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2016 (10) TMI 539 - ITAT CHENNAI

2016 (10) TMI 539 - ITAT CHENNAI - TM - Validity of order of the Commissioner of Income Tax (Appeals) passed after fourteen months of hearing - TPA - Held that:- The ld. Commissioner of Income Tax (Appeals) has passed order overlooking voluminous information filed in the appellate proceedings against the order passed by the ld. Assessing Officer. The Commissioner of Income Tax (Appeals) has to consider every point of dispute of assessee and pass a speaking order. But, the order passed by the Com .....

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nch of the Tribunal in the case of GAP International Sourcing India (P) Ltd. vs. DCIT (2010 (12) TMI 94 - ITAT, NEWDELHI ) and M/s. Adobe Systems India Private Ltd. v. Addl. CIT [2011 (1) TMI 933 - ITAT NEW DELHI ], the order passed by the Commissioner of Income Tax (Appeals) is without going into the details of the submissions and should be decided afresh. Considering apparent facts, material evidence and judicial decisions, we are inclined to the remit the disputed issues back to the file of C .....

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AND SHRI G. PAVAN KUMAR, JUDICIAL MEMB For The Appellant : Shri. T. Banusekar, C.A. For The Respondent : Dr. Aun C. Bharath, IRS, CIT. ORDER PER G. PAVAN KUMAR, JUDICIAL MEMBER: The appeal filed by the assessee is directed against order of the Commissioner of Income-tax (Appeals)-15, Chennai in ITA No.516/13-14/A-15, dated 20.01.2015 for the assessment year 2009- 2010 passed u/s.143(3) r.w.s. 144C (3) and 250 of the Income Tax Act, 1961 (herein after referred to as the Act ). 2. The assessee has .....

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nstructions of the Board. 3. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the order of the Assessing Officer is without jurisdiction. 4. For that the Commissioner of Income Tax (Appeals) erred in upholding tile transfer Pricing addition of ₹ 5, 15, 11,202/- 5. For that the Commissioner of Income Tax (Appeals) erred in allowing only Rs. 50 lakhs out of Rs. 5,65, 11,202/- claimed by the appellant 6. For that the Commissioner of Income Tax (Appeals) erred in rej .....

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t Without prejudice to our contention that disallowance u/s 40(a)(l) is not warranted, the same ought be considered while computing the deduction u/s.l0A. 11. For that the Commissioner of Income Tax (Appeals) erred in confirming the disallowance u/s.14A read with Rule 8D .. 3. The Brief facts of the case are that the assessee company is in business of Software Solutions including consulting Design, Development, re-engineering, systems implementation testing and placement services and filed Retur .....

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ing Arms Length Price. The ld. TPO issued notice u/s.92CA of the Act for determination of Arms Length Price in relation to international transactions. The ld. TPO on the basis of the transactions reported in Audit form under 3CEB, found the assessee company has international transaction, on segment wise aggregating to Rs. 40,26,63,930/-. The assessee company has adopted Transactional Net Margin Method (TNMM) and CUP method as most appropriate method and having 15 comparables whose Arithmetic Mea .....

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ss Intelligence Company in UK. The business connection of Acuma Solutions with other areas have Value Added Reseller (VAR) and Acuma is a educational partner to provide training for business objects and runs number of business courses. The basic object of acquiring Acuma Solutions to gain and promote training and expertise in the field of Business intelligence and imparting Business Objects. The ld. TPO found that the assessee s employees upon training in Business objects and business skills cou .....

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y got orders from Citibank only to the extent of ₹ 1.25 crores which does not commensurate with the returns. The UK based company M/s. Acuma Solutions Ltd, was functioning with loss and company turned into profits by infusing funds. The assessee company is making attempts in shifting profits outside the country as the training was provided to the said set of employees and the beneficiary is the Associated Enterprise. The assessee company incurred ₹ 12 crores expenses in two years for .....

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7 crores paid by the assessee company. The ld. Authorised Representative filed detailed explanations and submissions alongwith the margins and the transactions between parties. But subsequently, the ld. TPO determined the Arms Length Price of professional services as ₹ 50 lakhs and directed to reduce ₹ 5,15,11,202/- from professional services paid to Acuma, UK. The ld. Assessing Officer passed order u/s.143(3) r.w.s. 144C(3) of the Act dated 28.05.2013. Considering the direction of l .....

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that the ld. TPO has failed to consider the claims as per the grounds raised no. 2 and other grounds. The ld. Authorised Representative reiterated the submissions made in the assessment and transfer pricing proceedings alongwith evidence. The ld. Commissioner of Income Tax (Appeals) on the disallowance of Transfer Pricing (TP) transactions relied on the order of the TPO and concluded that the ld. TPO was legally correct in questioning the genuineness of payments made for training given to emplo .....

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ect of deduction u/s.10B of the Act in determination of export turnover following the assessee s own case for the assessment years 2002-2003 & 2003-2004 in 313 ITR 353 and directed the ld. Assessing Officer to recompute the deduction u/s.10B of the Act and on the last ground of disallowance u/s.14A of the Act, the ld. Commissioner of Income Tax (Appeals) considered the provisions and applicability of Rue 8D and Judicial decisions concluded that the action of the ld. Assessing Officer is righ .....

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x (Appeals) was passed after fourteen months of hearing and opposed to equity, natural justice and confirming the action of the ld. Assessing Officer without giving proper clarifications and also non adjudication on material filed on the action of the ld. TPO in determining Arms Length Price of international transactions without mentioning the nature of upward adjustment and the method applied and directed the ld. Assessing Officer to reduce ₹ 5,15,11,202/- from Professional Services. The .....

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r of Income Tax (Appeals) and vehemently opposed to the grounds. 7. We heard the rival submissions, perused the material on records, judicial decisions cited and paper book filed. The ld. Commissioner of Income Tax (Appeals) has passed order overlooking voluminous information filed in the appellate proceedings against the order passed by the ld. Assessing Officer. The Commissioner of Income Tax (Appeals) has to consider every point of dispute of assessee and pass a speaking order. But, the order .....

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