Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s. United Online Software Development (India) Pvt. Ltd Versus Income Tax Officer Ward 3 (2) , Hyderabad and Vica-Versa

Transfer pricing adjustment - selection of comparable - Held that:- The issue relating to comparable nature of nine out of above eleven companies (companies in original grounds as well as additional grounds taken together), viz. other than Flextronics Software Systems Ltd. (Seg.) and Helios & Matheson Information Tech. Ltd. has come up for consideration before this Tribunal for assessment year 2007-08 itself and in the case of Sumtotal Systems India P. Ltd., Hyderabad [2014 (8) TMI 870 - ITAT HY .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

AT HYDERABAD] wherein the Tribunal vide its order has rejected the contentions of Assessee for inclusion of all the six companies under consideration before it [Aztec Soft Ltd., Birla Technologies Ltd., Indium software India Ltd., Larsen & Toubro Infotech., PSI Data systems Ltd. (SEG) and VMF Softech Ltd.]

Computation of deduction under S.10A - reducing the communication charges from the export turnover considering it as attributable to the delivery of computer software outside India, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ak Soft Limited [2009 (3) TMI 243 - ITAT MADRAS-D] we allow this ground of Assessee

Penalty under S.271(1)(c) - difference in the value of Arm’s Length Price - CIT(A) deleted penalty levy - Held that:- The determination of the Arm’s Length Price is a result of an estimation on the basis of different variables by both Assessee and the Assessing Officer, and the difference in the value of Arm’s Length Price arrived at by the Assessing Officer was due to its re-working by using different .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

), the CIT(A) cancelled the impugned penalty. - Decided in favour of assessee. - ITA No.1658/Hyd/11, ITA No.1239/Hyd/13, - Dated:- 24-9-2015 - SMT. P.MADHAVI DEVI, JUDCIIAL MEMBER AND SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER For The Assessee : Shri Ravi Bharadwaj For The Department : Shri S.Moharana DR ORDER Per B.Ramakotaiah, Accountant Member: There are two appeals -one filed by Assessee in quantum proceedings against the order of AO as approved by DRP and the other filed by the Revenue in the pe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

year 2007-08. 3. Assessee raised fourteen grounds in this appeal, out of which grounds No.1 to 9 relate to Transfer Pricing Adjustment. In the course of arguments, the learned counsel has not pressed the grounds No.1 to 6, 9 10 and 11, which relate to rejection of transfer pricing documentation maintained by Assessee; rejection of use of contemporaneous data and undertaking fresh search of comparables; rejection of use of multiple year data; information obtained under S.133(6); incentive to shi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

his issue in further proceedings that ensue in pursuance of this order, if warranted. So also, ground No.13 relating to levy of interest under S.234B and 234C; and ground No.14 relating to initiation of penalty proceeding under S.271(1)(c) are not pressed. These grounds are accordingly rejected. Assessee raised additional ground for exclusion of some more comparable companies. These are also dealt with at appropriately. 4. We may now take up for consideration the only other grounds that survive .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e DRP. 6. Briefly stated, assessee United Online Software Development (India) Private Limited, is a company incorporated in November, 1999 as a wholly owned subsidiary of Juno US. Assessee is engaged in the business of provision of following services- (a) Software development services in the area of mail plant, Web-mail platform and internal related software; (b) Operation support services: - Web-mail customer Responses ECRM - Remote Production monitoring - Online and offline advertisements Asse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

operating profit to cost ratio was 10.81%. During the year under consideration, Assessee has entered into the following international transactions- (a) Provision of software development services Rs.18,86,04,325 (b) Purchase of fixed assets ₹ 58,51,045 Assessee has purchased fixed assets worth ₹ 58,51,045 from Juno US and were used for its software development services and the same have been included in the Profit & Loss Account for mark up. As the method followed by the Transfer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e companies selected by Assessee from the scope of his TP study, and selected on the other hand, certain other companies as comparables for the purpose of his TP study. The TPO ultimately based on the data worked out in respect of 26 companies, determined the Arm s Length margin at 24.23% on cost, and transfer price adjustment to be made at ₹ 2,28,50,421, vide his order under S.92CA dated 31.8.2010. 9. On the objections raised by Assessee against the action of the Transfer Pricing Officer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e before it, vide its directions under S.144C(5) of the Income Tax Act,1961, dated 9.8.2011. 10. In pursuance of the directions of the Dispute Resolution Panel, the Assessing Officer, passed the order under S.143(3) read with 144C of the Act, on 25.8.2011, whereby he re-computed the Transfer Pricing adjustment to be made at ₹ 2,07,22,767; and also rejected Assessee s plea for reduction of communication Charges like internet, postage and telephone charges and insurance from the total turnov .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

