TaxTMI 
TaxTMI 
2018 (6) TMI 1565
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....unt of the transfer pricing (TP) adjustment made under Section 92CA(3) of the Income-tax Act, 1961 (the Act) by rejecting the TP analysis conducted by the Appellant. The Appellant prays that the TP analysis conducted by the Appellant be accepted and consequently the TP adjustment of Rs. 10,02,15,186/- be deleted. 2. On the facts and in the circumstances of the case, and in law, the Hon. DRP/Ld.AO/Learned Transfer Pricing Officer ('Ld.TPO') erred in determining the arm's length price of the international transaction pertaining to payment of fees for advisory and other services by the Appellant to its associated enterprises (AEs) as 'Nil' as against Rs. 9,57,57,501/- determined by the Appellant and thereby making a TP adjustment of Rs. 9,57,57,501/-. The Appellant prays that the book value of the international transaction be accepted to be the arm's length price of the said transaction and the above TP adjustment be deleted. 2.1 On the facts and in the circumstances of the case, and in law, the Hon. DRP/Ld. AO/Ld. TPO while making a TP adjustment on account of payment of fees for advisory and other services erred in: i. ignoring that the Appellant had ....
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.... DRP 1 Ld. AO disallowing the provision for privileged leave encashment of Rs. 52,58,033/- and provision for sick leave encashment of Rs. 12,05,570/- under section 43B of the Act. The Appellant prays that a provision made for leave encashment ought to be allowed as deductable expenditure. 5. On the facts and in the circumstances of the case, the Hon'ble DRP/Ld.AO erred in disallowing the balance additional depreciation of 10% amounting to Rs. 21,56,824/- claimed under section 32(1)(iia) of the Act on the assets which has been added to the block of Plant and Machinery during FY 2011-12 relevant to A.Y.2012-13. The Appellant prays that the claim of balance addition depreciation as claimed by the Appellant be allowed.". 3. The appeal of the assessee along with stay application moved by assessee is being decided by this consolidated order for the sake of convenience. 4. The Ld. AR for the assessee at the outset pointed out that the issue raised in the present appeal is squarely covered by the earlier order of Tribunal on similar issue. He relied on the orders of Tribunal in ITA No.2182/PUN/2013 relating to assessment year 2009-10, ITA No.211/PUN/2015 relating to assessment ....
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....ng to payment of fees for advisory and other services by the assessee to its associated enterprises. The assessee had paid sum of Rs. 9,57,57,501 /- to its associated enterprises and had declared that no adjustments were warranted in its hands on account of said international transactions. However, the TPO made an upward adjustment of Rs. 9,57,57,501/-, which was assessed in the hands of assessee as the DRP dismissed the objections raised by the assessee against draft assessment order made by the Assessing Officer. 10. We find that similar issue of adjustment, if any, on account of payment of fees for advisory and other services by the assessee to its associated enterprises, arose before the Tribunal in assessee's own case in ITA No.2182/PUN/2013, relating to assessment year 2009-10 and vide consolidated order with appeal in ITA No.211/PUN/2015, relating to assessment year 2010-11, vide order dated 29.12.2017, the issue was deliberated upon vide paras 17 to 30. The Tribunal held that TNMM method was the most appropriate method to be applied to benchmark international transactions undertaken by the assessee by taking foreign associated enterprises as tested party and further, the T....
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....port activity in the nature of IT enabled services (ITes). It has earned a mark-up of 10.20% on cost. The assessee benchmarked the said transaction using Transactional Net Margin Method by selecting 9 external comparable companies having a mean of 13.52%. Thus, the transaction was considered at arm's length by applying the proviso to section 92C(2) of the Act. During transfer pricing proceedings, TPO carried out a fresh search for appropriate comparable companies and also applied additional/modified filters for selection of comparable companies. Accordingly, he rejected all the comparable companies selected by the assessee in the TP study except 1. The TPO finally selected four companies as comparables which read as under: Sr. No. Name of Comparable Company OP/TC As per TPO 1. Microgenetic Systems Ltd. 16.25% 2 BNR Udyog Ltd. ( Seg.) 27.25% 3. e4e Healtcare Services Ltd. 18.15% 4. Ninestars Information Technologies Ltd. 22.29% Arithmatic Mean Margin (ALP) 20.99% 13. Thus, the TPO determined the ALP at 20.99% and made an adjustment of Rs. 33,51,593/- to the assessee's transfer price. 14. The DRP in its Directions rejected, inter alia, the TP....
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....;41.48% 2012-13 75.70% 2013-14 30% 2014-15 2% 19. We find that the Tribunal in assessee's own case in assessment years 2011-12 & 2012-13 vide Para 16 & 17 of the order of Tribunal has excluded Excel Infoways Ltd. because of its fluctuating margins shown by the said concern. The Tribunal held that the said concern i.e. Excel Infoways Limited which is in the process of closing down its ITES segment and also because of the factum of fluctuating margins, could not be selected as functionally comparable to the assessee. Following the same parity of the reasons, we hold that the said concern i.e. Excel Infoways Limited, because of different factors and also fluctuating margins is to be excluded from final set of comparables. Accordingly, we hold so. The Assessing Officer is directed to recompute mean margin of the comparables and determine ALP of the international transactions of provision of Oracle support services (ITes) by the assessee to its AEs after affording reasonable opportunity of hearing to the assessee. Thus, ground No. 3 raised in appeal by assessee is allowed. 20. The ground of appeal No. 4 raised by assessee is not pressed and hence, the same is dismissed as being ....