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2017 (2) TMI 1410
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....he assessee in its TP study chose 10 comparables adopting TNMM as the most appropriate method. The TPO rejected its TP study, conducted a fresh one, retained 4 comparables chosen by the assessee, introduced 4 new comparables, adopted TNMM, arrived the net margin at 29.17%, after adjusting for working capital arrived the adjusted margin at 28.32 and determined the shortfall at Rs. 12,50,87,839/-. The assessee filed its objections before the DRP. The DRP directed the TPO to exclude certain comparables from the final set on grounds of functional dissimilarity and application of certain quantitative filters. The DCIT vide his order giving effect to the DRP directions determined the final TP adjustment at Rs. 133,512,120/-. Aggrieved against that order, the assessee filed this appeal with following grounds : 03. The AR did not press grounds nos 1,2,3 & 3a being general . With regard ground no 3b & 5, he pressed for the inclusion of R systems international Ltd alone. He submitted that the DRP excluded this company on the ground that the financial year ending is different and argued as under : "The Appellant had selected R Systems as a comparable company since it is functionally com....
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....ad vs M/s Mercer Consulting (India) Pvt. Ltd. Gurgaon (ITA No. 101 of 2015 (O&M) wherein the High Court held as follows- "We are unable to agree with the decision of the TPO and of the DRP that affirmed it. The view taken by the Tribunal commends itself to us. It is not the financial year per se that is relevant. Even if the financial years of the assessee and of another enterprise are different, it would make no difference. If it is possible to determine the value of the transactions during the corresponding periods, the purpose of comparables would be served. The question in each case is whether despite the financial years of the assessee and of the other enterprise being different, the financials of the corresponding period of each of them are available. If they are, the TPO must refer to the corresponding period of both the entities in determining whether the two are comparable or not for the purpose of determining the ALP. We are, therefore, entirely in agreement with the decision of the Tribunal that if the data relating to the financial year in which the international transaction has been entered into is directly available from the annual accounts of that compara....
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.... • Functionally not comparable : Product development company • Presence of Intellectual Property rights (Approx.57% of the net fixed assets) • Extraordinary events during the year • No segmental data available. 2. Fortune Infotech Ltd, with unadjusted margin of 22.80%, has to be rejected for the following reasons : • Functionally not comparable : Product development company • Presence of Intellectual Property rights (Approx.57% of the net fixed assets) • RPT of more than 25%. 3. ICRA Online Ltd, with unadjusted margin of 43.39%, has to be rejected for the reason that it is not functionally comparable and fails export earning filter. The detailed written submissions made in this regard are extracted as under : We heard the rival submissions and find that the assessee has made out a case, supra, and hence direct the TPO to exclude the above comparables. 05. The AR did not press ground nos 4,6,10. 06. The next ground pertains to ground no 7 ie the A O/ DRP not considering provision for bad and doubtful debts as non-operating in nature. In this regard, it is submitted that the provisi....
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.... the AEs in return for a fixed mark up on cost incurred in rendering of services and placed reliance on the following Tribunal judgments, wherein comparability/ economic adjustments are also mandated by the Tribunal: • Sony India (P) Limited [114 lTD 448] • E-Gain Communication Pvt. Ltd. [118 lTD 243] • Mentor Ruling • Motorola Solutions India Private Limited vs ACIT [ITA No. 5637/Del/2011] Further, in addition to the above rulings, the principle has also been upheld by the recent High Court ruling in the case of Chryscapital Investment Advisors (India) Pvt. Ltd. Vs DCIT [ITA 41712014], wherein the Hon'ble Court has held that appropriate adjustments should be carried out in situations where there are differences between the tested parties and comparables and in case such differences perceptible in the comparables cannot be eliminated on account of adjustments or otherwise, then such comparables have to be rejected. We heard the rival submissions and find that the assessee has made out a case, supra, and hence direct the TPO to make appropriate risk adjustment. 09. The ground no 11 is in not providing appropriate depre....
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....er rate than what is prescribed under the Income-tax Act, 1961, whereas the comparable cases chosen by the TPO charged depreciation as per the I. T. Act. xxx.. ..xxx. . ..xxx 12. The assessee also relied on the decision of the Hon'ble Tribunal in the case of Egain Communications Pvt. Ltd. v. /TO (2008) TIOL 282, ITAT, Pune, wherein it was held that proper adjustment has to be given where the rates of depreciation adopted by the tested party and the comparable companies are different xxx....xxx....xxx 14. Before us, the limited request of the Id. counsel for the assessee is to allow proper adjustments on account of rates of depreciation adopted by the comparable companies. In our view, the request of the assessee is proper and deserves to be accepted in the light of the decision of the Pune Bench cited by the Id. counsel for the assessee supra. We accordingly direct the TPO to allow appropriate adjustments while working out the margins of the assessee as well as comparable cases." Thus, it is submitted that the OP / TC margin of TPO comparables (post factoring the impact of depreciation as per the assessee's rate of depreciation) as und....
