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ITAT held that the Pr.CIT had wrongly assumed jurisdiction u/s 263 to revise the assessment framed u/s 143(3) r/w s.144B. The assessee, engaged in software development and ITES, billed its entire services to AEs on a cost-plus 14.5% basis, with the disputed repairs and maintenance expenditure, including computer peripherals, forming part of operating cost recovered from AEs with markup. As the Revenue had not drawn any adverse inference on the transfer pricing study and the entire expenditure was effectively reimbursed with profit, the assessment order was neither erroneous nor prejudicial to the interests of the Revenue. Consequently, the s.263 revision order was quashed and the assessee's appeal allowed.
ITAT held that the Pr.CIT had wrongly assumed jurisdiction u/s 263 to revise the assessment framed u/s 143(3) r/w s.144B. The assessee, engaged in software development and ITES, billed its entire services to AEs on a cost-plus 14.5% basis, with the disputed repairs and maintenance expenditure, including computer peripherals, forming part of operating cost recovered from AEs with markup. As the Revenue had not drawn any adverse inference on the transfer pricing study and the entire expenditure was effectively reimbursed with profit, the assessment order was neither erroneous nor prejudicial to the interests of the Revenue. Consequently, the s.263 revision order was quashed and the assessee's appeal allowed.
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