Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Home Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles News Highlights
Extracts
Home List
← Previous Next →

NTT Data India Enterprises Application Services Private Limited. Hyderabad. (formerly known as Intelligroup Asia Pvt. Ltd. merged with NTT Data Global Delivery Services Limited) Versus Asstt. Commissioner of Income-tax, Circle 2 (1) , Hyderabad

2016 (1) TMI 1300 - ITAT HYDERABAD

TPA - comparability - Held that:- Assessee provides software development services to the group and is stated to have been compensated at cost plus 15% mark up on such cost. It also provides software developments services to third parties. Thus companies functionally dissimilar with that of assessee need o be deselected from final list of comparable. - Erroneous adoption of operating margin and arithmetic mean of comparable companies by the learned Transfer Pricing Officer - It was submitted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssessment proceedings. - Exclude the TP adjustment on the non-AE transactions - Held that:- The entire cost was taken by the TPO for making adjustment, thereby invoking the TP proceedings on non-AE transactions as well. Therefore, we direct the Assessing Officer/Transfer Pricing Officer to exclude the TP adjustment on the non-AE transactions and re-work out the costs pertaining to the AE transactions and restrict the adjustment if any, only to the AE transactions. With these directions, 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

imed by the assessee at ₹ 55,70,991. We therefore, reiterate the direction given by the Dispute Resolution Panel to examine the issue and give credit of TDS to the assessee. - ITA No. 2190/Hyd/11 - Dated:- 22-1-2016 - P. Madhavi Devi (Judicial Member) And B. Ramakotaiah (Accountant Member) For the Appellant : Suvibha Nolkha For the Respondent : Mythli Rani CIT-DR ORDER B. Ramakotaiah (Accountant Member) This an appeal by the assessee against the order of the Assessing Officer under S.143(3 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ware development services in the areas of ERP, sales design implementation, maintenance and providing internet technology sales to its customers. It is required to customise software based on software design specifications, determined by Intelli group or other related associated enterprises. Assessee provides software development services to the group and is stated to have been compensated at cost plus 15% mark up on such cost. It also provides software developments services to third parties. On .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

₹ 103.35 crores. The assessee has reported total operating revenue at ₹ 149.89 crores. In the transfer pricing study by the assessee, it has selected seventeen comparables with average profit margin of 10.86% of cost. Assessee determined the profit margin at 11.71% and treated the margin so arrived at as within the Arm s Length range. The TPO however, rejected the TP study on the reason that the assessee did not use comparable data of the year under consideration and has used earlier .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

short fall was arrived at ₹ 24.83 crores and suggested for transfer pricing adjustment of the above amount. 3. Assessee objected before the Dispute Resolution Panel. After considering various contentions of the assessee, the Dispute Resolution Panel accepted only that two companies, viz. Celestial Labs Ltd. and M/s. Geometric Ltd. cannot be considered as comparables and accordingly directed the Assessing Officer to compute the ALP after excluding the above two companies. The final list 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

13.90 12. Sasken Communication Tech Ltd. (Seg) 22.17 13. Thirdware Solutions Ltd. (Seg) 25.12 14. Accel Transmatic (Seg) 21.11 15. Avani Cimcon Technologies Ltd. 52.59 16. Flextronics Software Systems Ltd.(Seg) 25.31 17. Helios & Matheson Information Tech Ltd. 36.63 18. Infosys Technologies Ltd. 40.30 19. Ishir Infotech Ltd. 30.12 20. Kals Information Systems Ltd.(Seg) 30.55 21. Lucid Software Ltd. 19.37 22. Mega Soft Ltd. 60.23 23. Tata Elxsi Ltd. (Seg.) 26.51 24. Wipro Ltd. (Seg.) 33.66 4 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