el Transmatic Ltd. (Seg.) 21.11 2. Avani Cimcon Technologies Ltd. 52.59 3. Datamatics Ltd. 1.38 4. E-Zest Solutions Ltd. 36.12 5. Flextronics Software Systems Ltd.(Seg) 35.31 6. Geometric Ltd. (Seg) 10.71 7. Helios & Matheson Information Technology Ltd. 36.63 8. IGate Global Solutions Ltd. 7.49 9. Infosys B P O Ltd. 40.30 10. Ishir Infotech ltd. 30.12 11. KALS Information Systems Ltd.(Seg.) 30.55 12. LGS Global Ltd. (Lanco Global Solutions Ltd.) 15.75 13. Lucid Software Ltd. 19.37 14. Mediso .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

essee has no objection with regard to Datamatics Ltd., E-Zest Solutions Ltd., Geometric Ltd.(Seg). Igate Global Solutions Ltd., Lanco Global Systems Ltd., Media Soft Solutions Ltd. Mind Tree Consulting Ltd. (Seg.), Persistent Systems Ltd., Integra Solutions Ltd., R.S. Software (India) Ltd. , R. Systems International Ltd. (Seg)., S I P Technologies and Exports Ltd., Sasken Communication Tech Ltd.(Seg.), Thirdware Solutions Ltd. (Seg.). We may hereinafter deal with the objections raised by the ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Ltd. 6. Tata Elexsi Ltd. (Seg.) 7. Wipro Ltd. (Seg.) 15. The learned counsel for Assessee has also raised an additional ground whereby the inclusion of the following four companies selected by the TPO as comparable, notwithstanding the objections raised by Assessee, has been questionedITA 1. Kalls Information Systems Ltd. (Seg.) 2. Accel Transmatic (Seg) 3. Flextronics Software Systems ltd. (Seg.) 4. Helios & Matheson Information Tech. Ltd. The said additional ground has been filed alongwith .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

We have heard the arguments of both the sides and also perused the relevant material on record, including the paper-books and detailed filed by Assessee. It has been brought to our notice by the learned counsel for Assessee, and not disputed by the Learned Departmental Representative, that in assessee s own case for the assessment year 2006-07, the issue relating to comparable nature of three of the companies named in the original ground, viz. Megasoft Ltd., Infosys Technologies Ltd. and Tata 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

p; Matheson Information Tech. Ltd. has come up for consideration before this Tribunal for assessment year 2007-08 itself, in the case of Sumtotal Systems India P. Ltd., Hyderabad in ITA No.1710/Hyd/2011, wherein the Tribunal vide its order dated 9.5.2014 has accepted the contentions for exclusion of these nine companies under consideration before it. Relevant portion of the said order of the Tribunal, being para 7 thereof, reads as under- 7. Each of these comparables in dispute, challenged in gr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vice provider. Coordinate Bench of this Tribunal in the case of Virtusa (India) Pvt. Ltd. (ITA No. 1962/Hyd/2011 dated 30/08/2013) after following some other decisions of the Tribunal has held this company cannot be treated as comparable as this company is also into product development. As segmental details of operating income of software development services and sale of software products are not available, it could not be ascertained whether the profit ratio of this company can be taken into 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

.7821/Mum/2011 e) Triology E-Business Solutions ITA.No.1054/Bang /2011 f) Bearing Point Business ITA.No.1124/Bang/2011 g) LG Soft India Pvt. Ltd. ITA.No.1121/Bang/2011 h) Transwitch India P. Ltd. ITA.No.948/Bang/2011 i) Mercedes Benz Research & Development ITA.No.1222/Bang/2011 j) CSR India P. Ltd. ITA.No.1119/Bang/2011 k) First Advantage ITA.No.1086/Bang/2012 l) HCL EAI Services Ltd. ITA.No.1348/Bang/2011 We herefore direct the Assessing Officer /TPO to exclude this while computing ALP. INF .....

