TaxTMI 
TaxTMI 
2018 (12) TMI 1216
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....er section 14A read with rule 8D(2)(iii) of the Rules, by holding that neither the assessing authority nor the Dispute Resolution Panel (DRP) has recorded specific finding as to whether the assessee has incurred specific expenditure or not even when the ingredients of section 14A are satisfied in the case of the assessee and the assessing authority has categorically specified the expenditure for such disallowance ? (2) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside the directions of the Dispute Resolution Panel with regard to comparables, namely, ICRA online, Infosys BPO and Micro Land Limited even when the decisions relied upon by the Tribunal has not reached finality and all the required tests are satisfied with regard to the aforesaid comparables ? (3) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the Transfer Pricing Officer to grant market risk adjustment without appreciating that the risk adjustment involves two vital pre-conditions, i.e., with regard to difference in risk level exist between tested party and the uncontrolled comparables which is possible to ca....
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....atable to earn the exempted income in the form of 'dividend' as computed in accordance with rule 8D of the Rules. The relevant portions of the following two judgments are quoted below for ready reference : (i) CIT v. Microlabs Ltd. [2016] 383 ITR 490, 497 (Karn). 'Aggrieved by the order of the Commissioner of Income-tax (Appeals), the assessee has raised ground No. 2. We have heard the rival submissions. A copy of the availability of funds and investments made was filed before us which is at pages 38 to 42 of the assessee's paper book and the same is enclosed as annexure-III to this order. It is clear from the said statement that the availability of profit, share capital and reserves and surplus was much more than investments made by the assessee which could yield tax- free income. The hon'ble Bombay High Court in CIT v. Reliance Utilities and Power Ltd. [2009] 313 ITR 340 (Bom) has held that where the interest-free funds far exceed the value of investments, it should be considered that investments have been made out of interest-free funds and no disallowance under section 14A towards any interest expenditure can be made. This view was again confirmed ....
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....uch expenditure during the year in question to earn dividend of Rs. 1,80,30,965, the burden was upon the assessing authority to compute the interest on such borrowed funds which were dedicatedly used for investment in securities to earn such exempted dividend income. The disallowance under section 14A cannot be a wild guesswork bereft of ground realities. It has to have a reasonable and close nexus with the factually incurred expenses. It is not deemed disallowance under section 14A of the Act but an enabling provision for the assessing authority to compute the same on the given facts and figures in the regularly maintained books of account. The assessing authority also could not have called upon the assessee himself to undertake the exercise of computing the dis allowance under rule 8D of the Rules. Such abdication of duty is not permissible in law. Since no such exercise has been undertaken by the assessing authority, the case calls for a remand. In this view of the matter, the findings of all the three authorities below are set aside and the matter is remanded back to the assessing authority for recomputing the disallowance of expenditure, if any, under section 14A of the Act,....
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....g which is a niche function requiring understanding of medical terminologies. Further, it is also engaged in KPO services including legal process outsourcing, and high-end software services and also operates from on site locations in US, UK, and the Middle east. No segmental information is reported by that company in its financial statement, it owns IPs and during the year it amalgamated with Asscent Infoserve and relied on the following cases : - ISG Novasoft Technologies Ltd. (ITA No. 185(B) 2015) the assessment year 2010-11) (Bangalore ITAT) - Amba Research (India) Private Limited (ITA No. 286/Bang/ 2015) (assessment year 2010-11) (Bangalore ITAT) - Goldman Sachs Services P Ltd. v. Deputy CIT (IT(TP) A No. 1659/B/2012 (assessment year 2008-09) (Bangalore ITAT) - Rampgreen Solutions Pvt. Ltd. (ITA No. 1066/Del/2015) (assessment year 2008-09) (Delhi-ITAT). 9. The relevant portion of the order from ISG Novasoft Techno logies Ltd., in ITA No. 185(B)2015) assessment year 2010-11 (Ban galore ITAT) is extracted under : . . . Following the above decision, we direct the TPO to exclude Ms. Accentia Tech Ltd., from the list of comparables, while analyzing the pricing of the int....