TaxTMI 
TaxTMI 
2012 (10) TMI 897
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....to dispose them of by this common order. 2. First, we take the appeal of the assessee in assessment year 2006-07. The brief facts of the case are that the assessee company is engaged in the business of software marketing and support services. It has filed its return of income on 29.11.2006 declaring an income of Rs. 62,49,160. It was accepted under section 143(1) on 31.10.2007. However, subsequently, the case of the assessee was selected for scrutiny assessment and a notice under section 143(2) dated 10.10.2007 was issued and served upon the assessee. Assessing Officer had thereafter issued notice under sec. 142(1) of the Act. On scrutiny of accounts, it revealed to the Assessing Officer that the assessee is a subsidiary of Concerto Inc. U....
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....2CA(3) for computing the Arm's Length Price of the International transactions. The TPO has given detailed reasons for considering the current year data of comparables. The reasoning of applying various filters has been discussed in detail. The TPO has observed that the claim of assessee for the ad hoc adjustment on account of risk cannot be accepted because the assessee could not exhibit difference in its own risk matrix and that of comparables, which require risk adjustments. The TPO has therefore computed the OP/TC of the assessee company at 28.82% after computing the average OP/TC of the two comparables. The upward adjustment of Rs. 92,63,786 on the International Transactions, as computed by the TPO and Assessing Officer is quite reasona....
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....extracted supra about the objections of the assessee, thus, the order of the learned D.R.P. cannot be termed as a speaking order. The assessee has submitted objections running into many pages but learned D.R.P. has just summarize the issue in paragraph No. 2.3 in few lines. In other paragraphs, learned D.R.P. has just noticed the facts of the case. Thus, in our opinion, the order of the learned D.R.P. deserves to be set aside. 5. In view of the above discussion, appeal of the assessee for assessment year 2006-07 is allowed for statistical purposes and all the issues are restored to the file of the learned D.R.P. for fresh adjudication. It is needless to say that the observations made by us will not impair or injure the case of A.O. or woul....
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....no reduction in the expenditure. Before adverting to the explanation of the assessee, we deem it appropriate to take note of the revenue recognized by the assessee in assessment years 2004-05, 2005-06 and the various expenses debited in the P & L account as well as the amounts disallowed by the Assessing Officer. Such details have been placed before us in a tabular form by the learned counsel for the assessee. They read as under: INCOME A.Y. 2004-05 AMOUNT (RS) A.Y. 2005-06 AMOUNT (RS) Commission earned on sale of software 32,486,157 29,015,048 Rendering of support services 20,414,808 23,969,395 Maintenance revenue 35,330,743 Nil Total income 88,231,709 52,984,443 Expenses A.Y. 2004-05 (A) A.Y. 25005-06....
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.... services. Thus, there is no justification for increase in the number of employees when the operations of the company are being curtailed. The Assessing Officer confronted the assessee to explain the situation, the reply was to be filed up to 26.12.2008. Assessing Officer has observed that no reply was filed and accordingly he disallowed a sum of Rs.1,14,51,811 out of the various expenses. 9. Appeal to the learned CIT (Appeals) did not bring any relief to the assessee. 10. With the assistance of learned representatives, we have gone through the record carefully. The explanation of the assessee is that no payments were made to the persons who are specified under section 40A(2)(b) of the Act. Assessing Officer nowhere conclusively held that....