TaxTMI 
TaxTMI 
2018 (3) TMI 1310
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....opment CUP 2,15,04,878 The TPO determined the Arm's Length Price of the International Transactions at Rs. 2,95,01,518/-. The TPO further held that since the difference between the ALP and the value of international transaction booked is more than 5% of the international transaction, no benefit of the amended proviso to Sec. 92C(2) is available to the assessee. The TPO directed the Assessing Officer to enhance the taxable income of the assessee by Rs. 79,96,640/-. The Assessee filed objection before the DRP. The DRP issued direction to the Assessing Officer regarding the depreciation on the computer accessories to segregate details relating to accessories and peripherals which can work only in connection with or with the aid of computer and assets which can work independently and accordingly allow admissible depreciation on these assets @60% or @15% as the case may be. Relating to transfer pricing issues, the DRP upheld the TPO's findings. As relating to 10A issue the DRP upheld the directions of the TPO/AO. The Assessing Officer disallowed the claim of the assessee u/s 10A as well as disallowed an amount of Rs. 79,96,640 made on account of ALP and added back the same to the inco....
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....PL's Siddhartha Ltd. (2012) 345 ITR 223 and also relied upon the decision of Special Bench of this Tribunal in case of Aztec Software & Technology Services Ltd. vs. ACIT (2007) 107 ITD 0141 (SB). 6. The Ld. AR further submitted that the DRP vide order dated 2/7/2010 ignored the revised return filed by the assessee within the period of limitation as prescribed u/s 139 (5) of the Income Tax Act. The Ld. AR further submits that the assessee has revised its return of income within the time prescribed u/s 139(5) of the Act and one year expires on 31st March 2008. The assessee filed revised return of income on 19/3/2008 which means that the period of limitation will not come in the way of the assessee. The Ld. AR submits that the assessee can revised his/return of income before the expiry of one year for the relevant assessment year after discovering any omission or any wrong statement therein. 7. The Ld. AR submitted that bona-fides of the assessee can be judge from the certificate of CA who had authorized the merger a valid merger, without there being a valid order of the High Court. The Ld. AR submitted that documents such as advice of merger on the basis of CA's certificate were fo....
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....f survey. Therefore, consolidated Balance Sheet of both companies was non-est per se and therefore, the AO was not correct in taxing the income of Abridge in the hands of assessee, merely because assessee has included the same in its hand. The Ld. AR submitted that it is the settled position of law that correct income has to be taxed in correct hands and merely because an assessee has offered an income in his hands that does not mean the same is taxable in his hands. Reliance was made on the following judgments: a) CIT Vs VMRP 56 ITR 67(SC)( larger Bench) the Hon'ble Apex Court held that the doctrine of "approbate and reprobate" is only a species of estoppel; it applies only to the conduct of parties. As in the case of estoppel, it cannot operate against the provision of a statute. If a particular income is not taxable under the IT Act, it cannot be taxed on the basis of estoppel or any other equitable doctrine Equity is out of place in tax law; a particular income is either eligible to tax under the taxing statute or it is not. If it is not, the ITO has no power to impose tax on the said income" b) Mayank Podar(HUF) Vs Wealth Tax Officer reported in 262 ITR 633(Call), the Hon'....
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....lled Comparables. The Ld. AR submitted that this observation is factually incorrect and perverse. No such averment was made in TP report. This allegation of TPO was refuted by the assessee before the DRP, in its submission. It is settled position of law that when internal CUP is available then no other method is preferred. The Ld. AR relied upon the OECD Guidelines and decision of Inter garden (Bangalore). 11. The Ld. AR further submitted that the TPO has also wrongly chosen the comparable namely Bodh Tree Consulting Ltd. and SPI Technologies. The selection criteria of selecting companies with positive net-worth for the year are incorrect. Calance India had a negative net worth excluding the share application money. Negative net worth companies should have been considered. The search parameter should have been made on companies that were in the first, second or third year of operation with revenues between 2-5 Crores. The search parameter of turnover Rs, 1 to Rs. 15 crore is totally irrelevant. The search parameter should include independent companies in software development only. Wages/Sales ratio range if 40% - 60% is also not applicable as it stands up for mature companies and ....
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....n if it is presumed that the TPO has correctly applied TNMM method, then also the calculations made by the TPO are not tenable in law Because it is an admitted position of fact that the agreement was entered on 29/09/2005 and the payments were received from the month of October 2005. Therefore, the TPO ought to have excluded the expenses of 1st April to 30th September 2005. However, the TPO as well as DRP failed to considered this aspect and has made the adjustment. The Ld. AR submitted that if we exclude the operational cost for the period of 1-04-2005 to 30/09/2005 then profits of the assessee would become 67% of the cost. In more clear terms the assessee wish to demonstrate as under:- Total Cost from 1. 10 .2005 to 31 03.2006= 2,06,25,838/ 62 % of the cost can be attributed to AE which is =1,28,56,699/- Now if we apply 23,64% as applied by the TPO then the figure of profits would be 1,58,96,023/- On the other hand assessee has shown an amount of Rs. 2,15,04,878 from AE which is 67% of the cost therefore the margin shown by the assessee is much higher than the rate of TPO. In view of the above the Ld. AR submitted that the order of assessment as well as DRP may be annulled a....