llip; 2. …. 3. On the facts and in the circumstances of the case and in law, the Hon'ble DRP erred in upholding/confirming the fresh bench marking analysis undertaken by the learned TPO, which is defective in nature due to following reasons and is liable to be quashed: (g) i. The ld TPO/DRP erred in not undertaking an objective comparative analysis and inter-alia selecting the following companies as comparables to the Appellant for determination of ALP under TNMM i. Accel Transmatic L .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he operating margin of the Appellant and determined the TP adjustment (n) On the facts and in the circumstances, the Ld. CIT(A) TPO/DRP erred in making/confirming negative working capital adjustment to the arithmetic mean of the comparable companies in determining the Arm s Length Price relating to International transactions of the appellant. 4. On the facts and in the circumstances of the case and in law, the learned TPO erred and the Hon'ble DRP further erred in upholding/confirming the ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2)of the Act. 5.2 denying adjustment relating to different functions and risk of the assessee vis-à-vis the comparable companies. 6. On the facts and circumstances of the case and in law, the learned Assessing Officer/Hon'ble DRP erred in not granting full Tax Deducted at Source(TDS) credit of ₹ 55,70,991 as claimed in the return of income and the TDS certificates produced before the learned AO, thus resulting in short credit of TDS amounting to ₹ 31,81,369 to the appellan .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tware Development India Pvt. Ltd. in ITA No.1658/Hyd/2011 vide its order dated 24.9.,2015 for assessment year 2007-08. Learned counsel submitted that the assessee has raised the same objections with reference to the above comparables and requested for exclusion of the said companies taken as comparables Relevant portion of the order of this Tribunal dated 24.9.2015 in the case of United Online Software Development India Pvt. Ltd., is as under- 16. We have heard the arguments of both the sides an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s named in the additional ground, viz. Accel Transmatic (Seg) and Kalis Information Systems Ltd. (Seg.) has come up for consideration before the Tribunal in ITA No.1500/Hyd/2010, and this Tribunal. 17. However, we find 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 fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ECHNOLOGIES LIMITED : 7.1. Assessee has basically sought exclusion of above company on two grounds, firstly, this company has revenue from both product and software services and segment-wise data is not available and secondly, it is contended that the company has shown super normal profit of 52.59% against average margin of other comparables. It is very much evident from the TP order that Assessee has been categorised as a software development service provider. Coordinate Bench of this Tribunal .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

foresaid decision of the Coordinate Bench pertained to the same assessment year i.e. A.Y. 2007-08, following the same, we hold that this company cannot be treated as comparable to Assessee. Other cases considered the same comparable and rejected are as under: a) M/s. Foursoft Limited (ITA.No.1903/H/2011) b) M/s. Conexant System India P. Ltd. ITA.1978/H/2011 c) Intoto Software India P. Ltd. ITA.2102/H/2010 d) Telcordia Technologies India P. Ltd. ITA.7821/Mum/2011 e) Triology E-Business Solutions .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

resaid company being treated as comparable, learned AR submitted that the company cannot be considered to be comparable to a captive service provider like Assessee, not only because of the quantum of revenue earned by them but also on account of various other factors. It was submitted that the company command a premium in the pricing of their products and services due to the goodwill, reputation and brand value. It was submitted that due to scale of operation it not only enjoy economies of scale .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ar as Infosys Technologies is concerned, Assessee itself has selected the said company in the TP documentation. Therefore, Assessee cannot again object to the TPO selecting the said company as comparable. He further submitted that only because the company has brand value and is big in size, it cannot be treated as uncomparable to Assessee. 7.2.2. In rejoinder, the ld. AR submitted that Assessee selected Infosys on the basis of three years data, whereas TPO has considered only current year data. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nnot be considered as comparable to Assessee due to various factors such as its size, turnover, brand value, scale of operation, diversified activities and owning of intangibles. As can be seen from the TP order, the turnovers of Infosys Technologies Limited during the year under consideration are ₹ 13,149 crores as against ₹ 42 crores of Assessee. Though it is a fact that Assessee in the TP documentation, has selected Infosys Technologies Ltd. as comparable but that cannot prevent A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see in any manner. This view of ours is also in tune with the view expressed by different Benches of this Tribunal as stated below as well as that of the Hon ble Delhi High Court in the case of CIT Vs. Agnity India Technologies Pvt. Ltd.,[2013] 85 CCH 146. a) M/s. Foursoft Limited (ITA.No.1903/H/2011) b) M/s. Conexant System India P. Ltd. ITA.1978/H2011 c) M/s. Virtusa (I) P. Ltd. ITA.No.1962/Hyd/2011 d) Telcordia Technologies India P. Ltd. ITA.7821/Mum/2011 e) Triology E-Business Solutions ITA. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on of co-ordinate Bench of this Tribunal in case of M/s Virtusa (India) Pvt. Ltd. (supra). On a perusal of the order passed in case of M/s Virtusa (India) Pvt. Ltd.((supra)), we find that the co-ordinate bench has held that Ishir Infotech Limited cannot be treated as comparable as it does not qualify the employee cost filter as well as RPT filter. This view of ours is also in tune with the view expressed by different Benches of this Tribunal as stated below : a) M/s. Foursoft Limited (ITA.No.190 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

parables. LUCID SOFTWARE LIMITED : 7.4. The main objection of assessee with regard to the aforesaid company is that it earns revenue both from product development as well as software services for which segmental data is not available. In support of such contention, the learned AR has relied upon the decision of co-ordinate bench in the case M/s Virtusa (India) Pvt. Ltd. (supra). On perusal of the order passed in case of M/s Virtusa (India) Pvt. Ltd. (supra), it is seen that the co-ordinate 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