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 operation it not only enjoy economies of scale in the lower cost of infrastructure facilities and employees but also earning profit. It was submitted that the company has diversified activities including products, consultancy and solutions. Company own intangibles and assume considerable risk which results in earning higher profits. In support of such contention the ld. AR relied upon a number of decisions, copies of which are placed in the paper book. 7.2.1. The learned DR strongly contesti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hereas TPO has considered only current year data. The learned AR further submitted that if Assessee has mistakenly selected a comparable, it cannot be estopped from objecting to the selection of that comparable in proceedings before higher forum. In this context, the learned AR relied upon the Incometax Appellate Tribunal Special Bench decision in case of Quark Systems, 4 ITR (Trib) 606. 7.2.3. We have considered the submissions of the parties and perused the materials on record. On considering .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gies Ltd. as comparable but that cannot prevent Assessee from objecting to the aforesaid company being selected as comparable, if there are valid reasons for doing so. In this context, the contention of the learned AR that Assessee has selected Infosys Limited on the basis of three years financial data, whereas the TPO considered only the current year data also needs to be appreciated. Therefore, considering the enormity of turnover of the company as well as other relevant factors, the aforesaid .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

21/Mum/2011 e) Triology E-Business Solutions ITA.No.1054/Bang/2011 f) Adaptec (India) P. Ltd. vs. DCIT ITA.No.1801/Hyd/2009 g) Trinity Advanced Software Labs P. Ltd. vs. ACIT ITA.No.1129/Hyd/2005 We therefore direct the Assessing Officer /TPO to exclude this while computing ALP. ISHIR INFOTECH LTD 7.3. So far as this company is concerned, Assessee has sought exclusion of the aforesaid company on the ground that this company fails employee cost filter as its employee cost was only 3.96%. In this .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tated below : a) M/s. Foursoft Limited (ITA.No.1903/H/2011) b) Intoto Software India P. Ltd. ITA.2102/H/2010 c) LG Soft India P. Ltd. ITA.1121/Bang/2011 d) Transwitch India P. Ltd. ITA.948/Bang/2011 f) Mercedes Benz Research & Development ITA.No.1222/Bang/2011 g) CSR India P. Ltd. ITA.No.1119/Bang/2011 h) First Advantage ITA.No.1086/Bang/2012 i) HCL EAI Services Ltd. ITA.No.1348/Bang/2011. Respectfully following the aforesaid decisions of the coordinate bench, we direct the Assessing Officer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. (supra), it is seen that the co-ordinate bench has excluded the aforesaid company accepting assessee s contention that segmental data in respect of sale of products and software services are not available. Further following cases also considered the above company and excluded the same on same reason. a) M/s. Foursoft Limited (ITA.No.1903/H/2011) b) Intoto Software India P. Ltd. ITA.2102/H/2010 c) Telcordia Technologies India P. Ltd. ITA.No.7821/Mum/2011 c) LG Soft India P. Ltd. ITA.1121/Bang/2 .....

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 a product development company and margin from software development services is 23.11%. As can be seen, in case of M/s Virtusa (India) Pvt. Ltd. (supra), the Co-ordinate Bench of the Tribunal while considering Assessee s objection with regard to the aforesaid company had directed the Assessing Officer/TPO to take only segmental margin of this company for computing ALP. Similar view was also expressed in the following cases : a) M/s. Foursoft Limited (ITA.No.1903/H/2011) b) M/s. Conexant System .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ervices Ltd. ITA.No.1348/Bang/2011. Respectfully following the aforesaid orders of co-ordinate benches, we direct the Assessing Officer /TPO to consider only the segmental margin of this company for the relevant assessment year for computing ALP. TATA ELXSI LIMITED : 7.6. Assessee has sought exclusion of the aforesaid company by placing reliance upon the information furnished by said company u/s 133(6) wherein the said company has admitted that it cannot be treated as comparable with any other s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the learned AR relied upon the following decisions: a) Telcordia Technologies India P. Ltd. ITA.No.7821/Mum/2011 b) Triology E Business Solutions, ITA No. 1054/Bang/2011. c) M/s. Foursoft Limited (ITA.No.1903/H/2011) d) M/s. Virtusa (I) P. Ltd. ITA.No.1962/Hyd/2011 e) M/s. Conexant System India P. Ltd. ITA.No.1978/Hyd/2011. 7.6.1. The learned DR, on the other hand, supported the orders of the AO/TPO and DRP in this regard and referred to the observations made by the TPO in his order. 7.6.2. We .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

m Assessee company. We agree with the contention of the learned AR that the nature of product developed and services provided by this company are different from Assessee as have been narrated in para 6.6 above. Even the segmental details for revenue sales have not been provided by the TPO so as to consider it as a comparable party for comparing the prof it ratio from product and services. Thus, on these facts, we are unable to treat this company f it for comparability analysis for determining 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

