TaxTMI 
TaxTMI 
2018 (6) TMI 1565
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....,02,15,186/- to the total income of the Appellant on account 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 f....
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....king analysis conducted by the Appellant in the transfer pricing study ought to be accepted and the TP adjustment be deleted. 4. On the facts and in the circumstances of the case, the Hon. 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 pres....
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....ders of Assessing Officer/DRP. 9. We have heard the rival contentions and perused the record. The issue arising in the present appeal before the Tribunal is against determination of arm's length price of transactions pertaining 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....
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....port Services ( IT-enabled services) to associated enterprises ('AE'). Briefly in the facts of the case, the assessee provides Oracle software support services to Emerson Climate Technologies Incorporation, USA (AE). It is back office support 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 Info....
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....ved that the operating margin of the company had shown drastic fluctuations ranging from 247.74% in F.Y. 2008-09 to 2% in FY 2014-15. The assessee has pointed out the margins shown by the said concern were as under: Financial Year OP/TC margin 2008-09 247.74% 2009-10 267.31% 2010-11 238.71% 2011-12 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 de....