Tax appeals allow corrections to TDS and FTC claims, revise ALP for SWD and ITES, leading to deletion of TP adjustments.

The appeals were partly allowed, directing the Assessing Officer (AO) to verify and correct the Tax Deducted at Source (TDS) and Foreign Tax Credit (FTC) claims. Adjustments were made to the Arm's Length Price (ALP) determinations for Software Development Services (SWD) and Information Technology Enabled Services (ITES) for the relevant assessment years based on a revised list of comparables, ultimately leading to the deletion of the Transfer Pricing (TP) adjustments.

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Issues Involved:
1. Determination of Arm's Length Price (ALP) for Software Development Services (SWD) and Information Technology Enabled Services (ITES) for AY 2010-11.
2. Determination of ALP for SWD and ITES for AY 2012-13.
3. Credit for Taxes Deducted at Source (TDS) for AY 2010-11.
4. Foreign Tax Credit (FTC) for AY 2012-13.

Detailed Analysis:

1. Determination of Arm's Length Price (ALP) for SWD and ITES for AY 2010-11:
The primary issue revolves around the determination of the ALP for the international transaction of rendering SWD and ITES by the assessee to its holding company in the Netherlands. The Transaction Net Margin Method (TNMM) was accepted as the Most Appropriate Method (MAM) for determining ALP. The profit level indicator used was Operating Profit/Total Cost (OP/TC). The TPO accepted some comparables suggested by the assessee and added others. The final list included ten comparables, leading to an ALP adjustment. The assessee contested the inclusion of five comparables, and the Tribunal, following previous decisions, excluded these comparables. The revised arithmetic mean of the remaining comparables showed that the assessee's pricing was at arm's length, leading to the deletion of the TP adjustment.

2. Determination of ALP for SWD and ITES for AY 2012-13:
Similar to AY 2010-11, the TNMM was used for determining the ALP for SWD and ITES for AY 2012-13. The TPO selected ten comparables, leading to an ALP adjustment. The DRP directed the exclusion of some comparables and the inclusion of others. The Tribunal, following previous decisions, excluded certain comparables and included others based on functional similarity. The remaining comparables' arithmetic mean indicated that the assessee's pricing was at arm's length, leading to the deletion of the TP adjustment.

3. Credit for Taxes Deducted at Source (TDS) for AY 2010-11:
The assessee claimed a TDS credit of Rs. 1,18,40,477, but the AO allowed only Rs. 92,81,177. The DRP directed the AO to verify and allow the correct TDS credit. The Tribunal directed the AO to grant the entire TDS credit after due verification.

4. Foreign Tax Credit (FTC) for AY 2012-13:
The assessee claimed FTC of Rs. 13,94,950, but the AO allowed only Rs. 9,83,255 without explanation. The DRP refused to interfere, stating it was beyond their scope. The Tribunal directed the AO to verify the claim and allow the FTC in accordance with the law.

Conclusion:
Both appeals were partly allowed, with directions for the AO to verify and correct the TDS and FTC claims, and adjustments to the ALP determinations based on the revised comparables list.

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