1 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. Following the aforesaid decisions of the Coordinate Benches, we direct exclusion of the aforesaid company from list of comparables. MEGASOFT LIMITED : 7.5. The main objection of Assessee with regard to the aforesaid company is that this is predominantly a product development company and margin from .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tware India P. Ltd. ITA.2102/H/2010 d) Triology E-Business Solutions ITA.No.1054/Bang/2011 e) Telcordia Technologies India P. Ltd. ITA.No.7821/Mum/2011 f) Bearing Point Business ITA.No.1124/Bang/2011 g) LG Soft India P. Ltd. ITA.1121/Bang/2011 h) Transwitch India P. Ltd. ITA.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. Respectfully .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

its business. However, while the TPO selected the aforesaid company by holding that the services provided are akin to software development services, the DRP, did not comment on the comparability of this company. The learned AR submitted that comparability of the aforesaid company was considered and analysed by different benches of the ITAT and the aforesaid company was rejected as comparable to the software services provider. For such contention, the learned AR relied upon the following decisio .....

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 perused the material on record. In case of Telcordia Technologies India Pvt. Ltd., ITA No. 7821/Mum/2011, the ITAT Mumbai Bench while considering the comparability of the aforesaid company with software services provider held as under: 7.7 From the facts and material on record and submissions made by the learned AR, it is seen that the Tata Elxsi is engaged in development of niche product and development services, which is entirely different from Assessee company. We agree with the contention .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

excluded from the list of comparable parties. Following the decision of the ITAT Mumbai Bench as aforesaid and also considering the fact that the company itself in the information provided in response to the notice issued u/s 133(6) of the Act has admitted that it cannot be considered as comparable with other assessees, we direct exclusion of the aforesaid company from the list of comparables while determining ALP. WIPRO LIMITED : 7.7. While objecting to the aforesaid company being treated as 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

rt of Wipro, which is unaudited, manually corrected and unverified. It was submitted that Wipro is also considered to be a giant in its field assuming all the risks and cannot be compared to captive service provider like Assessee. To support his contentions with regard to noncomparability of the said company, he relied upon the following decisions : a) Telcordia Technologies India P. ITA.No.7821/Mum/2011 Ltd. b) Triniti Advances Software P. Ltd., ITA 1129/H/2005. No. c) M/s. Foursoft Limited (IT .....

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., ITA No. 7821/Mum/2011, while considering the objection of Assessee for treating the aforesaid company as comparable held as follows: 7.5 This company is also a global IT Company having varieties of service and products and looking to the magnitude of its operations, sales and expenses, the same cannot be taken into consideration for comparability analysis. Moreover, 67% of its sales relates to its product which are sold on premium resulting into higher profitability, therefore, cannot 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

erials on record during the year under consideration, the segmental turnover of the Wipro Ltd. Is 9616.09 crores. Therefore, considering the turnover, brand value as well as other dynamics of Wipro Ltd., it comes in the same category as Infosys and certainly cannot be compared with Assessee. Therefore, following our reasoning in case of Infosys Technologies Ltd. And other coordinate bench decisions, we hold that Wipro Ltd. cannot be treated as comparable with Assessee. ACCEL TRANSMATIC LTD. : 7. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rofile and its annual report for financial year 2005-06 from which the DRP noted that the business activities of the company were as under. (i) Transmatic system - design, development and manufacture of multi function kiosks Queue management system, ticket vending system. (ii) Ushus Technologies - offshore development centre for embedded software, net work system, imaging technologies, outsourced product development. (iii) Accel IT Academy (the net stop for engineers)- training services in hardw .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fore assessee s claim that this company was functionally different was accepted. It directed the Assessing Officer to exclude ACCEL Transmatic Ltd. from the final list of comparables for the purpose of determining TNMM margin. A similar view was taken in the following cases : a) M/s. Conexant System India P. Ltd. ITA.No.1978/Hyd/2011. b) Intoto Software India P. Ltd. ITA.2102/H/2010 c) Bearing Point Business ITA.No.1124/Bang/2011 d) LG Soft India P. Ltd. ITA.1121/Bang/2011 e) Transwitch India P. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

