TaxTMI 
TaxTMI 
2015 (6) TMI 349
X X X X Extracts X X X X
X X X X Extracts X X X X
....rounds pertaining to transfer pricing adjustments: "1. The final order issued by the Learned Deputy Commissioner of Income-tax, Circle 1 (1) ['Ld. AO'] dated 03 December 2013 under section 143(3) read with section 144C of the Income-tax Act, 1961 ('the Act') is bad in law. 2. On the facts and in the circumstances of the case and in law, the Hon'ble Dispute Resolution Panel ('DRP') erred in upholding the action of the Learned Transfer Pricing Officer ('Ld.TPO')/Ld.AO in making a transfer pricing adjustment/addition of Rs. 17,88,20,166/- under section 92CA(3) of the Act. 2.1 That on the facts and circumstances of the case and in law, the Hon'ble DRP/Ld. TPO/Ld. AO erred in not undertaking an in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at 'Nil' ALP for reimbursement of expenses. 2.6 The Hon'ble DRP, while rejecting the submissions made by the Appellant, have erred in not following the decisions of the Hon'ble Jurisdictional Income Tax Appellate Tribunal laying down the jurisdictional power of a TPO under section 92CA of the Act. 3 On the facts and in the circumstances of the case and in law, the Ld.TPO erred in arriving at Rs. 12,12,82,509/- as an alternate TP adjustment to the international transaction of providing Information Technology/software development ('IT') service! to its AE should the primary TP adjustment is deleted/ruled in favour of the Appellant by the higher Appellate authorities. 3.1 The Ld. TPO erred on facts and in law i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....osing total taxable income of Rs. 96,35,115/. Since assessee has international transactions with its Associated Enterprises [AE], the matter was referred to the Transfer Pricing Officer [TPO], who passed an order u/s.92CA(3) of the Act on 29-01-2013, recommending adjustment of Rs. 17,88,20,166/-. The same was incorporated by the Assessing Officer in the draft assessment order. Assessee preferred a petition before the DRP raising various objections. The DRP while upholding the adjustment of Rs. 17,88,20,166/-, however, gave some relief with reference with objections relating to claim of Section 10A. Assessee is aggrieved and raised three grounds with various sub-grounds. 4. We have heard the Ld.Counsel and Ld.DR in detail and considered n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee has used Transaction Net Margin Method [TNMM] as the most appropriate method with a profit level indicator of operating profit by operating cost. As per the TP study, assessee earned margin of 11.78% under TNMM and assessee's selected comparables arithmetical mean was determined at 12.66%. Since the margin earned by assessee is within the reasonable range, no addition was considered u/s.92CA of the Act. TPO conducted a fresh search, rejected 11 out of 17 comparable companies identified by assessee and selected 17 new companies thereby taking 23 companies in all for comparison and arrived at arm's length margin at 23.79% and proposed to make a transfer pricing adjustment amounting to Rs. 11,43,67,597/-. Since assessee made object....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was for the benefit derived by the company and is not a case of payment of extra profit/cash to the AE. Vide that order, the ITAT has indeed allowed the software expenses and reimbursement of expenses, therefore, the disallowance per se of Rs. 17,88,20,166/- as services not provided and ALP at NIL does not stand. Therefore, ground No.2 raised before us on the issue of disallowance of entire reimbursement of expenditure is to be held in favour of assessee. 9. However, we notice from the orders of the authorities and from the order of ITAT that for the Financial Year 2008-09 i.e., relevant for AY.2009-10 before us, the order of the ITAT indicate the software expenses at NIL and engineering expenses at Rs. 10,76,77,131/-. However, the order....