TaxTMI 
TaxTMI 
2021 (1) TMI 156
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.....2 On the facts and in the circumstances of the case and in law, the 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 ....
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....s 3.3 The Hon'ble DRP/Ld. TPO erred on the facts and in law in violating the provisions of Rule 10B(2) of the Rules by arbitrarily rejecting the companies 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 ....
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....ase(s), disregarding the Annual Reports filed by the Appellant for such companies during the assessment proceedings." 3. At the time of hearing, the learned Authorised Representative primarily argued the ground No. 1.1 which reads as follows: "1.1 Based on the facts and circumstances of the present case and in law, the Final Order passed by Ld. Assessing Officer (`Ld. AO') 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....
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.... the impugned final order of assessment dated 17/1/2014 u/s. 143(3) r.w.s. 92CA of the Act; which, as contended by the id AR, is identical to the draft order of assessment passed on 14/3/2013 by only incorporating this TPO's proposals and, thereby evidently giving the DRP's mandatory directions issued u/s. 144C(5) of the Act a complete go-by. In our view, it is factually established that the AO in the final order of assessment dated 17/1/2014 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 di....