erent from Assessee. In support of his contention, the learned Counsel for Assessee relied upon the decision of the Bangalore Tribunal in the case M/s. Trilogy E-Business Software India Private Limited (supra) wherein at paras 46 and 47 of its order, the Tribunal has discussed the functional dissimilarity with Assessee therein and has directed that the company should be excluded from the list of comparables. Similarly, the Tribunal at Bangalore in the case of M/s. HCL EAI Services Ltd. vs. DCIT .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t that this company is engaged in providing training. It was also submitted that as per the annual report, the salary cost debited under the software development expenditure was ₹ 45,93,351. The same was less than 25% of the software services revenue and therefore the salary cost filter test fails in this case. Reference was made to the Pune Bench Tribunal s decision of the ITAT in the case of Bindview India Private Limited Vs. DCI, ITA No. ITA No 1386/PN/1O wherein KALS as comparable 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

es and is not comparable to software development services provided by Assessee. The appellant has submitted an extract on pages 185-186 of the Paper Book from the website of the company to establish that it is engaged in providing of I T enabled services and that the said company is into development of software products, etc. All these aspects have not been factually rebutted and, in our view, the said concern is liable to be excluded from the final set of comparables, and thus on this aspect, a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

report of this company as highlighted by Assessee in its letter dated 21.6.2010 to the TPO. We also find that in the decision referred to by the learned counsel for Assessee, the Mumbai Bench of ITAT has held that this company was developing software products and not purely or mainly software development service provider. We therefore accept the plea of Assessee that this company is not comparable . 7.9.1. We find that both M/s. HCL EAI Services Ltd. ITA.No.1348/Bang/2011 as well as M/s. Trilogy .....

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.1978/Hyd/2011. Ltd. b) Intoto Software India P. Ltd. ITA.2102/H/2010 c) Bearing Point Business ITA.No.1124/Bang/2011 d) LG Soft India P. Ltd. ITA.1121/Bang/2011 e) Transwitch India P. Ltd. ITA.948/Bang/2011 f) CSR India P. Ltd. ITA.No.1119/Bang/2011 g) First Advantage ITA.No.1086/Bang/2012 Therefore, respectfully following the decision of the Coordinate Benches (supra), we direct the Assessing Officer/TPO to exclude the company from the list of comparables. 18. Similarly, as contended b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arguments raised before us: ........................... 3. High Turnover- functionally dissimilar: 6. FLEXITRONICS SOFTWARE LIMITED : " As far as Flexitronics Software Limited is concerned, we find that at page 90 of his Order, the TPO has also observed that the said company has incurred expenditure for selling of products and has incurred R & D expenditure for development of the products. The above facts clearly demonstrate that there is functional dissimilarity between Assessee and 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

ar with Assessee, these companies are to be excluded from the list of comparables. Therefore, we direct the Assessing Officer/TPO to exclude from the list of comparables." …………. 14. HELIOS & MATHESON information Technology ltd This comparable is objected on the reason of low employee cost of 1.36%. Thus it fails the employee cost filter. Therefore, not comparable. Assessee relied on the judgment of Mentor Graphics P. Ltd. vs. DCIT 109 ITD 101 (Del.) with refe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ases do apply to Assessee as TPO selected same 26 comparables in all the cases relied on and decided earlier in various cases. 19. Further, as per the chart furnished before us, similar view has been taken by the coordinate benches of the Tribunal in similar matters, wherein comparable nature of above eleven companies has come up for consideration, such as- (a) M/s. Axsys Healthcare Ltd. (ITA No.2076/hyd/2011) (b) M/s.Virtusa (I) P. Ltd. (ITA No.1962/Hyd/2011) (c) M/s. Contexant System India Pvt .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s Ltd. (ITA No.1348/Bang/2011) (m) Adaptee (India) Pvt. Ltd.(ITA No.1801/Hyd/2011) 20. Respectfully following the consistent view taken by the Tribunal with regard to comparable nature of the above seven companies in similar matters and more particularly, the decision of the Tribunal in the case of Sumtotal Systems India Private Ltd. cited supra, including the decision rendered in assessee s own case for assessment year 2006-07, we allow ground No.7 of Assessee along with additional ground and 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

