TaxTMI 
TaxTMI 
2016 (5) TMI 1080
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....red in law and on the facts of the case in determining the total income of the Appellant at Rs. 8,77,18,381/- as against a returned income of Rs. 8,47,480/-. Part 1- Transfer Pricing Grounds 3. That on facts and in law, the Ld. Assessing Officer /TPO/DRP erred in making/upholding an upward adjustment of Rs. 73,880,694/- in respect of the international transaction of the appellant pertaining to provision of IT enabled services to its Associated Enterprises ("AEs") 4. That on facts and in law, the Ld. TPO has erred in not discharging his statutory onus to establish that any of the conditions specified in clause (a) to (d) of Section 92C (3) of the Act have been satisfied before disregarding the arm's length price determined by the Appellant and proceeding to determine the arm's length price himself. 5. The Learned AO/TPO/DRP have erred by not accepting the economic analysis undertaken by the Appellant in accordance with the provisions of the Act read with the Income Tax Rules, 1962 ("the Rules") and conducting a fresh economic analysis for the determination of Arm's Length Price ("ALP") of the Appellant's international transaction and holding that the international transa....
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....on under the proviso to Section 92C of the Act. Part II- Corporate Tax Grounds 15. That on facts and in law, the Learned DRP/Assessing Officer erred in holding that the interest income of Rs. 1,30,23,015/- eared in short term deposits made out of surplus funds from export activities of the Appellant, be treated as "Income from Other Sources" and not business income. 16. That on facts and in law, the Learned Assessing Officer /DRP has erred in holding that such interest income earned on short term deposits is not eligible for deduction under Section 10A of the Act. 17. That on facts and in law, the Learned Assessing Officer has erred in initiating penalty under section 271 (1) (c) of the Act, as consequences of the additions made in the assessment order passed under section 143(3) read with Section 144C of the Act. 18. That on facts and in law, the Learned Assessing Officer has erred in charging interest under section 234B and 234C of the Act, as consequences of the additions made in the assessment order passed u/s 143(3) read with Section 144C of the Act. 3. Ground No. 1 and 2 of the assessee's appeal are general in nature and not pressed by the assessee hence acc....
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.... Assessing Officer vide order dated 27.01.2014 has made an addition of Rs. 7,38,90,694/- under Section 92CA of the Income Tax Act, 1961. The Assessing Officer further made an addition of Rs. 1,30,23,015/- as interest on FDRs as Income from other sources as after verification the Assessing Officer found that the interest of Rs. 1,30,23,015/- is included in the business income. As relates to excess payment under Section 40A(2)(b) read with Section 92CA of the Income Tax Act, 1961, the Assessing Officer held that since the DRP directed the Assessing Officer to drop the proposed disallowance for the reasons stated in the order of the DRP and did not add the same. 11. The AR submitted that the comparable Cosmic Global Ltd. should have been excluded by the TPO as the same is engaged in outsourcing activity. Vishal Information Technologies (Coral Hub) was rejected as comparable on similar line (outsourcing activity) by DRP. Segmental revenue of BPO segment is very low. The AR further submitted that there should be inclusion of R systems as the same cannot be rejected only for having a different financial year ending, it can be seen from the audited accounts of the company that audited ....
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....ional Ltd., Allsec Technologies Ltd. and C G VAK Software & Exports Ltd. The AR submitted that in many cases these three inclusions stated herein above were held as proper comparables and held the same by the various High Courts as well as this very Tribunal. As relates to corporate tax ground, the AR submitted that during the year under consideration, the assessee placed its unutilized funds in short term fixed deposits with banks in order to effectively manage the working capital requirements of its business. Such funds were placed with banks in form of short term fixed deposit instruments yielding interest income so as to better manage the unutilized funds which can be deployed in the business on liquid basis. The interest income earned by XL India during the year under consideration has been classified as business income since the source of such term deposits is inextricably linked to the business of the assessee. Hence such interest income was considered as profit of the business of the undertaking eligible for deduction under section 10A of the Income Tax Act, 1961. In respect of this the assessee cited case of ABB Global Industries and Services Ltd passed by ITAT, Bangalore ....