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TMI Blog2024 (10) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... Act"). The Apex Court answered the issue by observing that within the parameters of Section 260A of the Act in an appeal challenging the determination of the ALP, it is always open for the High Court to examine in each case whether while determining the ALP, the guide-lines laid down under the Act and the Rules are followed or not and whether the determination of the ALP and the findings recorded by the Tribunal while determining the ALP are perverse or not. 3 Shri Suresh Kumar submitted that in the light of the above observations made by the Apex Court, we should examine afresh in each and every case whether the guide-lines laid down under the Act and Rules are followed while determining the ALP by the Tribunal or not and whether the findings are perverse or not. 4. We agree with Mr. Pardiwalla that in the case at hand while passing the order dated 14th January 2019, this Court has not refused to scrutinise the Tribunal's findings on the ALP. This Court has considered the matter on merits and came to the conclusion that no substantial questions of law arise. The crisp order dated 14th January 2019 reads as under: "This Appeal under Section 260A of the Income Tax Act, 1961 (the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny ICRA Online and ignoring the comparable company even though separate profitability of the respective segment is available on the record?" 3 Re Question (a):- (i) In the subject Assessment Year, the Respondent had incurred an expenditure of Rs. 33.17 lakhs for increasing its share capital. The Respondent claimed deduction under Section 35D of the Act, in its return of income with regard to the above expenditure. The Assessing Officer disallowed the claim of deduction under Section 35D of the Act and the same has been accepted by the Respondent. However, notwithstanding the above, the Assessing Officer in his draft Assessment Order held that the above expenditure of Rs. 33.17 lakhs is to be disallowed under Section 14A of the Act. (ii) The Respondent filed its objections to the Dispute Resolution Panel (DRP). In its objections, the Petitioner objected to disallowance of Rs. 33.17 lakhs under Section 14A of the Act, as it has already rejected the deduction under Section 35D of the Act. However, the same was not accepted by the DRP and the objection was rejected. (iii) Consequent to the above DRP order, the Assessing Officer passed a final Assessment Order. Being aggrieved, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2C of the Act is called for to determine the ALP of its transactions with its AE's. The Transfer Pricing Officer (TPO) accepted the TNM Method , as the most appropriate method to determine the ALP of the transactions entered into between the Respondent and its AE. However, the TPO redetermined the ALP after excluding certain entities selected as comparables and including others as comparables. The above view of the TPO was also accepted by the DRP. However, the same was challenged before the Tribunal, leading to the impugned order dated 10th October, 2014. Before examining the Revenue's challenge to the impugned order, we would reiterate our view in CIT v/s. Barclays Technology Centre India Pvt. Ltd., 409 ITR 138 wherein, we observed as under: "However, before closing, we would like to record the fact that we find that the Revenue is regularly filing appeals from the orders of the Tribunal in respect of Transfer Pricing particularly with regard to exclusion and inclusion of certain companies as comparables to determine ALP of tested parties. These appeals are being filed in a ritualistic manner. This results in the orders of the Tribunal which are essentially findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a persistent a loss making company, cannot be disregarded as comparable merely because it incurred loss in the previous year relevant to subject Assessment Year.(iii) The objection of the Revenue before us is not on the above finding of the Tribunal but it is urged that M/s. VJIL is not comparable as the Respondent Company was working on cost + method unlike the comparable i.e. M/s. VJIL. However, this is a submission which has not been made before the Tribunal and is being raised before us for first time. Therefore, a new basis for excluding M/s. VJIL as a comparable before this Court cannot be urged as it is a new case. (iv) The view taken by the Tribunal to include M/s. VJIL as a comparable on the ground that it is not a persistent loss making company, is not shown to be perverse. Thus, no interference is warranted. Thus, the proposed question is not entertained. 7 Re Question (d): (i) The authorities under the Act i.e. TPO as well as the DRP had excluded M/s. FCS Software Solutions Ltd., from the list of comparables. This on the ground that activities engaged by the comparable was research and development to create software. Thus, not comparable with the activity of Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had contended that it cannot be included but the same did not find favour with the DRP. (ii) On appeal, the impugned order of the Tribunal on facts found that the revenue derived from exports of software was just 2.21% of its total revenue while Respondent derived 100% of its revenue for export of software. Thus, the filter which was adopted by the TPO of excluding companies having less then 25% of its earnings from export was adopted by the Tribunal. This resulted in M/s. Transworld India Ltd., being excluded from the list of comparables. (iii) The Revenue has not been able to show why the above finding of the Tribunal is bad. Thus, the proposed question does not give rise to any substantial question of law. Thus, not entertained. 10 Re Question (g):- (i) The TPO had included KALS Information Solutions Ltd., (KALS) and M/s. Helios & Matherson Information Technology Ltd., (M/s. Helios & Matherson) amongst the list of comparables. The Respondent contended that both should be excluded, but without success before the TPO and the DRP. The impugned order of the Tribunal allowed the Respondent's appeal by inter alia, relying on the decision of its Coordinate Bench PTC Softwar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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