TaxTMI 
TaxTMI 
2018 (10) TMI 186
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....brevity. ITA No. 268/Kol/2017 - AY 2008-09 3. The assessee's sole substantive ground raised in the instant appeal challenges the lower authorities action making arms length price adjustment of Rs. 2,50,45,534/- relating to its international transactions in the nature of provision of software services to its associate Eenterprises (AE). The assessee-company engaged in printers, accessories and software development services. It rendered provision for software development services of Rs. 34,42,19,850/- to its overseas AE in the relevant previous year. The Transfer Pricing Officer (TPO), the Assessing Officer (AO) and the Ld. CIT(A) are unanimous in making the impugned ALP adjustment regarding the above provision made for software development service involving ALP adjustment of Rs. 2,50,45,534/-. The assessee's only substantive argument during the course of hearing is that the CIT(A) has erred in law and on facts in denying working capital adjustment rebate which has to be mandatorily allowed as per various Tribunals' decisions in Phillips India Ltd. Vs. DCIT, ITA Nos. 863 & 539/Kol/2016, Acusis Software India Pvt. Ltd. Vs. ITO - TS-940-ITAT-2016 (Bangalore) and Global e-Business....
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....ssessee has simply given the working definition of "capital Adjusted Operating Margin as it has done in the case of "Cost Cover Ratio". In addition, the assessee has neither brought on record any evidence / document, nor conducted any analysis / study to prove that it "does not employ Significant funds in working capital in comparison to comparable companies". Thus it would not be misplaced to arrive at the conclusion that the working capital adjustment proposed by the assessee is an afterthought, considered by the assessee in pursuance to the proposed adjustment made by the TPO based on the assessee's computed margins of its selected comparables for the F. Y 2007-08. The assessee has also placed reliance on the judgment of the Hon'ble ITAT in the case of A M Todd Company Pvt. Vs Income Tax officer ITA No / Mum/ 2006. On examination of the said judgment, it is found that the decision of the Hon'ble ITAT relates to the allowance of fresh claim by the assessee during the assessment proceedings on an amount erroneously offered by it for taxation, which was otherwise liable for exemption. The facts and circumstances of the case are clearly different from that the a....
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.... terms: "a) Compute the average of opening and closing balances of inventories, trade debtors/receivables, trade creditors/payables of both the tested party and the comparables, on revenue account only. b) work out the net working capital ratio (in percentage) after dividing the net working capital by operating cost/sales or such denominator (as is used in the PLI) both for the tested party and the comparables. c) determine the difference between the tested party's ratio with that of each comparables. d) thereafter multiply the above difference by interest rate i.e. SBI Prime Lending Rate as on 30th June of the relevant financial year. e) lastly, these adjustments are to be added to the profit margin of comparable companies a finally determined in accordance with the directions of this Panel. f) Besides, credits received from various group concerns or loans etc. should not be taken into account." 6. Learned DRP has made it clear that the Assessing Officer would apply SBI's prime lending rate as on 30th June of the relevant previous year as the interest rate qua the issue before us. The Revenue fails to dispute all these inter....
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....ol.Trib.) that where an assessment is transferred from one Assessing Officer to another, all pending proceedings have to be commenced after such a transfer simultaneously. Another decision in ITO Vs. NVS Builders Pvt Ltd. (2018) 91 taxmann.com 462 (Del.Trib.) that non-service of section 143(2) notice within the prescribed period renders the entire assessment a invalid. Last judicial precedent is Indorama Software Solution Ltd. Vs. ITO (2013) 29 taxmann.com 78 (Mum. Trib.) that section 148 notice issued by an Assessing Officer not having jurisdiction is patently illegal and all consequential proceedings in furtherance thereto are liable to be set aside. We keep in mind the unanimous legal proposition propagated by the above judicial precedents that issuance of section 143(2) notice by the competent Assessing Officer having is a mandatory condition before framing of a scrutiny assessment and noncompliance thereof renders the entire consequential proceedings to be non-est in the eyes of law. 9. We now advert to the relevant facts of the case. There is no dispute that the regular assessment in all these three assessment years have been framed on 16.11.2015, 30.12.2016 and 18.07.2....
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....ircle-14(1). Kol from corporate wardd-4(4), CHE on 11.03.2015. Thus, the assessee was having two PANs with address of Chennai and as the PAN was lying with Cir II(4) CN at that point of time when notice u/s. 143(2) was issued Notice u/s. 143(2) had its limitation in terms of issuing within the stipulated period. The notice generated through system and issued subsequently to the assessee by the AO holding jurisdiction over the assessee for lying of PAN jurisdiction. Issue of notice and subsequent completion of assessment is not irregular or illegal. The PAN jurisdiction was transferred on 11.03.2015 and the present jurisdictional officer had no time to issue a notice u/s. 143(2) of the IT Act again as no notice under this sub-section shall be served on the assessee after the expiry of six months. Obviously, the AO issued subsequent notices u/s. 142(1) and preceded on completion of the assessment proceedings. The matter got complicated due to assessee's having two PANs with address of Chennai, though the assessee never pointed to this fact while questioning the legality of the notice u/s 142(2). Sec. 142(2) has stated that the Assessing Officer or ....