TaxTMI 
TaxTMI 
2017 (5) TMI 777
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....tion under Section 10A of the Act in relation to profits of the Appellant's STP undertaking m Bangalore. (b) That the authorities mentioned above erred in relying upon the assessment orders pertaining to different assessment years which are pending adjudication before the Hon'ble Income Tax Appellate Tribunal. 3. That the learned CIT(A) erred in confirming the order of learned AO in setting off the brought forward business loss amounting to Rs. 4,873,401 and unabsorbed depreciation loss amounting to Rs. 32,432 pertaining to AY 1999-00 before computing deduction under section 10A of the Act in relation to the Appellant's STP undertaking in Mumbai. 4. On the facts and in the circumstances of the case the learned CIT(A) erred in making adjustment to the transfer price of the Appellant by Rs. 9,167,881/-. 5. That the learned Additional Director of Income Tax (Transfer Pricing - I), Bangalore ('Transfer Pricing Officer' or 'TPO') and the learned CIT(A) erred in not allowing the benefit of range of +/- 5% as provided in proviso to Section 92C(2) of the Act, while determining the arm's length price. 6. On the facts and circumstances of the ca....
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....41% being the average of the profit margin of 17.5% as determined by the MAP authorities in respect of the international transactions with the US companies and 25.32% adopted by the TPO/AO, without any basis." 2. Ground Nos. 4 to 10 in the assessee's appeal and ground Nos.4 & 5 of revenue's appeal relate to the TP issues and in this regard the ld. Counsel for the assessee has invited our attention to the fact that during the pendency of the appeal before the CIT(Appeals), the assessee's AE in USA approached the competent authority in USA for resolution of the TP adjustment issue insofar as it related to Software Development (SWD) provided by the assessee to its AE located in USA through Mutual Agreement Procedure (MAP) prescribed under Indo-US Double Taxation Avoidance Agreement (DTAA). Thereafter, the competent authority of India & USA issued a MAP resolution dated 21.05.2010 resolving that the TP adjustment issue arising in the appeal and shortly thereafter the terms thereof were accepted by the assessee. This fact was brought to the notice of CIT(Appeals) by the assessee during the proceedings before him and the assessee accordingly withdrew its appeal before the CIT(Appeals)....
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....also. The ld. Counsel further placed reliance upon the judgment of the Tribunal in the case of J P Morgan Services (P.) Ltd. V. DCIT (2016) 70 taxmann.com 228 (Mumbai - Trib.) in support of his contentions that once the assessee has gone in MAP with respect to maximum international transactions, the ALP determined therein be applied to other transactions of AEs of different countries. 7. The ld. DR, on the other hand, has opposed the contentions of the assessee with the submission that determination of ALP depends upon different facts and not on the determination of ALP in one transaction. 8. Having carefully examined the orders of authorities below in the light of rival submissions, we find that the TPO has not determined the ALP of different transactions undertaken with different AEs of different countries. He has taken the ALP of all transactions undertaken by the assessee with its AEs of different countries. Undisputedly, the dispute with regard to international transactions with its AEs of USA & Canada was resolved through MAP and ALP was determined at 117.5%. The international transactions with its AEs in USA & Canada are the maximum and the international transactions w....
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....lia International PTY Limited Level 16, 400 George Street, Sydney, NSW 2000. Australia Export of Software development and maintenance services 715.033 9. We have also carefully examined the order of Tribunal in the case of J P Morgan Services (P.) Ltd. V. DCIT (supra) in which the Tribunal has held that whatever margin has been applied through MAP with respect to major international transactions, the same should be applied for the remaining transactions. The relevant observations of the Tribunal is extracted hereunder for the sake of reference:- "3.2. During the course of hearing, it has been submitted that the assessee company is providing IT Enabled Services to its AE's. The assessee had shown a margin of 12.26%. The AO held and treated ITES business as 'one', and applied mark-up @ 21.58%. It is further submitted that out of the total transactions done by the AE's world over, around 96 transactions were done with the entities based in USA and remaining 4% of the transactions done with other AE's located elsewhere. The lower authorities did not make any distinction while applying mark-up and the entire turnover was treated as 'one' and accordingly m....
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....0/13/2010- FTD-1 has been issued in the case of the assessee company under MAP proceedings for A.Y.2006-07 to 2010-111 by the DCIT(OSD), APA-I on behalf of the Foreign Tax and Tax Research Division -I, Central Board of Direct Taxes, New Delhi wherein it has been confirmed that for A.Y.2006-07, for US related transactions, the margin has been determined at 14.38% as against margin of 21.58%, as was determined by the Transfer pricing officer (TPO). It has been further clarified by way of note in the said letter that apportionment between 'US' and 'non-US' ALP and TP adjustment had been margined out by the APA section (of FT and TR Division) on the basis of 'US' and 'non- US' revenue. It is further noted from the perusal of the annual accounts of the assessee company that aggregate turnover has been shown at Rs. 47,30,521/-, and no distinction has been made between the 'US' and 'non-US' transactions. Similarly in the orders passed by the lower authorities also no such distinction as ever been made by any of the authorities. Under these circumstances, in our considered view, whatever margin has been determined for the 96% of the transactions, same margin should be determined for the re....
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....ry in a subsequent year, even then the assessee will not be entitled to claim exemption u/s. 10B of the IT Act, 1961. The requirement of Sec.10A and 10B are similar and therefore, in view of this categorical finding of the ld. CIT(A) that in the initial year, the percentage of old and used plant and machinery was more than 20%, the assessee is not eligible for deduction u/s. 10A of the Act, in the initial year as well as in subsequent years. Therefore, we find no reason to interfere with the order of the ld. CIT(A) on this issue in any of these two years which are before us by respectfully following the judgment of the Hon'ble Karnataka High Court rendered in the case of Sami Labs Ltd. (Supra). Hence, we decline to interfere with the order of the ld. CIT(A) on this issue. 9. In ITA No.869(Mum)/2006, although some other grounds are also raised as per grounds of appeal reproduced above but no argument was advanced by the ld. AR of the assessee on any of these grounds and hence, we infer that the learned AR of the assessee has nothing to say on these grounds. In the absence of any contention of the learned AR of the assessee, we find no reason to interfere in the order of the CIT(A....