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TMI Blog2021 (7) TMI 1301X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/11/2012 declaring total income of Rs. 64,48,31,500/-. The return was processed under section 143 (1) of the Act. The case was selected for scrutiny and notices under section 143 (2) was issued to assessee, in response to which, representative of assessee appeared before the Ld.AO and filed requisite details as called for. 2.1 During the year under consideration, the Ld.AO observed that, assessee had international transaction with its associated enterprises that exceeded Rs. 15 crores. Accordingly, reference was made under section 92C of the Act, to the Ld.TPO. The Ld. TPO on receipt of reference called upon assessee to file economic details of the international transaction entered into by assessee with its AE. 2.2 From the details filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Detamatics Global Services Ltd., ICRA Techno Analytics Ltd., RS Software (India) Ltd. In respect of the objection raised regarding the domestic transaction forming part of international transaction, the DRP upheld the observations of the Ld.TPO. On depreciation on computer peripherals, DRP directed the Ld.AO to consider depreciation at 60%, and in respect of disallowance under section 36(1)(va) of the act in respect of employees contribution to provident fund and ESIC, the Ld.AO was directed to allow the deduction claimed by assessee provided the same was filed before the due date of return of income. 3. On receipt of the DRP directions, Ld.AO to excluded comparables directed by the DRP, however included the domestic transaction as a par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y standards etc their blend/owned by the AE. It has been submitted that this assessee does not own any nonroutine intangibles. Other assets owned by assessee are in respect of land, buildings, computer equipments, office equipment furniture fixtures etc which are used to carry out day to day business activities. 5.2 Risk assumed: in the TP study report reveals that assessee is a risk insulated company for SWD services to its AE and their affiliates. Except for foreign exchange risk, assessee do not undertake any other risk as compared to its AE. 5.3 Characterisation: based on the above assessee has been characterised as a risk insulated company providing services only to the AE and its affiliate. 6. In Ground 2.6 assessee challenges incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the comparables considered hereinabove. 8. In Ground No.2.7 assessee seeks inclusion of Sankhya Infotech ltd. 9. We note that this comparable has not been analysed by the Ld.TPO, and therefore we direct this comparable to Ld. TPO to be considered based on FAR with that of assessee. Accordingly this ground raised by assessee stands allowed for statistical purposes. 10. Ground No.5 has been raised by assessee as the Ld. AO included the value of domestic transaction for making adjustment instead of restricting the adjustment to the international transaction. 10.1 It has been submitted by the Ld. ar that the margin has been applied in respect of its domestic sales instead of restricting it to the international transaction. Statutory pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee It is therefore necessary for the ground to be admitted. The additional ground therefore raised by assessee is admitted. 13.2 The Ld.A.R. at the outset submitted that the issue stands squarely covered by the decision of Hon'ble Rajasthan High Court in case of Chambal Fertilisers and Chemicals Ltd. vs JCIT in ITA No. 52/2018 by order dated 31/07/2017. 14. Ld.CIT.DR could not controvert the above submissions of assessee. 15. We have perused submissions advanced by both sides in light of records placed before us. 15.1 Hon'ble Rajasthan High Court in the above referred case has held cess to be an allowable expenditure in the hands of assessee. Respectfully following the same we direct the Ld.AO to consider the claim of assessee in acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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