TMI Blog2011 (6) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... convenience, by this consolidated order. 2. The first issue for our consideration which is common in both the appeals relates to transfer pricing adjustment. The facts of the case stated in brief are that both the assessees are subsidiaries of Heartland Asia (Mauritius) Ltd. with 99.99 per cent of share holding held by Heartland Asia (Mauritius) Ltd. and 0.01 per cent held by HCR Information Corporation, USA. These assessees are primarily engaged in providing I.T. enabled services in the area of Medical Transcription to its parent company HCR Information Corporation, USA. Both the companies are hundred per cent export oriented under the software technology park scheme of the Department of Electronics, Govt. of India. Both the assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iption Services Pvt. Ltd. at ₹ 1,51,51,186/- and in the case of Heartland Bangalore Transcription Services Pvt. Ltd. at ₹ 1,78,02,353/-. The assessing I. T. Appeal No. 5175 (Del) of 2010 A N D I. T. Appeal No. 5176 (Del) of 2010 officer adopted the arms length price as determined by the TPO under section 92-CA(3) / 154 of the Act in both the cases. The AO while computing total income disallowed the claim of exemption under section 10-A in the case of Heartland Delhi Transcription Services Pvt. Ltd. on the ground that STPI authorities have given no objection to the succession of business of medical transcription services provided by the undertaking which do not have any relevance with allowability of deduction under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation of section 10-B. In the absence of the said approval by the said 'Board', the assessees was disqualified from claiming deduction under section 10-B of the Act. The approval granted to the assessees by the STPI Authorities could not be regarded as approval granted by the said 'Board'. The ld. DRP further noted that from AY 2002-03 the assessee had been claiming deductions under section 10-B of the Act, it could not be permitted to start claiming deduction under section 10-A of the Act in respect of the same undertaking. The ld. DRT, therefore, disallowed the claim of the assessee. I. T. Appeal No. 5175 (Del) of 2010 A N D I. T. Appeal No. 5176 (Del) of 2010. 4. The next contention raised before the ld. DRP r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. As regards rejection of comparables on the ground of incurring losses year after year the DRP agreed with the TPO that comparables showing losses from year to year or showing highly unpredictable profitability or showing as down-ward trend for the four years could not be selected in transfer pricing study as comparables. The assessee also objected that the AO had not allowed comparability adjustments for working capital and for risk adjustment. The ld. DRP noted that ITAT in the case of Phillips Software P. Ltd. had allowed risk adjustments, but the operation of judgement of the ITAT had been stayed by Hon'ble Karnataka High Court. The ld. DRP accordingly rejected the objection of the assessee regarding not allowing any c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on record. From the order of the ld. DRP we find that the assessee has raised objections on various points on which the ld. DRP has not passed speaking order. The objections raised by the assessee have been summarily rejected. 5 per cent standard deduction has been denied on the ground that proviso to section 92C(2) of the Act has been amended though the said Amendment has been made by Finance (No.2) Act, 2009 with effect from 1/10/2009. Prior to this amendment as per proviso to section 92C(2) the assessee was eligible for 5 per cent of adjustments. Since the amendment has been made effective from 1/10/2009 it is held that the assessee will be eligible for 5 per cent of adjustment while computing arms length price. The assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
