not be included as comparable in view of the advantageous brand value along with high turnover of ₹ 1000 crores and above. Similarly, M/s. Accentia Technologies Ltd., should be excluded from extraordinary event, after verification of the fact and extraordinary event and infact on fi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

parable by holding that not only the said company is functionally different being engaged in providing KPO services but it has also shown extraordinary high profits. Following the aforesaid decision of co-ordinate bench of Tribunal in case of Capital IQ Information Systems, we hold that this company cannot be treated as comparable". However, the objections of the assessee for exclusion of TCS E serve International Ltd. are rejected as the company has passed all the filters and it is true co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ver does not result in higher profits. There is no co-relation between earning of profits and the turnover in the BPO business. It was further submitted that DRP while rejecting Infosys BPO and TCS e-Serve Ltd., however, rejected the objections of assessee with reference to TCS e-Serve International Ltd, which is also similarly placed. As far as TPO is concerned, all the three companies are selected after due analysis and referred to the relevant findings of the TPO in this regard. 4. Coming to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee's business is also in the nature of KPO services and not BPO services. Accordingly, it was submitted that DRP wrongly excluded the above four companies. It was submitted that the order of TPO may be restored. 5. Ld. Counsel, however, in reply submitted that Infosys BPO and TCS e-Serve Ltd., have more than ₹ 1,000 Crores business as observed by the DRP, whereas assessee's turnover was only ₹ 27 Crores. Even though, TPO did not keep any higher turnover filter, it was .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

erify whether there is any extraordinary event which had an effect on financials. AO after due verification only excluded the company. He submitted that DRP's direction to the AO was to verify but it did not exclude directly in their order. As far as Eclerx Services Ltd. Is concerned, the DRP has rightly relied on assessee's own case for 2007- 08 and excluded the company, as it was providing KPO services whereas assessee is providing simple BPO services, being back office services. He al .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

any reason to interfere with the direction of the DRP. As far as Eclerx Services Ltd., is concerned, DRP has given a clear finding based on co-ordinate bench decision that the said company was providing KPO services which are not comparable to assessee's BPO services. Since the decision of the DRP is consistent with the decision of the co-ordinate bench, we do not see any reason to interfere with the same. Next to be considered is whether DRP is correct in excluding the Infosys BPO and TCS e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ver of ₹ 1,000 Crores and above. Assessee has objected on the same twin conditions as far as TCS e-Serve International Ltd., also. There is contradiction in the findings of the DRP in excluding two companies while rejecting assessee's objections in TCS e-Serve International Ltd. DRP also did not give any finding whether there is any influence on the margins of the comparables as there is no higher turnover filter adopted by the AO while selecting the comparables. As we see from the lis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

urpose of giving detailed order on the contentions raised by Revenue in ground No. 2. This ground is considered allowed for statistical purposes. As stated above, ground No. 3 and 4 are rejected. 7. Coming to the issue raised in ground No. 5 & 6, the issue of excluding telecommunication charges from the total turnover while excluding the same from the export turnover is consistent with the decision of the co-ordinate benches of ITAT as well as the order of the High Courts. The Special Bench .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

  ↓     Latest Happening     ↓  

Forum: Input tax credit

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

Forum: GST on Notional rent

Forum: GST ON SALES PROMOTION

Forum: 3B mistake

Forum: Excise duty credit on finished stock at additional place of business.

Forum: PROCEDURE FOR SHIFTED OF FINISHED GOODS FROM AP KARNATAKA TO UP

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 – comments and suggestions-reg.

Highlight: Genuineness of labour wages expenses, embroidery charges, fabrication expenses etc. - getting work done through small workmen who do not have any permanent place of residence - disallowance of ad hoc expenditure deleted.

Highlight: Project import - Since the goods were never used for the purpose for which it was imported, the actual user condition has been violated - Redemption fine and penalty imposed.

Highlight: Penalty u/s 112 (a) - CHA - Lack of due diligence and failure to take more precautions can not, by itself, bring in penal consequences

Highlight: Import of services - GST - The fact that those services were received outside India will not change the fact that the services have been paid for by the beneficiary appellant, who is located in India. - Demand confirmed.

Notification: SEZ for IT/ITES at Madhurwada Village, Visakhapatnam District in the State of Andhra Pradesh - denotified.

Highlight: Merely because payment is received in Indian rupee, it cannot be said that payment against export has not been received in convertible foreign exchange.

Highlight: Merely vehicle numbers was not mentioned on the invoices cannot be the reason to deny Cenvat Credit

Highlight: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017 - Circular

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

News: Auction for Sale (Re-issue) of Government Stocks

Article: TDS APPLICABILITY ON GOVERNMENT CONTRACTS UNDER GST (Under Section 51 of the CGST Act, 2017)

News: Manmohan takes potshots at note ban, 'hasty' rollout of GST

News: GST on petrol, diesel requires wider discussion: Nitish

Article: WHEN CAN ONE TAKE ITC FOR RCM CASES?

Notification: TDS liability under Section 51 of CGST, 2017 come into force w.e.f. 18-9-2017 - Persons liable to deduct TDS from payment made or credited to the supplier of taxable goods or services specified

Notification: Central Goods and Services Tax (Seventh Amendment) Rules, 2017

Notification: Seeks to extend the last date for filing the return in FORM GSTR-3B for the months of August to December, 2017

Circular: Filing of Special Leave Petition against Orders of Hon'ble High Courts staying Collection of Tax under GST- reg.

Highlight: Exemption u/s 54F - LTCCG - once entire net consideration is invested, the absence of completion certificate cannot be a ground to deny the benefit of deduction.

Highlight: Deduction u/s 10B - initial AY - Mere authorization to enable the Assessee to import material or export produce in the earlier date would not ipso facto tantamount to commencement of substantial activity of ‘manufacture’/’production’.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version