AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 367
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....nt (Rs.) Method 1. Accounts receivable Management Services 34,98,59,203.00 TNMM 2. Reimbursement of expenses 2,14,05,189.00 CUP 3. Issue of equity shares 51,30,00,000.00 CUP Total 88,42,64,392.00 The margin of the assessee in transactions with its Associated Enterprises (AE) is stated to be 2.89% and with non-AEs is 2.99%. To benchmark international transactions with AEs, the assessee furnished list of comparables. The Transfer Pricing Officer (TPO) applied various filters and finally selected following six companies as comparables:- S.No. Name of the company Operating Margin 1. Accentia Technologies Limited 11.76% 2. eClerx Services Limited 61.21% 3. Genesys International Corporation Ltd. 30.19% 4. Jindal Intellicom Private Limited 6.08% 5. Infosys BPO Ltd. 33.92% 6. Excel Infoways Limited (Segmental) 49.38% Average 32.09% The assessee objected to inclusion of Genesys International Corporation Ltd. (in short 'Genesys') and Excel Infoways Limited (Segmental) (in short 'Excel') in the final set of comparables. The objection of the asse....
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..... - The ground No.12 of the appeal is against levy of interest under section 234B of the Act. 5. Shri J.D.Mistry, appearing on behalf of the assessee submitted that while selecting comparables the TPO has failed to consider the objections filed by the assessee against inclusion of Genesys and Excel in the final list of comparables. The ld. Counsel for the assessee pointed that Genesys is functionally not comparable. The said company was included in the list of comparable in assessment year 2008-09. The matter travelled to the Tribunal. The Tribunal in appeal filed by the assessee in ITA No.7519/Mum/2012 for assessment year 2008-09 decided on 05/01/2018 held that Genesys is not functionally comparable with the assessee. The ld. Counsel for the assessee further pointed that in assessment year 2009-10 and 2010-11 there was no disputed with regard to the comparables as the case of the assessee was not referred to the TPO. In assessment year 2011-12, the TPO did not include Genesys in the list of comparables. The ld. Counsel for the assessee submitted that there has been no change either in the nature of business of the assessee or that of Genesys. Since the facts in asse....
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..... The ld. Departmental Representative submitted that the assessee's objection with regard to exclusion of Genesys and Excel from the list of comparables was duly considered by the DRP. Since there was no merit in the contentions of the assessee, the same were rejected. The ld. Departmental Representative pointed that as regards fluctuating margins of Excel, this plea was never raised either before the TPO or before the DRP. The assessee has raised a fresh plea for exclusion of Excel from the list of comparables. In respect of depreciation/additional depreciation on goodwill, the ld.Departmental Representative fairly admitted that the issue was subject matter of appeal before the Tribunal in preceding assessment year i.e. assessment year 2011-12. However, the ld. Departmental Representative pointed that the assessee had never claimed additional deprecation in the return of income. The claim of depreciation on goodwill was raised for first time during the course of assessment proceedings. The Hon'ble Supreme Court of India in the case of Goetze (India) Limited vs. CIT, 284 ITR 323(SC) has held that the Assessing Officer has no power to accept the claim not made in the return of in....
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....Ltd., wherein the assessee points out that the said concern was not to be selected as comparable because of its fluctuating margins. The learned Authorized Representative for the assessee has filed tabulated details in this regard, wherein the margins of said concern being drastically dropped from 267.31% in earlier years to 41.48% during the year under consideration. The year-wise margins of said concern are as under:- Financial Year OP/TC Margin 2008-09 247.74% 2009-10 267.31% 2010-11 238.71% 2011-12 41.48% 17. Further, the said concern had closed down its ITES and BPO segment in financial year 2011-12 on account of global recession. We hold that the said concern 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. In this regard, we find support from the ratio laid down by the Hon'ble High Court of Gujarat in Pr. CIT Vs. Allscripts India Pvt. Ltd. in Income Tax Appeal No.258 of 2016 and Pune Bench of Tribunal in TIBCO Software India Pvt. Ltd. Vs. DCIT in ITA Nos.276/PUN/2015 & cross appeal in ITA No.334/PUN/2015, rela....
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....essed in assessment year 2008-09. Accordingly, he proceeded to assess the amount of Rs. 11,51,01,122, as short term capital gain in assessment year 2008- 09. Thus, when the assessee has paid capital gain tax at the time of transfer of goodwill and the Department has accepted it, it cannot be said that the assessee has adopted a colourable device. Moreover, the scheme of amalgamation between the assessee and Tracmail AR Services Pvt. Ltd., having been approved by the Hon'ble Jurisdictional High Court, no doubt can be raised with regard to the transparency or genuineness of such transaction. Thus, when the assessee by virtue of such amalgamation has received back the goodwill in its book, depreciation has to be allowed on goodwill. As regards the doubt raised by learned DRP that the assessee cannot claim depreciation on the entire amount of goodwill, it must be observed that the assessee has claimed goodwill on the opening WDV only and not on the entire amount. It is now fairly well settled that goodwill being an intangible asset, depreciation has to be allowed. In view of the aforesaid, we direct the Assessing Officer to allow assessee's claim of depreciation of Rs. 2,25,66,258,....