Appeal partly allowed, directions for ALP recomputation, verification of evidence, reassessment of expenses. Errors in TPO's approach identified.

The Tribunal partly allowed the appeal by directing the Assessing Officer to recompute the Arm's Length Price (ALP), verify additional evidence for the addition under Section 69, and reassess the disallowance of advertisement and IT expenses. The disallowance of the employee's contribution to the provident fund was upheld. The Tribunal found errors in the Transfer Pricing Officer's approach, directing the exclusion of companies with turnovers exceeding Rs. 200 crores and remitting the comparability of certain companies for fresh consideration. The issue of non-compliance with Section 144B was not explicitly addressed in the judgment.

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Issues Involved:
1. Non-compliance of section 144B.
2. Transfer Pricing adjustment of Rs. 45,08,087/-.
3. Addition of Rs. 96,23,15,500/- under Section 69 of the Act.
4. Disallowance of Rs. 2,14,87,266/- (20% of expenses claimed under Advertisement Payments and Information Technology expense).
5. Addition of Rs. 64,800/- being employee's contribution to provident fund deposited after the due date.

Detailed Analysis:

Non-compliance of Section 144B:
The Tribunal did not explicitly address the issue of non-compliance with section 144B in the provided judgment.

Transfer Pricing Adjustment:
The assessee challenged the transfer pricing adjustment of Rs. 45,08,087/-. The Tribunal examined the comparables used by both the assessee and the Transfer Pricing Officer (TPO). The Tribunal noted that the TPO had rejected several comparables selected by the assessee and included others. The Tribunal found that the TPO erred in not applying an upper turnover filter, which is crucial for comparability. The Tribunal directed the exclusion of companies with turnovers exceeding Rs. 200 crores, following the decision in Autodesk India (P) Ltd. v. DCIT. The Tribunal also included Isummations Technologies Ltd. as a comparable, as it met the export turnover filter and had a positive net worth. However, the comparability of Yudiz Solutions Pvt. Ltd. was remitted back to the TPO/AO for fresh consideration.

Addition under Section 69:
The AO had added Rs. 96,23,15,500/- as undisclosed income under Section 69 due to discrepancies between Form 26AS and the balance sheet. The assessee argued that the discrepancy was due to automatic renewal of fixed deposits, leading to double counting in Form 26AS. The Tribunal admitted additional evidence, including bank confirmations and reconciliations, and remitted the issue back to the AO for proper verification.

Disallowance of Advertisement and IT Expenses:
The AO disallowed 20% of the advertisement and IT expenses, amounting to Rs. 2,14,87,266/-, due to lack of supporting details. The Tribunal noted that the assessee had submitted relevant details in the Paper Book, which were not examined by the lower authorities. The issue was remitted back to the AO for verification of the details and evidences.

Addition of Employee's Contribution to Provident Fund:
The AO disallowed Rs. 64,800/- being employee's contribution to provident fund remitted after the due date prescribed under the relevant statute. The Tribunal upheld the disallowance, citing the Supreme Court's decision in Checkmate Services (P.) Ltd. Vs CIT-1, which held that employees' contributions must be deposited within the due date specified under the relevant welfare legislation.

Conclusion:
The Tribunal partly allowed the appeal, directing the AO to recompute the ALP, verify the additional evidence for the addition under Section 69, and reassess the disallowance of advertisement and IT expenses. The disallowance of the employee's contribution to the provident fund was upheld.

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