AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (11) TMI 716
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.... the Transfer Pricing (TP) adjustments made particularly about functionality, selection of comparable companies, working capital adjustment, various filters adopted, provisions disallowed and also risk adjustments. Ground No. 10 pertain to charging of interest u/s. 234B & 234C of the Act. 3. At the outset, it was submitted that the DRP has not condoned the delay in filing the objections petition as it was filed belatedly and consequently, the order passed by the AO, wherein the DRP has not given any directions for completion of assessment in a particular manner is not correct. 4. Initially, Ld. Counsel relied on the Co-ordinate Bench decision in the case of M/s. Planet Online Private Limited Vs. ACIT in ITA No. 519/Hyd/2015 dt. 04-09-2015 [65 taxmann.com 46 (Hyderabad-Trib)]. However, it has been brought to the notice of the Bench that assessee has filed a letter with the AO that he has filed objections before the DRP on 05-04-2016 i.e., within the period by which final assessment order was to be passed. Therefore, the decision relied upon is not directly applicable to the facts of the case. Accordingly, the case was re-fixed for fresh hearing and case was heard in detail. ....
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.... charged a notional interest on receivables at 14.75%. Accordingly, the TPO made a TP adjustment of Rs. 3,17,55,047/-. 4.3. The AO completed the draft assessment order on 19th February, 2016 and the assessee was supposed to file the objections within thirty days i.e., on or before 23-03-2016. It seems that assessee has couriered the objections in Form 35A to an address in Nrupatunga Road on 05-04-2016 along with a letter dt. 30-03-2016 seeking condonation of delay of thirteen days in filing the objections before the DRP. However, the same was returned as it was found that it was an invalid address and it was stated to have been resent to HMT Bhavan, Bellary Road on 19th April 2016 and the documents remained un-delivered and finally the grounds of objections were filed before the DRP on 2nd May, 2016. Assessee has pleaded for condonation of the original thirteen days delay as well as further delay due to postal rejection of the couriered letter. The DRP, however, did not condone the delay and rejected the objections filed by assessee vide its directions dt. 8th November 2016. The AO passed final assessment order dt. 30-12- 2016 and determined the total adjustment at Rs. 3,17,55,0....
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....vate Limited Vs. ACIT (supra). 7.1. The Hon'ble Madras High Court in the case of M/s. Inno Estates Private Limited (supra) has considered similar facts as that of assessee and upheld the final order passed by the AO. The judgement of the Hon'ble Court is as under: "9. It is not in dispute that the petitioner has filed their objection before the 1st respondent only on 29.04.2016 by specifically indicating as though the draft order of assessment was served on them only on 31.03.2016. Thus, it is evident that the petitioner made the 1st respondent to believe that the objections were filed in time. However, when it was pointed out by the 2nd respondent to the 1st respondent, through communication dated 25.07.2016, that the draft assessment order was served on the assessee on 29.03.2016 itself, the petitioner filed an affidavit before the 1st respondent on 07.11.2016 reiterating that they received the draft assessment order only on 31.03.2016 and even otherwise, the delay is only one day, if the date of service of draft assessment order is taken as 29.04.2016. After taking such stand before the 1st respondent, the petitioner before this Court, in the affidavit filed ....
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....ontemplated under Section 144(C)(3) of the said Act. In this case, by communication dated 27.04.2016, the petitioner, by attaching the entire set of documents filed before the 1st respondent, asserted and made the Assessing Officer to believe that the objection was filed in time. Therefore, the 2nd respondent is justified in deferring the matter till an order is passed by the 1st respondent. At this juncture, it is to be noted that what is contemplated under Section 144C(2) is the filing of the objections by the assessee with the Dispute Resolution Panel, if he is not accepting the draft assessment order. Of course, the said provision also contemplates filing of such objection before the Assessing Officer as well. If such objection is filed in time, then the Dispute Resolution Panel alone shall proceed to decide the matter as provided under Section 144C(5)& (6)of the said Act. Therefore, the Assessing Officer cannot proceed to pass the final order till the Dispute Resolution Panel passes an order as stated supra. Once the objection is filed within the period of limitation, consideration of the same is vested only with the Dispute Resolution Panel as provided under Section 144C(5),(....
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.... are communication to the assessee and the departmental authorities as per the provision of Section 144C(5) of the said Act. 14. No doubt, the learned counsel for the petitioner emphasized that there is no specific direction, whatsoever in the said order dated 10.11.2016. In my considered view, the dismissal or rejection of the objections filed by the petitioner, on whatever the ground may be, itself is a direction to the Assessing Officer to complete the assessment in accordance with draft order as contemplated under Section 144C(5) which reads as follows: (5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment. 15. Hence, the dismissal or rejection of the objection and communication of the same has to be treated and construed as a direction given to the Assessing Officer to complete the assessment as per draft order. Only when the panel choses to reduce or enhance the variation proposed, it can give any specific directions. Therefore, I do not think that the petitioner is justified i....
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....9 is with regard to comparables selected under section 133(6) of the Income Tax Act, 1961. Ld. AR submitted that at the time of TP study assessee had no access to such data therefore such data cannot be considered as comparables. The TPO also has selected general software development services companies and also services providers. There are no gaming companies during that period. Hence, the TP study of assessee has to be accepted. In this connection, ld. AR relied on the decision of Hewlett Packard India Software Operation Pvt. Ltd Vs ACIT 67 taxmann.com 309 (Bang Trib). 18. Ld. DR relied on the orders of revenue authorities. 19. Considered the rival submissions and perused the material facts on record as well as the orders of revenue authorities. We agree with the assessee that the assessee is a software developer in gaming sector and cannot be compared with the general software development or service providers. It is unique in terms of utilization of technical manpower, etc. It can be distinguished as we distinguish the software development and KPO. Both are similar but distinct. We direct the AO/TPO to eliminate all those general software companies as comparabl....