Transfer pricing comparables and operating income principles applied to software development services, with exclusions, inclusions, and tax credit ver...
Transfer pricing on performance guarantees and overdue receivables deleted where warranty obligations were embedded and working capital adjustment alr...
The ITAT upheld rejection of the assessee's books of account under section 145(3) because verifiable labour records, third-party confirmations, project-wise details and reconciliations were not produced, and major expenses rested on self-made vouchers with no credible support. Once the accounts were rejected, profit had to be estimated on a fair and reasonable basis, but the Tribunal found the Assessing Officer's 8% rate excessive because it relied on non-comparable listed companies and a section 44AD benchmark that could not be mechanically applied beyond the prescribed turnover limit. Considering the nature of the sub-contract business, remote working conditions and defects in the records, profit was estimated at 5% of turnover.
The ITAT upheld rejection of the assessee's books of account under section 145(3) because verifiable labour records, third-party confirmations, project-wise details and reconciliations were not produced, and major expenses rested on self-made vouchers with no credible support. Once the accounts were rejected, profit had to be estimated on a fair and reasonable basis, but the Tribunal found the Assessing Officer's 8% rate excessive because it relied on non-comparable listed companies and a section 44AD benchmark that could not be mechanically applied beyond the prescribed turnover limit. Considering the nature of the sub-contract business, remote working conditions and defects in the records, profit was estimated at 5% of turnover.
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