jecting to the aforesaid company being treated as comparable, the learned AR submitted that the TPO only on considering segmental details submitted by the said company for IT services, in response to notice issued u/s 133(6), has considered it as a comparable. It was submitted that the aforesaid company is a diversified company and discloses segmental information for IT services and products as one segment in its annual report. It was submitted that the TPO has not provided any other documents 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

d., ITA No. 1129/H/2005. c) M/s. Foursoft Limited (ITA.No.1903/H/2011) d) M/s. Virtusa (I) P. Ltd. ITA.No.1962/Hyd/2011 e) M/s. Conexant System India P. Ltd. ITA.No.1978/Hyd/2011. f) Adaptec (I) P. L.td. ITA.No.1801/Hyd/2011. 7.7.1. The learned DR on the other hand supported the orders of the DRP as well as TPO so far as the selection of the aforesaid company as comparable while determining ALP. 7.7.2. We have heard the submissions of the parties and perused the material on record. The ITAT Mumb .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lting into higher prof itabil ity, therefore, cannot be compared with Assessee company at all. There are several judgments of ITAT which have been referred in para 6.5 above, that Wipro cannot be taken as comparable case for comparable case with the company like assessee. In view of these facts and the reasoning given in the case of Infosys, we hold that Wipro also cannot be considered as a comparabil ity analysis, hence, would not be included in the list of the comparable entities as identif ie .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed as comparable with Assessee. ACCEL TRANSMATIC LTD. : 7.8. With regard to this company, the complaint of Assessee is that this company is not a pure software development service company. It is further submitted that in a Mumbai Tribunal Decision of Capgemini India (F) Ltd v Ad. CIT 12 Taxman.com 51, the DRP accepted the contention of Assessee that Accel Transmatic should be rejected as comparable. The relevant observations of DRP as extracted by the ITAT in its order are as follows: In regard .....

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 (the net stop for engineers)- training services in hardware and networking, enterprise system management, embedded system, VLSI designs, CAD/ CAM/BPO (iv) Accel Animation Studies software services for 2D/3D animation, special effect, erection, game asset development. 7.8.1. On careful perusal of the business activities of Accel Transmatic Ltd. DRP agreed with Assessee that the company was functionally different from Assessee company as it was engaged in the services in the form of ACCEL IT and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oft India P. Ltd. ITA.1121/Bang/2011 e) Transwitch India P. Ltd. ITA.948/Bang/2011 f) Mercedes Benz Research & Development ITA.No.1222/Bang/2011 g) CSR India P. Ltd. ITA.No.1119/Bang/2011 h) HCL EAI Services Ltd. ITA.No.1348/Bang/2011. Respectfully following the decisions of the Coordinate Benches of the Tribunal, we direct that this company should be excluded from the list of comparables. KALS INFORMATION SYSTEM LIMITED : 7.9. As far as Kals Information System Limited is concerned, learned .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ngalore in the case of M/s. HCL EAI Services Ltd. vs. DCIT IT(TP) A. No. 1348/ Bang/2011 at para 17 at pages 24 to 26 of its order has discussed at length the reasons for not considering the said company as comparable to software development services company. The relevant portion of the order is reproduced hereunder : (d) KALS Information Systems Ltd. 46. As far as this company is concerned, the contention of Assessee is that the aforesaid company has revenues from both software development and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

I, ITA No. ITA No 1386/PN/1O wherein KALS as comparable was rejected for AY 2006-07 on account of it being functionally different from software companies. The relevant extract are as follows: 16. Another issue relating to selection of comparables by the TPO is regarding inclusion of Kals Information System Ltd. Assessee has objected to its inclusion on the basis that functionally the company is not comparable. With reference to pages 185-186 of the Paper Book, it is explained that the said compa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rom the final set of comparables, and thus on this aspect, assessee succeeds. Based on all the above, it was submitted on behalf of Assessee that KALS Information Systems Limited should be rejected as a comparable. 47. We have given a careful consideration to the submission made on behalf of Assessee. We find that the TPO has drawn conclusions on the basis of information obtained by issue of notice u/s.133(6) of the Act. This information which was not available in public domain could not have be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Services Ltd. ITA.No.1348/Bang/2011 as well as M/s. Trilogy E-Business Solutions ITA.No.1054/Bang/2011 are into software development services to its parent companies. Assessee is also into similar type of activity. Therefore, the decision taken in M/s. Trilogy E-Business Software India Private Limited as well as M/s. HCL EAI Services Ltd. to exclude Kals Information Systems Ltd. applies to the facts of the case before us also. Similar view has been expressed by the Coordinate Bench of the Tribu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

