2012 (1) TMI 343

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....A'). The assessee charges for these services on a cost plus basis. The make-up-charges are determined based on the transfer pricing analysis whereby, the financial data of comparable companies for the prior two years is taken into consideration. This is in accordance with the provisions of Rule 10B(4) of the Income-tax Rules, 1962. Accordingly the assessee has considered multiple year average financial data of comparable companies for justifying the arm's length nature of the international transactions entered into during the relevant financial year. Transfer Pricing Officer (TPO) disregarded the comparability analysis conducted and documented in the transfer pricing study by the assessee. With respect to the IT services, the TPO re....

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....ceedings, the TPO disregarded the fact that the assessee used prior years data of comparables to actually set the transfer prices and proceeded to use the financial data of comparable, for FY 2006- 07. TPO disregarded the submissions made by the assessee with respect to application of RPT Filter using a threshold of 10% on sales in accordance with the Sony Tribunal Ruling. Instead, the TPO applied the RPT filter using a threshold of 25% on an appropriate base (sales/expenses (total sales + total expenses)). TPO also disregarded the assessee's arguments/submissions against rejection of certain comparable companies on the grounds of their alleged/ purported functional dissimilarity and also on inclusion of certain companies in the final s....

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....O compared the above transactions with that of a set of comparables and against objections raised by the assessee who relied on the Soni Tribunal ruling of the Delhi Bench and proceeded to make addition amounting to Rs. 10,38,40,122/-. The AO adopted the same figure for making addition and passed the draft assessment order dated 16-12-2010 u/s 144C(1) of the Act. The matter travelled to the DRP who issued directions u/s 144C of the Act on May 20, 2011 upholding the draft order of the AO. Finally the assessment was made with an addition of Rs. 10,38,40,122/- vide assessment order dated 5th Oct., 2011. Thus the total income was determined by the AO at Rs. 21,63,60,622/- as against the returned income of Rs. 11,25,20,500/-. As per the ITNS 150....

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....er him, if the benefits of the proviso are granted, the demand shall be reduced substantially. As per his calculations, the final approximate tax demand including interest after granting the benefits of the said proviso works out to i) Rs. 3,83,05,008/- on account of IT segment, ii) Rs. 33,22,391/- on account of ITES segment totalling to Rs. 3,16,000/- approximately. This includes the statutory interest which is not quantified now. Further, he mentioned that the tax component shall be somewhere around Rs. 2 crores. Further, Shri Gupta mentioned that the assessee seeks grant of stay and he is ready to pay the tax amounting to 10% of the above adjusted tax demand in line with many other cases decided by various Benches of the Tribunal. On the....