TaxTMI 
TaxTMI 
2014 (1) TMI 892
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....bsp; "1. The ld. Assessing Officer ('AO') pursuant to the directions of the ld. Dispute Resolution Panel ('DRP') erred in rejecting the benchmarking approach adopted by the appellant and thereby making a transfer pricing adjustment of Rs,1,72,95,113/- to the income of the appellant by holding that the international transaction of provision of software development services of the appellant does not satisfy the arm's length principle envisaged under the Income Tax Act, 1961 ('the Act'). 2. On the facts and in the circumstances of the case, the ld. AO/DRP erred in modifying the set of comparable companies identified by the appellant in its Transfer Pricing Study Report for provision of software development....
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....ormation of the comparables for the previous year 2007-08 which was available in the public domain at the time of assessment proceedings but not at the time when the appellant conducted its analysis to comply with the provisions of Rules 10B(4) and 10D(4) of the Rules. 5. On the facts and circumstances of the case and in law, the ld. AO ought to have considered the fact that the appellant provided all the information requested during the assessment proceedings and has neither concealed any income nor furnished any inaccurate particulars of its income. Therefore, the ld. AO has erred in initiating the penalty proceedings under section 271(1)(c) of the Act." 3. The short issue that we are required is whether or not ....
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....hen asked whether all the comparables selected by the Transfer Pricing Officer have been subjected to the same test of rigorous scrutiny as these two comparables selected by the TPO, learned counsel fairly accepted that the assessee has not done so. He frankly stated that as long as assessee has no grievance with the comparables selected by the TPO there was no need to examine the appropriateness of comparables. We also asked learned counsel for the assessee to step wise process whereby assessee's comparables were selected, and asked him to take us through the screenshots of various stages in narrowing down the results found in the database to the comparables eventually selected. Learned counsel took us through the transfer pricing study. ....
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....sentative, however, did not oppose the prayer to remit the matter to the file of the Assessing Officer. 6. Having heard the rival contentions, and having perused the material on record we find that the matter indeed deserves to be remitted to the file of the Assessing Officer so that both the above aspects, which are very crucial to determination of correctness of arm's length price in this case, can be reexamined by the Assessing Officer in the light of appropriate clarifications of the assessee. We have noted that at page 259 and 260 of the paper-book the assessee has set out various objective tests employed in narrowing down universe of 18,249 comparables available in the Prowess database to 463 comparables. However, the qualitative ana....