TMI Blog2019 (3) TMI 1919X X X X Extracts X X X X X X X X Extracts X X X X ..... rnational transactions with unrelated parties after allocating respective revenues and expenses to both the segments. The assessee shall place all relevant materials before the AO/TPO and comply to the requirements of AO/TPO in accordance with law. The AO/TPO shall after affording effective opportunity to the assessee shall decide this issue in accordance with law. ALP adjustment on the entire turnover (including revenue from third party customers) of the assessee - HELD THAT:- As following the order of this Tribunal in the case of M/s. Yongsan Automative India Pvt. Ltd [ 2017 (12) TMI 855 - ITAT CHENNAI] we hold that the transfer pricing adjustment has to be made only in respect of the transaction of the assessee being a tested party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endors and equipment companies in India and internationally. It provides experience and innovation with state of the art processing technology and a solid reputation ensuring outstanding customized service to each client. It works with communications service providers and telecom solutions companies in providing software services around application development and maintenance, product development and R D, testing and QA. For the assessment year 2012-13, the TPO has made adjustment to the value of international transactions at ₹1,57,04,858/-. Against that order, the assessee filed objections before the DRP. The DRP directed the AO to compute the ALP adjustment on the entire turnover (including revenue from third party customers) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the assessee had prepared self-serving documentation for its own convenience in the absence of separate cost centres maintained and hence, the TPO rejected the segmental approach and made an adjustment to the value of international transactions at ₹1,57,04,858/-. Against such an order, the assessee filed objections before the DRP. The DRP directed the AO to compute the ALP adjustment on the entire turnover (including revenue from third party customers) of the assessee on which the assessee filed this appeal. The Ld. A R invited our attention to the relevant portion of the orders of DRP, which is extracted as under:- 2.2 The observations of the TPO has been carefully considered by the Panel. There is merit in argument of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Net Operating Profit 191.08 66.46 257.54 Net Cost Plus Margins 11.79% 4.82% 8.58% The revenue from AE segment is shown at ₹ 81.12 crores and non-AE segment at rs.14.45 crores. It is seen that in above table the amount shown as direct expenses for both the segments are same for other expenses also. Even without mentioning other prima facie errors in the table it would suffice to conclude that the claim of segmental financials as submitted in the above table by the assessee is patently incorrect and deserves to be rejected outright. In view of the above, the approach of the TPO to reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to determine ALP on transactions that are not between Associated Enterprises (as admitted by the TPO), where such transactions were not covered by Chapter-X of the Income Tax Act. 4. With regard to the issue of rejection of segmentation, the Ld. AR invited our attention to the decision of Delhi Bench of this Tribunal in Birlasoft (India) Ltd. Vs. DCIT (2014) 49 taxmann.com 312 (Delhi-trib), wherein, the Hon ble ITAT following the co-ordinate Bench decision, set aside the order of the AO/TPO for the purpose of determining the arm s length price in respect of the international transactions undertaken with the associated enterprise by making internal comparison of profitability from the international transactions with unrelated parties aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue from third party customers) of the assessee, the Ld AR relied on the order of this this Tribunal in the case of M/s. Yongsan Automative India Pvt. Ltd Vs. ACIT in ITA No.357/Mds/2017 dated 16.11.2017. The relevant portion of the order of this Tribunal is extracted as under:- 7. This Tribunal is the considered opinion that under the scheme of the Income tax act, the transfer pricing adjustment has to be made only in respect of the transaction of the assessee being a tested party, with associated enterprise outside the country after comparing the transaction made by similarly placed company in uncontrolled transaction with non-Associated Enterprise. Therefore, we are unable to uphold the order of the Dispute Resolution Panel According ..... X X X X Extracts X X X X X X X X Extracts X X X X
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