9911796707
TMI Blog2022 (10) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.08.2017 relating to A.Y. 2013- 14. 2. Briefly stated facts of the case are that the assessee-company was incorporated on 31.03.2000 and is engaged in the business of IT enabled services. The Company is also operating and managing the activities of BPO centres, call centres and providing warehousing facility service to various customers. It filed it's return of income on 22.11.2013 declaring NIL income after setting-off unabsorbed depreciation of Rs.6,97,59,054/- under normal provisions of the I.T. Act, 1961. The case of the assessee company was selected for scrutiny and notice under section 143(2) of the I.T. Act, 1961 was issued on 05.09.2014 and was duly served upon the assessee company. Subsequently, notices under section 142(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. Act, 1961 issued directions dated 30.08.2017 to the TPO by reducing the transfer pricing adjustment amounting to Rs.49,33,499/- as against a sum of Rs.60,94,597/- proposed by the TPO. Pursuant to the directions of the DRP dated 30.08.2017, the TPO gave effect to DRP directions vide order dated 17.10.2017 and reduced the transfer pricing adjustment to Rs.49,33,499/-. The A.O. by following the directions of DRP/TPO passed the assessment order dated 24.10.2017 and determined the total income of the assessee at Rs.1,82,24,622/- under section 143(3) r.w.s.144C of the I.T. Act, 1961. 3. Aggrieved by the assessment order passed by the A.O. dated 24.10.2017 under section 143(3) r.w.s.144C of the I.T. Act, 1961, the assessee carried the matter i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained by the Appellant by merely stating that the segments created in the TP report are artificial. 6. That on facts and in the circumstances of the case and in law, the DRP/AO/TPO erred in application of external TNMM by identifying companies which are not comparable to the Appellant in terms of functions, assets and risk profile. 7. That on facts and in the circumstances of the case and in law, the DRP/AO/TPO erred in the computation of related party transactions filter ("RPT filter") as well as the computation of margins of comparable companies as proposed by the TPO. 8. That on facts and in the circumstances of the case and in law, the DRP/AO/TPO erred in treating the over-due receivables from AEs as an international transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Del./2016 vide order dated 12.11.2021 wherein the Tribunal allowed the claim of assessee i.e., to adopt internal TNMM for bench marking provisions of ITEs. The Learned Counsel for the Assessee prayed that since the present grounds are squarely covered by the aforesaid order of the Coordinate Bench of the Tribunal dated 12.11.2021 (supra), similar directions may please be passed by allowing the claim of assessee company in respect of adopting internal TNMM. 8. The Ld. D.R. on the other hand strongly relied on the orders of the authorities below. He submitted that the assessee-company failed to distinguish the services rendered by it to the AEs [ITeS] and non-AEs [BPO]. Since the functions of AEs and non-AEs are not the same and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TPO/AO simply stated that the nature of services performed in AE segment are totally different from nature of services in non-AE segment. But how the services are fundamentally different has not been demonstrated by the Assessing Officer. In fact, in broader context the services rendered to AE and non-AE are that of customer care and technical support. Thus, rejecting the internal TNMM on this ground is not valid as internal TNMM is the method which makes it easy to find comparable companies and reasonably determine the arm's length nature of related as well as unrelated transactions. Besides this the TPO/AO has also rejected internal TNMM on the ground that there were no audited segments maintained. But at the same time, the TPO/AO has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts the Coordinate Bench of the Delhi Tribunal passed the above order dated 12.11.2021 (supra) and the grounds raised by the assessee company in the present appeal are squarely covered by the order of Coordinate Bench of the Tribunal dated 12.11.2021 referred above. We, therefore, respectfully following the reasons for decision, direct the TPO/A.O. to adopt internal TNMM for benchmarking provision of ITeS. Accordingly, the grounds of appeal nos.4 and 5 of the assessee company are allowed. 10. Grounds of appeal Nos.6 and 7 are pertains to application of external TNMM and Related Party Transactions filter ["RPT filter"]. 11. The Ld. D.R. strongly relied on the order of the TPO/A.O. and directions of the DRP on these grounds. 12. We have hea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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