ating margin and arithmetic mean of comparable companies by the learned Transfer Pricing Officer. It was submitted that the TPO did not calculate the PLI of the assessee properly and excluded certain costs from the operating cost. Thereby as against the assessee s margin at 11.72%, TPO determined the margin at 10.21%. Even though learned counsel relied on various case-law, it was fairly admitted that this issue becomes academic, if Ground No.4 is considered favourably. Consequently, we direct 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

re is no working capital risk. Following the principles laid down by the coordinate bench in the case of Adaptec (India) P. Ltd. (ITA No.206/Hyd/2014 dated 25.3.2015), negative working capital adjustment should not have been made by the TPO. It was further submitted that in assessee s own case for the assessment year 2008-09, the Assessing Officer was directed to re-work out the working capital adjustment, vide para 14 of the order dated 2.1.2015. 9. We have considered the contentions. It is tru .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ny negative working capital adjustment in some of the cases in the next assessment year, in the cases of Market Tools Research P. Ltd., and Mega Systems Worldwide India P. Ltd., assessee placed on record copies of orders of DRP. In that DRP considered the issue and directed the TPO as under : 14. Ground No.11 : Negative Working Capital adjustment - Making a negative working capital adjustment without appreciating the fact that the company does not bear any working capital risks. On this issue, 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

has never taken any loans till date from the date of incorporation nor has incurred any expense for meeting the working capital requirement. We have gone through the submissions and the order of the TPO. The assessee pleaded that the DRP has acceded such a plea in some other case. On examination, we find that the DRP, Hyderabad in the case of Cordys Software India P. ltd., for A.Y. 2008-09 in its directions dated 03.08.2012 has given a finding as under : 7.7. 4 Thus, working capital adjustment .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

k while comparable companies have such a risk for them. If at all any working capital adjustment is to be made to t his situation, only a positive adjustment has to be made to the comparables so that they are brought on par with the applicant. In view of the same, the Panel directs that negative working capital adjustment to the arithmetic mean margin of the comparables shall not be made. In view of the above, the Panel directs that negative working capital adjustment to the arithmetic mean marg .....

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, we agree with the assessee s contention that Transfer Pricing Officer should not have made negative working capital adjustment. However, for assessment year 2008-09 in assessee s own case, the coordinate bench of this Tribunal has given the following directions to the Assessing Officer- 14. It was the objection of assessee that TPO has arrived at negative working capital adjustment wherein assessee does not have any risk and is a captive services provider. Therefore, following the decision 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

the TPO to re-workout the working capital adjustment after excluding certain comparable companies. We also directed the TPO to exclude certain comparables above. Consequently we direct the A.O./TPO to re-workout the working capital adjustment after giving due opportunity to assessee, keeping in mind the principles laid down on this issue. 14.1. With reference to objection of assessee that it is a captive service provider fully funded by A.E. Assessee also undertakes works for third parties. It .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

required to be done, after giving due opportunity to the assessee, while making comparability analysis consequent to this order. This ground is accordingly considered as allowed. 10. Ground No.4 pertains to the action of the Transfer Pricing Officer in considering the costs incurred for rendering services to third parties also while arriving at the Arm s Length Price of the international transactions of the assessee under TNMM. It was submitted that even though assessee has submitted segmental .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n assessee s own case for the assessment year 2008-09, vide para 15 and 16 of its order dated 2nd January, 2015, cited supra, as under- 15. A.O. while making the T.P. adjustment has considered the entire turnover including the non-A.E. transactions. Assessee objected before DRP and DRP considered vide para 57 as under : 57. The assessee submitted that the TPO erred in considering entire cost base of the company without differentiating between cost incurred in A.Es transactions and non-A.E. trans .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessee and direct that the reimbursement of ₹ 12,56,96,824/- be not taken for ALP calculation. 16. Ld. Counsel submitted that DRP got its findings mixed-up with reference to analysis of non-A.E. transaction to that of reimbursements. While direction of reimbursement is correct, the direction with reference to adjustment of non-A.E. transactions has not been given. Considering the observations of DRP and also various case law on the issue relied upon by assessee in M/s. Saven Technologies L .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Forum
what is new what is new
  ↓     bird's eye view     ↓  


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

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

Go to Mobile Version