TaxTMI 
TaxTMI 
2016 (4) TMI 947
X X X X Extracts X X X X
X X X X Extracts X X X X
....T. Act, 1961 without appreciating the fact that the assessee failed to maintain the record as required U/s 92D of the I.T. Act read with rule 10D of the I.T. Rules." 2. The sole ground of the revenue's appeal is against deleting the penalty of Rs. 15,51,675/- imposed U/s 271AA of the Income Tax Act, 1961 (in short the Act). The assessee is engaged in the development and online support of software. The assessee filed its return for A.Y. 2006-07 on 17/10/2006 declaring total income of Rs. 5,56,720/-. The case was scrutinized U/s 143(3) of the Act. During the course of assessment proceedings, the ld Assessing Officer has held that the assessee had not used recent contemporary data for the purpose of benchmarking international transaction of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Officer (TPO) in para 4 has observed that the records of analysis performed to evaluate the comparability of uncontrolled transaction with the relevant international transactions was not filed. Further it has been observed that as per Annexure-5 of the T.P. study report, relating to the record of the analysis performed to evaluate comparability, the search process had been undertaking for the preceding year i.e. F.Y. 2004-05. Eighty companies had been selected as comparables by the assessee for F.Y. 2002-03, 2003-04 and 2004-05, which had been analysed. No fresh search for comparables or analysis using contemporaneous data had been made by the assessee. Thus the assessee had not complied with the provisions of (f),(g) and (h) of Rule 10D of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le companies has been narrated by the ld CIT(A) at page 10 of his order. The ld TPO did not find the necessary documents in support of the Arms Length Price (ALP) shown by the appellant. He directed the appellant to conduct search for comparables relevant to F.Y. 2005-06. The appellant did during TPO proceedings and provided nine company cases as comparables. However, these nine companies were the same companies which the appellant had used for FY 2004-05. For providing the information required by the TPO the appellant updated margins for the same companies, stating that the updates were dated 25/8/2006. The ld TPO used five companies out of nine provided by the appellant during TPO proceedings for determining the ALP. The TPO's objection w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he argument of the appellant is also not disputed by the Assessing Officer that similar service rendered to the AE during the year under consideration, which has been rendered in F.Y. 2004-05. Accordingly she deleted the penalty. 4. Now the revenue is in appeal before us. The ld DR has vehemently supported the order of the Assessing Officer. At the outset, the ld AR of the assessee has reiterated the arguments made before the ld CIT(A) and further argued that the service rendered to the AE by the assessee was same as provided in A.Y. 2004-05. The comparables were updated before due date of filing of return. The assessee had submitted nine comparables before the ld TPO out of which he used five comparables for deciding ALP of international ....