TaxTMI 
TaxTMI 
2018 (7) TMI 1415
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....ection 10A of the Act, is availed of by the assessee, 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....
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....% working capital adjustment + 5.25% risk adjustment) ignoring all important issues like the quality of adjustment data, purpose and reliability 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 intent....
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....is that is subject to the option of the taxpayer. (xii) The decision of the Tribunal in the case of Mentor Graphics (supra) and E-gain Communication (supra) are squarely applicable to the assessee's case. Some of the relevant common facts relating to the assessee 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 comp....
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.....No.536/2015 c/w. I.T.A.No.537/2015 (Pr. Commissioner of Income Tax, Bangalore and Another v. M/s. Softbrands India P.Ltd.,) rendered on 25-06-2018, that in these type of cases, such findings are findings of facts and unless an ex-facie perversity in the findings of the learned Income Tax Appellate Tribunal is established by the appellant, the appeal at the 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 ....
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....ssing Officer under sub-section (3), the Assessing Officer may compute the total income of the assessee having regard to the arm's length price so determined: Provided that no deduction under section 10A [or section 10AA] or section 10B or under Chapter VI-A shall be allowed in respect of the amount of income by which the total income of the assessee is enhanced after computation of income under this sub section." 7. The learned counsel for the Respondent - Assessee, Mr. Farrokh Irani drew our attention to the Assessment Order passed by the Assessing Authority in the present case vide Annexure C on 31/03/2006 in which the Transfer Pricing Adjustments under Chapter X of the Act to the extent of Rs. 22,10,80,792/- were made by the Assessing Authority, but no deduction under Section 10-A is given to the Assessee with respect to the said Transfer Pricing Adjustment made by the Assessing Authority in the present case. 8. The submission made by the learned counsel for the Revenue is, therefore, misplaced and bereft of factual foundation in the assessment of the present assessee. The afore-quoted para 5.71(i) of the Tribunal cannot be even described as a finding of fact....