from the list of comparables. 18. Similarly, as contended by the learned counsel for Assessee comparable nature of Flextronics Software Systems Ltd.(Seg) and Helio & Matheson Information Tech Ltd., has been rejected by coordinate bench of the Tribunal in the case of M/s. Axsys Heathcare Ltd. vide order dated 28.5.2014 in ITA No.2076/Hyd/2011 for the assessment year 2007-08, for the following reasons- 14. After hearing rival contentions, we agree that the following comparables were excluded .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at there is functional dissimilarity between Assessee and these companies and without making adjustment for the dissimilarities brought out by the TPO himself, these companies cannot be taken as comparable companies. The method adopted by the TPO to allocate expenditure proportionately to the software development services and software product activity cannot be said to be correct and reasonable. Wherever, the Assessing Officer/TPO cannot make suitable adjustment to the financial results of the c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ntor Graphics P. Ltd. vs. DCIT 109 ITD 101 (Del.) with reference to this comparable. 15. After considering the contentions, we are of the opinion that these 14 comparables are required to be excluded by the TPO. Respectfully following the decisions of the Coordinate Benches of the Tribunal, we direct that these companies should be excluded from the list of comparables as assessee turnover is only 2.18 crores and employee cost is more. Many of the companies are also found to be not functionally s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(ITA No.1962/Hyd/2011) (c) M/s. Contexant System India Pvt. Ltd.(ITA Nos.1978/Hyd/2011) (d) Intoto Software India Pvt. Ltd. (ITA No.2102/Hyd/2010) (e) Triology E Business Solutions (ITA No.1054/Bang/2011) (f) Telcordia Technologies India Pvt. Ltd. (ITA No.7821/Mum/2011) (g) LG Soft India Pvt. Ltd. (ITA No.1121/Bang/2011) (h) Transwitch India Pvt. Ltd. (ITA No.948/Bang/2011) (i) Mercedes Benz Research & Development (ITA No.1222/Bang-/2011) (j) CSR India Pvt. Ltd. (ITA No.1119/Bang/2011) (k) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

w ground No.7 of Assessee along with additional ground and direct the Assessing Officer to exclude the above eleven companies from the scope of comparability analysis. 21. The next effective grievance of Assessee that survives for consideration raised in ground no.8 in this appeal, as noted above, relates to the exclusion of the following comparable companies selected by Assessee, but rejected by the TPO/DRP- (a) Aztecsoft Limited (b) Birla Technologies Limited (c) Goldstone Technologies limited .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

six companies, has come up for consideration before this Tribunal for assessment year 2007-08 itself, in the case of Sumtotal Systems India P. Ltd., Hyderabad in ITA No.1710/Hyd/2011, wherein the Tribunal vide its order dated 9.5.2014 has rejected the contentions of Assessee for inclusion of all the six companies under consideration before it. Relevant portion of the said order of the Tribunal, being para 8 thereof, reads as under- 8. In Ground No. 8, Assessee has challenged the action of the T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fotech, they are functionally similar. It was the submission by the Ld. Counsel that they are not functionally different and TPO should have considered segmentals from the details furnished by Assessee. In the case of L & T Infotech., even though information was not received under section 133(6), it was the submission that this company also should be considered as the comparable. As far as PSI Data Systems Ltd. are concerned, the TPO is rejected the comparison on the related party transactio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

