TaxTMI 
TaxTMI 
2018 (7) TMI 1415
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee, particularly when the language of the statue is plain and unambiguous? (2) Whether the Tribunal was correct in holding that the Transfer Pricing Officer/Assessing Officer needs to satisfy and communicate to the tax payer the Clause under section 92C(3) of the Act before proceeding further in the matter? (3) Whether the Tribunal was correct in holding that the tax payer was justified in using earlier year data in comparability analysis though it is mandatory as per Rule 10B(4) to use the current year's data, and also that the data available in the public databases latest by the specified data should be alone be used and the TOP cannot use data becoming available subsequent to the specified date? (4) Whether the Tribunal was correct in holding that the proviso to Section 92C(2) of the Act provides for a standard deduction of 5% in all the TP cases? (5) Whether the Tribunal was correct in allowing a flat comparability adjustment of 11.72% (6.46% working capital adjustment + 5.25% risk adjustment) ignoring all important issues like the quality of adjustment data, purpose and reliability of the adjustment performed to be considered before making adjustment on account of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iability of the adjustment 35. performed to be considered before making adjustment on account of capital and risk, which was contrary to Rule 10B(3) (ii) which provides for only reasonably accurate adjustment? 38. Whether the Tribunal was correct in holding that the companies with even a single rupee worth related party transactions should not be selected as a comparables and still proceeded to accept the tax payer's comparables which had significant related party transactions? 39 Whether the Tribunal was correct in upholding the arms length price determined by the tax payer which suffered from various defects and rejecting the arms length price determined by the TPO which was based on cogent evidence and correct analysis of the data?" 4. The summary of the findings/observations of the learned Income Tax Appellate Tribunal in its Order dated 26/09/2008 as given in para 5.71 is quoted below for ready reference:- " 5.71. We, therefore, summarise our conclusion as follows:- (i) Since the basic intention behind introducing the transfer pricing provisions in the Act is to prevent shifting of profits outside India, and the assessee claiming benefit under section 10A of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee before us and the assessees in both the decisions mentioned above have been summarized below: Sl. No. Mentor Graphics Philips Software (Assessee) 1. Engaged in rendering captive Contract software development Services to its associated enterprises. (Para 2.1 on page 116 ITD) Engaged in rendering captive Contract software development Services to its associated enterprises. 2. The Software developed By Mentor Graphics India was used in house by the associated enterprises. (Para 2.1 on page 116 ITD) The software developed by Philips Software is used in House by the associated enterprises. 3. The Software developed by Mentor Graphics was integrated By the associated enterprises In the software components and Hardware manufactured outside India, (Para 2.1 on page 116 ITD) The software developed by Philips Software is integrated By the associated enterprises In the software components and hardware manufactured Outside. 4. The complete package of the Hardware and software manufactured was sold in open Market by the associated Enterprises. (Para 2.1 on page 116 ITD) The complete package of the - Hardware and software manufactured is sold in the Open market by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e instance of an assessee or the Revenue under Section 260-A of the Act is not maintainable, as no substantial question of law requiring our consideration would arise in this appeal under Section 260-A of the Act. The relevant portion of the said judgment dated 25/06/2018 is quoted below for ready reference:- "Conclusion: 55. A substantial quantum of international trade and transactions depends upon the fair and quick judicial dispensation in such cases. Had it been a case of substantial question of interpretation of provisions of Double Taxation Avoidance Treaties (DTAA), interpretation of provisions of the Income Tax Act or Overriding Effect of the Treaties over the Domestic Legislations or the questions like Treaty Shopping, Base Erosion and Profit Shifting (BEPS), Transfer of Shares in Tax Havens (like in the case of Vodafone etc.), if based on relevant facts, such substantial questions of law could be raised before the High Court under Section 260-A of the Act, the Courts could have embarked upon such exercise of framing and answering such substantial question of law. On the other hand, the appeals of the present tenor as to whether the comparables have been rightly picke....