TaxTMI 
TaxTMI 
2017 (2) TMI 809
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....dependent on external factors like money, supply, inflation, Govt. policy etc. 3. The CIT(A) erred in equating business income/sales with operating revenues and thus concluding that foreign exchange gain forms part of operating revenues. 4. The CIT(A) erred in concluding that the assessee company is a risk mitigated entity without appreciating the fact the assessee company is a full fledged entrepreneur like any other comparable company selected by the TPO/AO. 5. The CIT(A) erred in rejecting Sat Investeck Ltd by stating that this company earned abnormal profits without mentioning the bench mark for profitability above which accompany can he considered as earning super profits in the software service industry in which the assessee is operating. 6. The CIT(A) erred in holding that Sat Investeck Ltd. cannot be considered as a comparable stating that this company earned abnormal profits without mentioning any peculiar economic circumstances which resulted in so called high/abnormal profits. 7. The CIT(A) erred in holding that arm's length price adjustment is to be made only after allowing +/-5%from the arithmetic mean price as per the proviso to sec. 92C(2) even when the pric....
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....foreign exchange fluctuation income cannot be excluded from the computation of operating margin of the assessee-company. Still the Bench wanted to know as to whether the said gain in that case was of the same year or in the preceding year and what is the finding of the Tribunal regarding this factual aspect and in reply, the ld. AR of the assessee submitted that these facts are not coming out from this Tribunal order. 6. Regarding ground no. 5 & 6 in respect of exclusion of one comparable company i.e. Sat Investeck Ltd, he submitted that the percentage of RPT in this case is much higher because as against the total turnover of this company of Rs. 766 Crores, the turnover with related party was about Rs. 332 lacs but since there is no finding on this aspect by any of the authorities below, the matter may be restored back to the file of the AO/TPO for fresh decision after examining this aspect and if it is found that RPT percentage of this company is more than 15%, then this comparable company has to be excluded by applying RPT filter and in that situation, no other aspect needs to be examined. 7. Regarding the remaining grounds of the revenue i.e ...... ground no. 6 to 9, he fairl....
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....ect, we set aside the order of ld. CT (A) and restore the matter back to the file of the AO/TPO to decide the issue afresh after examining the factual aspect as to what is the RPT percentage of this company. If the same is found in excess of 15% than this comparable gas to be rejected by applying RPT filter but if it is found that the RPT percentage of this company is below the acceptable limit than the said comparable should be examined afresh on other aspects. The AO/TPO should pass necessary order as per law on this issue as per above discussion after providing adequate opportunity of being heard to the assessee. Accordingly, ground no. 5 & 6 of the revenue are also allowed for statistical purposes. 10. Regarding third issue i.e. 5% standard deduction allowed by ld. CIT (A), it was fairly conceded by the ld. AR of the assessee that this issue has to be decided in favour of the revenue and against the assessee in view of subsequent amendment in the provisions of sec. 92C of the IT Act, 1961. Accordingly, we decide this issue in favour of the revenue and against the assessee and accordingly, ground no. 7 to 9 of the revenue's appeal are allowed. 11. In the result, the appeal....
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....g the TPO to consider the margin of the cross objector of 3.05% as against the margin of 4.65% computed by the cross objector". 14. The cross objection has been filed by the assessee after a day of 1760 days. The assessee has filed an application for condonation of delay along with an affidavit in which the assessee has made the following submissions in support of his request for condonation of delay as per para-9 & 10 of the affidavit, as reproduced below; "9. In this regard, your cross objector wishes to submit that the Finance Act 2012, has amended provisions of sec. 92C of the Act, by inserting sub-sections 2A and 2B. Newly inserted section 92C(2A) has explained that when the variation between the arithmetical mean referred to in the proviso to sec. 92C(2) and the price at which international transaction has actually been undertaken exceeds five percent of the arithmetical mean, then, the assessee shall not be entitled to exercise the option as referred to in the proviso, which amendment has been made with retrospective effect from April 1, 2002, Further, newly added section 92C(B) has limited the powers of the AO to assess or reassess or pass an order enhancing the assessme....
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.... of the assessee are accepted that the delay is on account of amendment in the provisions of sec. 92C in respect of allowability of standard deduction of 5%, the same may be accepted up to 30-04-2013 when the Special Bench of this Tribunal pronounced the judgment in the case of IHG IT Services (Ind.) (P.) Ltd. (supra) but for the remaining delay of 951 days from 01-05-2013, there is no valid explanation and this explanation of the assessee that this delay is attributable to the inference of provisions of Finance Act 2012 is having no merit because, when the Special Bench of this Tribunal has explained the provisions and amendments in Finance Act 2012, it cannot be said that the assessee was not aware of the provisions of its implications and hence, in our considered opinion, the delay in filing the cross objection by the assessee cannot be condoned because there is no reasonable explanation of the assessee regarding such huge delay particularly, the delay of 951 days after pronouncement of the Special Bench order of the Tribunal on 30-04-2013. Hence, we do not condone the delay and therefore, the cross objection of the assessee is liable to be dismissed as un-admitted. We order acc....