TaxTMI 
TaxTMI 
2021 (1) TMI 156
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....e Ld. TPO/the Ld. AO under the directions issued by the Hon'ble DRP, erred in making an addition to the Appellant's total income of INR 8,67,23,600 based on the provisions of Chapter X of the Act. 1.3 The Hon'ble DRP erred in law by upholding/confirming the action of the Ld. TPO in not satisfying any of the conditions prescribed under Section 92C(3) of the Act before making an adjustment to the income of the Appellant. 2. Grounds in relation to incorrect margin computation of the Appellant 2.1 The Hon'ble DRP failed to adjudicate on the ground of objection raised by the Appellant in relation to the segmental margin of the AE segment, contrary to the principles of consistency and provisions of Chapter X of the Act. 2.2 The Ld. TPO erred, in law and on facts, in rejecting the Net Cost plus Mark-up (`NCP') margin computed by the Appellant in its Transfer pricing study in respect of the income earned from provision of software services to its Associated Enterprises (`AEs'). 2.3 The Ld. TPO grossly erred in law and on facts by making a transfer pricing adjustment on the entire revenue including third party revenue, without restricting the adjustment to ....
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....es selected by the Appellant in the TP documentation, which are functionally comparable to the Appellant. * Akshay Software Technologies Limited * Cat Technologies Limited * Cigniti Technologies Limited * Sasken Communication Technologies Limited * Thinksoft Global Services Limited 3.4 The Hon'ble DRP/Ld. TPO erred on the facts and in law in arbitrarily rejecting functionally comparable companies on the basis of non-availability of financial data for FY 2012-13. * Marveric Systems Limited * Ybrant Digital Limited 3.5 The Hon'ble DRP/Ld. TPO erred on the facts and in law in arbitrarily rejecting functionally comparable companies with different year ending (i.e. other than 31 March 2013) * Caliber Point Business Solutions Limited * Helios and Matheson Information Technology Limited * Lucid Software Limited * Silverline Technologies Limited 3.6 The Hon'ble DRP/Ld. TPO erred on the facts and in law in arbitrarily rejecting functionally comparable companies as having employee cost less than 25% of turnover. * Zylog Systems Limited 3.7 The Hon'ble DRP/Ld. TPO erred on the facts and in law in arbitrarily rejecting functionally comparable com....
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.... being passed not in conformity with the directions issued by the Dispute Resolution Panel (DRP'), is bad in law as per provisions of section 144C(10) r.w.s. 144C(13) of the Income-tax Act, 1961 ('the Act') and hence liable to be quashed." He submitted that originally the Assessing Officer made Transfer Pricing Adjustment at Rs. 8,67,23,600 in his order passed u/s. 92CA of the Act dt. 4.10.2016. The Dispute Resolution Panel (DRP) given certain relief vide order dt. 19.09.2017 regarding inclusion of Evoke Technologies Limited and exclusion of ICRA Techno Analytics Limited from the list of comparables. However, the Assessing Officer while passing the final assessment order determined the Transfer Pricing Adjustment at Rs. 8,67,23,600 without adhering to the directions of DRP. According to the ld. AR, the final assessment order passed by the Assessing Officer should be bad in law and should be quashed. Since the final assessment order is not in conformity with the directions of the DRP, it should be cancelled. He relied on the following judgments of the Tribunal: i) M/s. Flextronics Technologies (India) Pvt. Ltd. in IT(TP) A No. 832/Bang/2017. ii) M/s. Software Paradi....
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....7/1/2014 has not given effect to or carried out the binding directions of the DRP as required u/s. 144C(10) within the time specified u/s. 144C(13) of the Act; which is a clear violation of the binding provisions of sec. 144C(10) and (13) of the Act. Therefore, in our considered opinion, the conduct of the AO/TPO in passing the impugned final order of assessment dated 17/1/2014 is a clear case of defiance and disregard to the binding directions of the higher authorities, i.e., the DRP in the case on hand. In fact, in the impugned order dated 17/1/2014 there is not even a single reference to the DRP's directions issued us/144C(5) of the Act vide order dated 30/12/2013. 3.3.2 In the factual and legal matrix of the case on hand, as discussed above, we are of the considered view that the impugned final order of assessment for asst. year 2008-09 passed u/s. 143(3) r.w.s. 92CA of the Act by the AO, in violation of the express mandatory provisions of sec. 144C(10) and (13) of the Act by not passing the impugned order in pursuance of and in conformity with the binding directions of the DRP issued u/s. 144C(5) of the Act, within the time specified for this purpose, has rendered the sa....