TMI Blog2012 (1) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... ch may be somewhere around ₹ 2 crores. Thus, the assessee is required to pay sum of ₹ 1 crore now for becoming entitled to the stay of demand conditionally. Considering the difficulties narrated by the learned counsel to pay the said demand in one go, we direct the assessee to pay the same in five equal monthly instalments. The first instalment should be paid at the end of this month i.e. January, 2012. We also consider the assessee's request for early hearing and the same is acceded to. Thus the case is posted for hearing on 23rd February, 2012 as pronounced in the open Court. - S.A. No. 75 (Pune) of 2011, IT Appeal No. 1605 (Pune) of 2011 - - - Dated:- 16-1-2012 - SHAILENDRA KUMAR YADAV AND D. KARUNAKARA RAO For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrived at an arm's length OP/TC of 25.24%. With respect to the IT enables services segment as well, the TPO rejected certain comparable companies on various grounds and considered single year financial data of the comparables and arrived at an arm's length OP/TC of 32.74%. The TPO also disregarded the need for making adjustments on account of differences in the risk profile of the comparable companies and the assessee. The assessee conducted detailed benchmarking analysis which is documented in the transfer pricing study report (TO report). As per the said study conducted, the assessee selected the Transactional Net Margin Method (TNMM) as the most appropriate method and operating profit as a proportion of total cost as the profit l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PO did not provide the benefit of risk adjustment to account for the significant differences in the risk profile of the assessee and the comparables. 3. Finally, TPO passed an order proposing an addition of ₹ 103,840,122/-. The Assessing Officer relied on the TPO's order and passed a draft assessment order dated 16th December, 2010 u/s 144C(1) of the Act confirming the abovementioned addition made by the TPO. Matter travelled to the DRP of the Revenue. Assessee made various submissions here. On hearing the parties, DRP vide directions issued u/s 144C of the Act dated 20th May upheld the draft order of the AO. Thereafter, in line with the directions issued by the DRP, the AO confirmed an adjustment of ₹ 103,840,122 vide it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax payable is pegged at ₹ 5,43,92,973/- and the assessee has not paid any part of it till date. It includes the component attributable to the statutory interest levied u/s 234B, 234C of the Act which amounts to ₹ 1.97 crores (rounded of). 5. During the hearing time of the said proceedings, admitting that the no part of the impugned tax demand has been paid by the assessee as the same is disputed and in all probability, Ld. Counsel for the assessee prophesised by stating that the additions made by the AO/TPO/DRP shall not stand the test of the scrutiny of the legal forums and the additions may have to be deleted. Therefore, it is the case of inflated or high-pitched or infructuous additions and therefore, ideally this is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue has merely mentioned that the assessee should pay at least 50% of the demand raised by the AO. 6. We have heard both the parties and perused the orders of the Revenue and find that the AO/TPO/DRP denied the benefit of the provisions of the proviso to section 92C(2) of the Act. This is not in accordance with the pronounced decisions of various Benches including that of Pune. In effect, the demand relatable to this issue becomes clearly irrecoverable demand. We have also considered assessee's readiness to pay some tax and on considering assessee's capacity to pay and the requirements of Government of India, we are of the opinion that the assessee must pay 50% of the clear disputed demand (after excluding the demand relate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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