TaxTMI 
TaxTMI 
TaxTMI 
2020 (4) TMI 118
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....EMBER These cross appeals are directed against the order passed by ld CIT(A)-1, Bengaluru for asst. year 2012-13. 2. At the time of hearing the ld AR submitted that the assessee is not pressing its appeals and in confirmation of the same he has made necessary endorsement in the grounds of appeal furnished by the assessee. Accordingly the appeal of the assessee is dismissed as not pressed. 2. The assessee is engaged in providing IT Enabled Services in investment Research Support to its parent company named Amba Holdings Inc. It carries on its business through 3 units viz., STPI Unit, SAZ Unit-1 and SAZ - Unit 2 and it operates under a cost + mark up billing arrangement. SEZ Unit-1 has claimed tax holiday benefit u/s 10AA of the Act. 4. T....
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....he contrary, if the expenses are booked at a lower level, then there will be corresponding reduction of revenue. The assessee further submitted that the usual method adopted for boosting the profit of the exempted units is by booking lesser expenses under the said unit. However under the Revenue model adopted by the assessee, if lesser expenses is booked under exempt unit, then there will be corresponding reduction in gross revenue and the same will not give any advantage to the assessee. Accordingly it was submitted that the assessee shall be in disadvantage position, if expenses are booked at lower level in exempted units. Accordingly it was contended that the presumption entertained by the AO is not correct and hence the disallowance mad....
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....tes on a cost plus mark-up arrangement wherein each unit's revenue is computed on a 'cost plus' basis i.e., the revenue of a unit (and the profit) increases as the cost base increases. "It is submitted that, "it is imperative to mention here that even by charging the identified common expenses (namely key managerial remuneration, audit fee, donations etc) to the STPI Unit alone, the Appellant has not reduced its taxable income. In fact, the same has resulted in increasing the taxable income of the Appellant, keeping in view the operating model of the Appellant. Had the Appellant apportioned the identified common expenses among all the units, it would have reduced the cost base of the STPI unit, thereby, resulting in reduced ....
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....enue model of cost + mark-up adopted by the assessee, as rightly pointed out by the assesee, it will not gain anything by under booking expenses in the exempt unit, since the under-booking of expenses would result in corresponding reduction in Revenue also. In any case we noticed that the AO has asked the assessee to reallocate the common expenses only by entertaining surmises and conjectures and not based on any creditable defect noticed by him. Hence, we are of the view that there is no reason to interfere with the order passed by the ld CIT(A) on this issue. 10. The next issue urged by the Revenue relates to transfer pricing issue. 11. The Revenue has raised following grounds in this regard. "1. Whether the CIT(A) was justified in fa....
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....asken Cornmujjjçatioii Technologies Ltd, Persistent Systems Ltd, an4jCRA..Techn9 Analytics ltd as functionally not comparable by demanding comparability standards that may itself defeat the purpose of law relating to determination of ALP under the Income Tax Act. 7. Whether in the facts and circumstances of the case and in law the CIT(A) was justified in imposing the decisions of its ITAT benches rendered in some case while ignoring other decisions of coordinate benches where opposite view has been taken in respect of turnover filter, which brings inconsistency in approach of CIT(A). 8. Whether the learned CIT(A) is correct in facts and circumstances of the case and in law in excluding M/s. Infosys Ltd. on the basis of Turn over ....