TaxTMI 
TaxTMI 
2014 (10) TMI 213
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....elopment services. The assessee filed its return of income on 25-09-2008 disclosing total income at Rs. 1,65,88,178/-. The assessee during the impugned assessment year has entered into international transaction with Associate Enterprises (AEs) at Rs. 17,78,87,505/- the details of which are as under : Sr.No. Associated Enterprises Nature of International Transaction Amount in Rs. Method adopted 1 Bitwise, Inc, USA Provision of software services 17,74,35,971 TNMM 2 Bitwise, Inc, USA Reimbursement of expenses 4,51,534 CUP TOTAL 17,78,87,505 2.1 The Assessing Officer made a reference u/s.92CA(1) of the I.T. Act to the TPO for determination of the ALP. During the transfer pricing assessment proceedings, the T....
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.... selected by the assessee was highly subjective and designed to manipulate a set of comparables with a comfortable profit margin. He noted that the 6 companies selected by the assessee are unsuitable as comparables. He noted that in some cases assessee has omitted companies which were found to be suitable comparable after proper FAR analysis. 2.3 According to the TPO as per Rule 10B(4) it is mandatory to use the current year data, i.e. the data for F.Y. 2007-08. However, the assessee in its TP study report has not adopted the current year data on the ground that the same was not available. According to the TPO, as per the proviso to Rule 10B(4), earlier 2 years data can also be used when it is shown that such earlier year data has an inf....
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....nologies Ltd., it was found to be comparable. The TPO therefore accepted the same. However, the assessee did not object for rejection of the other companies selected earlier and reported in the TP report. The TPO, therefore, rejected those companies as comparables. 3. On being asked by the TPO, the assessee submitted a set of 35 fresh comparables after re-visiting the prowess database and fetched comparables based on the revised process. The assessee objected to the additional comparables proposed by the TPO in the show cause notice. The assessee rejected many comparable companies on the ground of turnover and non-availability of data. The TPO on examination of the comparables found that the turnover limit applied by the assessee was hig....
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.... 20,95,29,408 5% range on lower side ( the assessee's transaction falls outside the range) 19,90,52,937 Adjustment over operating income [A-B] (Shortfall being adjustment u/s 92CA) 3,20,93,437 4. The Assessing Officer passed the draft assessment order proposing the above adjustment which was challenged by the assessee before the DRP. However, the DRP rejected the various contentions raised by the assessee and upheld the action of the TPO. The DRP, however, directed the Assessing Officer to re-compute the correct OP/TC in the case of KALS Information systems Ltd. holding that the same is functionally comparable. Similarly, the DRP directed the Assessing Officer/TPO to allow working capital adjustment after verif....
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....between the appellant and it's USA AE), though raised specifically by the appellant before the TPO and before the DRP. 6. The TPO, AO & DRP erred in law and on facts in not granting benefit of proviso to section 92C (2) of the ITA, 1961 though specifically requested during the course of hearing. 7. The learned AO erred on facts in not giving effect to the Taxes paid / TDS amounting to Rs. 58,06,211 while deciding the final tax liability(Claimed Rs. 58,11,483/ - allowed Rs. 5,272). 8. The appellant craves leaves to add, modify, alter, amend, or withdraw all or any of the Grounds of Appeal herein and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing". 6. We ha....
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....Technology Ltd. as a good comparable. He submitted that the turnover of this comparable is Rs. 213 Crores, i.e. above Rs. 200 crores. Therefore, the said party should not have been considered as a comparable. For the above proposition he relied on various decisions. He submitted that although these were brought to the notice of the DRP, however, the DRP rejected the same on the ground that total cost of activity of Helios was less than Rs. 200 crores. 6.1 So far as treating KALS as comparable he submitted that the TPO/DRP have selected the said company as a comparable on the ground that the said party is functionally similar, i.e. not involved in software product development. Referring to various decisions of the Tribunal he submitted th....