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....ability analysis. Specifically, the following companies ought to have been included as comparable: R Systems International Limited Document 2 Caliber Point Business Solutions Limited Ultramarine & Pigments Limited Jindal Intellicom Private Limited Omega Healthcare Management Services Private Limited 3.c including companies that do not satisfy the test of comparability. Specifically, the following companies selected as functionally comparable by the learned AO / learned TPO ought to have been rejected: • Accentia Technologies Limited Fortune Infotech Limited ICRA Online Limited 4. The learned AO / learned TPO erred in not considering the multiple year / prior year financial data of comparable companies while determining the ALP. 5. The learned AO / learned TPO erred in application of different financial year ending filter. 6. The learned AO / learned TPO erred in using data as at the time of assessment proceedings, instead of that available as on the date of preparing the TP documentation for comparable companies while determining ALP. 7. The learned AO / learned TPO erred in not considering the provision for bad an....
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....ia Healthcare Services, Instakare helps healthcare providers with a holistic and comprehensive solution that fus all theirMedical and Administrative support needs. more> instascribe InstaScribe is one of Accentia's most prestigious web-based products which helps transcription work flow automation. This web-based application can be accessed from anywhere over the internet. File transmissions over the internet are completely secure with 100% HIPAA compliance. more InstaWeb Instaweb is a web-based Java application where physicians can login status of their services, and take printouts of their TO dictate. transcribed reports. more> instaDRT Instakare's unique offering of DRT is the short cut to data entry on EMR. It is for doctors and physicians who prefer dictating their medical notes. It provides not only the flexibility to dictate reports but also the opportunity to utilize the advanced EHR system for your practice. Furthermore, Accentia is the first company to offer "Software as a Service ("SaaS") model in the Healthcare Receivables Management area. The following extracts from the Annual Report of Accentia ....
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....ducts offered by Accentia are - InstaKare; InstaScribe; InstaWeb; InstaDRT; InstaRCM; etc. Based on the above, the Appellant would like to submit that it is engaged in multiple segments which include software products and ITES. However, the annual report does not provide segmental details of income from software products and ITES. Hence, considering the margins on an entity level as computed by the learned TPO would distort comparability. Therefore, Accentia should be rejected. Presence of Intellectual Property rights (IPR's) The Appellant contends that while considering Accentia as a comparable company, due consideration should be given to the fact that Accentia possesses brand value/ IPR's which will tend to influence the pricing policy and thereby directly impacting the margins earned by Accentia. Following is an extract from the Annual Report which provides evidence to the fact stated above. (Source - Page 72 of the AR 2009-10) Document 6 SCHEDULE 4 FIXED ASSETS Goodwill/Brands/PR's Asat COST Deductions/ Asat Upto DEPRECIATION Deductions/ Upto (Amount in Rs) NETVALUE Asat As at 01.04.....
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.... sanctioned by the honorable high court of Judicature at Mumbai vide order dated 21st August 2009 and Honorable high court of Karnataka at Bangalore vide order dated 6th February 2010, the assets and liabilities of the erstwhile company was transferred and vested in the company with effect from 1st Apr, 2008 and the scheme has been given effect to in the accounts of the year. Also, goodwill appearing in balance sheet of Accentia from the FY 2007-08 further states that it has paid premium to purchase all the companies and annual report for FY 2009-10 says such goodwill as specified in the scheme of amalgamation has been incorporated in the books of the Document 7 accounts of the company and same will be amortized over the period of 10 years. Hence, Accentia had intention of acquiring these premium companies so that it can reap benefits by way of increasing its revenue and profits. Further, the company states in its Annual Report that the current year data is not comparable to its earlier year data as the number depicts including amalgamation of Accent Infoserve Private Limited. In view of the above amalgamation being effective the....
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....cent call last): File "C:\inetpub\vhosts\taxmanagementindia.com\httpdocs\python_image_text_project\google\direct_extract_text.py", line 19, in from google_doc_api import process_single_document File "C:\inetpub\vhosts\taxmanagementindia.com\httpdocs\python_image_text_project\google\google_doc_api.py", line 345 elif mime_type in ["image/gif"]: IndentationError: expected an indented block after 'if' statement on line 341 Document 9 15.3.4 M/s. Fortune Infotech Ltd. The learned counsel for the assessee contended that this company was using web based software, unique technology and technical know how imported from its business partner for providing BPO services and submitted letter dt.11.9.2012, enclosing web site extracts detailing the intangibles developed by this company. On perusal of the details furnished and submissions made, it is seen that this company has developed its own software called "Finetran" and "image index" for performing specialized services in medical transcription and patient record management. On appraisal of the same, we are of the opinion that this comparable company has developed unique software from which it would....
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....Y 350 9001:2008 â–¸ Overview The Knowledge Process Outsourcing (KPO) Division at ICRON provides financial and analytical services and support to clients in the areas of Data Extraction, Aggregation, Electronic Conversion of Financial Statements, Validation and Analysis, Accounting and Finance, Research and Analytics. This forms a vital input for the Decision Support System for our clients and complements the customer delivery capabilities. In all our services, strict emphasis is placed on data security (150 27001 certified) and quality of the service (ISO 9001 Certified) Data Security (ISO 27001 certified) Ensuring data secunty for our clients is an imperative for us. We have implemented a robust system of security controls in the area of data security using a combination of Intrusion Detection and Prevention System in our router and the necessary firewall and devices for Gateway Level Security Appliance. Improvement in reliability by eliminating data loss risks of client-specific critical applications and databases has been implemented. We have also implemented Disaster Recovery and Business Continuity measures and are in the continuous p....