TPO and DRP forms that these comparables are not functionally similar to Assessee on the basis of various filters adopted by the TPO, it would be better if the matter is left like that rather than ordering fresh enquiry. We also noticed that these companies have related party transactions and therefore, may not justify on various filters adopted. As far as Indium Software India Ltd. there is a finding that this company is functionally different. L & T Infotech also found to be functionally d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arty transactions. Even with reference to software development services, since there is already a finding by the TPO on this issue, we are of the opinion that there is no need to consider the above comparable at this stage. So far as the VMF Software Ltd. is concerned, even though this company may be includable on the basis of foreign exchange earnings being 93% of the revenue, it was rejected in the case of Virtusa India P. Ltd. ITA.No.1962/Hyd/2011, wherein it was recorded that there was a spe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xists we are also of the opinion that the aforesaid company has been rightly rejected, as comparable, even though on a different filter applied by the TPO. In view of the above, we are of the opinion that there is no need to consider any of the comparables, already rejected by the TPO/DRO for the reasons stated above. 23.1 Respectfully following the above, we are of the opinion that assessee has not made out a proper case for inclusion of above comparables. Accordingly we reject ground no 8 rais .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arges have to be excluded from the export turnover, and the issue that remains to be considered is whether it has to be reduced from the total turnover as well, in the computation of deduction under S.10A. This issue of deductibility of communication charges from total turnover as well, is also covered by the decision of the Hon'ble Bombay High Court in the case of CIT V/s. Gemplus Jewellery (330 ITR 175) and Special Bench (Chennai ) decision of this Tribunal in the case of ITO V/s. Saksoft .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the decision of the Bombay High Court in the case of Gemplus Jewellery (supra), we allow this ground of Assessee and direct the Assessing Officer to reduce the communication charges from export turnover as well as total turnover while computing deduction under S.10A of the Act. 26. In the result, assessee s appeal, ITA No.1658/Hyd./2011 for assessment year 2007-08, is treated as partly allowed. Revenue s Appeal : ITA No.12329/Hyd/2013 : Assessment year 2007-08 27. This appeal of the Revenue is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ped assessment, and treating the transfer pricing adjustment of ₹ 2,07,22,767 made in the assessment ultimately made by the Assessing Officer in pursuance of the directions of the Dispute Resolution Panel, for the year under consideration, as the concealed income of Assessee, initiated the proceedings for levy of penalty under S.271(1)(c) of the Act. Not satisfied with the explanation of Assessee in response to the penalty notice, Assessing Officer proceeded to impose a minimum penalty of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Article: SERVICES UNDER REVERSE CHARGE UNDER GST REGIME

Forum: Duty Drawback & Input Credit - under GST

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

Forum: Credit on Repair of Company Car & Its Insurance

Highlight: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017 - Notification

Highlight: Companies (Acceptance of Deposits) Second Amendment Rules, 2017 - Notification

Highlight: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg. - Circular

Highlight: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 - Public Notice

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Circular: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20

Notification: Companies (Acceptance of Deposits) Second Amendment Rules, 2017

Notification: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017

Forum: Trans1 return

News: Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified

Circular: Promote the officers of the Indian Revenue Service (Customs and Central Excise) to the grade of Principal commissioner of customs, GST & CX

Circular: Allocate the charges amongst the Members of the Central Board of Excise and Customs

Circular: Strategy for audits in 2017-18 consequent to GST - Audit by Central Excise and service Department to continue for the accounting year 2016-17 and for the past period

Circular: Appoint the IRS (C&CE) officers as Principal Commissioner (Revision Application) and ex-officio Additional Secretary

Circular: Time limit for filing intimation for composition levy under Rule 3(1) of the CGST Rules, 2017 extended to 16-8-2017

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

Circular: C.B.E. & C. Advisory on Customs related matters on introduction of Goods and Services Tax regime

Circular: List of Reduced Tax Liabilities under GST regime in comparison to present combined Indirect Tax rates

Circular: Works Contract for construction of Flats, Complex — Builders to pass on GST benefit to buyer otherwise anti-profiteering provisions of Section 171 of GST Act to apply

Circular: Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero rated supply for the purpose of Compensation Cess on exports – Regarding.

Circular: Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance- regarding

News: RBI Reference Rate for US $

Highlight: Addition u/s 23(1)(a) - deemed rent - once the property is let out and at any point of time this remained vacant during the same cannot be brought to tax under the head House properties income.

News: Haryana constitutes screening committee on anti-profiteering

Highlight: Valuation of imported goods - it is necessary to re-examine the matter of both license agreement as well as supply contract simultaneously, to see if the enhanced royalty was in the guise of adjustment of the price of components.

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

Highlight: Cenvat credit availed on Club Membership for the Director is not admissible as it cannot be said to be remotely connected with the activity of manufacture

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Jaitley asks biz not to wait till last day to file GST returns

Circular: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg.

Article: 20 Things You must know about E Way Bills in GST Law

Article: ‘DUTY DRAWBACK’ CANNOT BE EQUATED WITH ‘REBATE OF DUTY’

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

News: Notification regarding GST rate for branded cereal, pulses and flour

Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Constitution of National Anti-profiteering Authority (NAA) under GST-reg. - Trade Notice

Highlight: Amendments in Hand Book of Procedures 2015-20 –reg. - Various amendments are made in Chapter-4 of Hand Book of Procedures 2015-2020.

Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

News: RBI Reference Rate for US $

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector – reg.



|| 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