TaxTMI 
TaxTMI 
2021 (5) TMI 537
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....is is followed by the former's appeal ITA 1911/Hyd/2011 directed against the very lower appellate order imposing sec.271(1)(c ) penalty of Rs. 2,65,97,751/- by invoking sec. 271(1)(c) and qua enhancement of Rs. 7,26,86,351/- u/s 92CA of the Act. The assessee's next appeals ITA 1638/Hyd/2010 and 1795/Hyd/2011 for AYs 2006-07 and 2007-08 dated 25.10.2010 and 2.92011; framed in furtherance to the Dispute Resolution Panel "DRP" Hyderabad's direction dated 24.9.2010 and 9.8.2011; respectively, invoking proceedings u/s 143(3) rws 144C of the Act. Heard both the parties. Case file perused. It transpires during the course of hearing that almost all the issues raised in the instant batch of cases are identical/ inter-connected ones. We thus proceed assessment year wise for the sake of convenience and brevity. A.Y. 2005-06 This first and foremost assessment year 2005-06 involves assessee's and Revenue's quantum appeals ITA 992 and 1082/H/2011 along with former's C.O. 53/Hyd/2011 in latter's case. This is followed by assesee's appeal ITA 1911/H/2011 in penalty proceedings u/s 271(1)(c) of the Act. 2. We advert to the former 3 cases involving quantum assessment. Learned au....
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....he TPO/CIT(A) calculations for both the segments are as follows: 1) SWD Segment: TPO/CIT(A) Calculation S.No. Indian taxpayer AY SWD SERVICES Determind Margin Total US RELATED NON US RELATED ALP Adjustments ALP Adjustments ALP Adjustments 1 Sierra Atlantic software Services Pvt.Ltd 2005-06 24.66 65,99,05.168 9.09.24,773 62.48.35.494 8.61.05.760 3.49.69.674 48.19.013 2 Sierra Atlantic software Services Pvt.Ltd 2006-07 19.02 79,12,44,960 9.09.40.085 76.23.64.519 8.76.20.772 2.88.80.441 33.19.313 3 Sierra Atlantic software Services Pvt.Ltd 2007-08 22.47 97.28.79.682 5,39.84.914 90.04.00146 4.99.63,038 7,24 79.536 40.21.876 3.1 The Competent Authorities of India and USA, during their meeting on 15 and 16^th January, 2015 at Delhi, agreed upon a framework to resolve pending transfer pricing MAP cases, including the instant case. The framework, inter-alia, required the re-computation of the Operating Revenue and Operating Cost on the basis of the audited financials. Accordingly, it has been agreed upon by the Competent Authorities to resol....
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....(9), the Assessing Officer shall give effect to the resolution arrived at under sub-rule (4), by an order in writing, within one month from the end of the month in which the communication was received by him and intimate the assessee about the tax payable determined by him, if any. (11) The assessee shall pay the tax as determined under sub-rule (10) within the time allowed by the Assessing Officer and shall submit the proof of payment of taxes to the Assessing officer who shall then proceed to withdraw the pending appeal, if any, pertaining to subject matter of the resolution under sub-rule (4), which were filed by the Assessing Officer or the Principal Commissioner or Commissioner or any other income-tax authority (12) A copy of the order under sub-rule (10), shall be sent to the Competent Authority in India and to the assessee. (13) The amount of tax, interest or penalty already determined shall be adjusted in accordance with the resolution arrived at under sub-rule (4) and in the manner provided under the Act or the rules made thereunder to the extent that such manner is not contrary to the resolution arrived at." 6. It may please be noted that the....
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.... The Revenue is equally fair in not disputing all these intervening developments. 3. We have given our thoughtful consideration to the foregoing pleadings regarding the clinching development of "MAP" having finalized as per Rule 46G of the Income Tax rules, 1962. The assessee's international transactions in these three assessment years 2005-06, 2006-07 and 2007-08 covered under the above MAP are to the extent of 94.7%, to 96% and 93% forming subject matter of the ALP in these assessment years. Coming to the remaining international transactions with associated enterprises in other jurisdictions i.e. Singapore etc., the Revenue fails to dispute that even the Transfer Pricing Officer has not drawn any distinction qua the "ALP" in all the substantive grounds raised herein. We thus hold that the "MAP" margin of 15.49%, 15.34% and 15.76% deserves to be applied qua the remaining portion of non-USA based international transactions as well. Consequently, the assessee's appeals ITA 992/H/11 raising substantive grounds no.1 to 11, Revenue's cross appeal ITA 1082/H/11 canvassing the sole issue of proportionate operating cost figures qua transfer pricing mechanism of Rs. 52,92,38,786/- and f....
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.... of this common order be placed in the respective case files. Order pronounced in Open Court on 24/03/2021. ============= Document 1 To, F.No. 480/02/2009 - FTD - I Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Foreign Tax & Tax Research Division - I APA-I Section 906B, 9th Floor, C Wing Hudco Vishala Building, 14, Bhikaji Cama Place, New Delhi-110066 Principal Chief Commissioner of Income Tax, 10th Floor, Income Tax Towers, AC Guards, Hyderabad - 500 004 Dated: February 10th, 2021 Sir/Madam, Subject: Communication of resolution of dispute under MAP with the USA in the case of Hitachi Consulting Software Services, Inc (Formerly known as Sierra Atlantic Inc (MAP applicant) and Hitachi Consulting Software Services Private Limited (formerly known as Sierra Atlantic Software Services India Ltd.) (PAN: AACCS8350A) for Assessment Year 2005-06, 2006-07 and 2007-08 in accordance with rule 44G(6) of Income Tax Rules, 1962- reg. Kindly refer to the subject cited above. 2. In accordance with rule 44G(6) of the Income Tax Rules, 1962 ('Rules'), I am directed to st....
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.... Cost* Determined Margin Arm's Length Price ADJUSTMENTS Relief 2005- 53.87.29.734 $2.35,67,305 06 15.49 60 46.52.048 6.59.22,314 2.01.83.446 2 Siero Atlantic Software 2006- 67.47.4374767.17.38.775 07 15.34 77.47.63.838 8.76.20,772 Services Pvt Send Atur ti 595 264.21487 Software 08 Services Pvt 110 Note 1: Operating cost and Operating revenue have been recomputed on the basis of the agreement reached with the US Competent Authority. As per the agreement, Operating Cost shall exclude the following items: Forex Loss, Financial Charges. Donation, any provisions, any written off expenses, Loss on Capital and includes Reimbursements of expenses[received). ** As per the agreement, Operating Revenue is the revenue received for rendering export services excluding Forex Gain and including reimbursement of expenses (received]. 3.2 Accordingly, in pursuance of mutual agreement, relief from the adjustments made by the TPO/AO has been computed as follows: Relief Calculations SWD S.No. Indian Taxpayer AY US Related Transactions Determined Margin ALP ....
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....original demand and the demand that would be outstanding after giving effect to the MAP resolution. Ordinarily, there would not be any requirement to seek further assistance from the Transfer Pricing Officer. As per rule 44G(10), time of one month from the end of the month in which this communication is received by the Assessing Officer is available for giving effect to the MAP resolution. The Assessing Officer may please be directed to expedite the same and give effect within the stipulated time. 7. Further, I have been directed to inform you that the amount of adjustment getting confirmed after applying the terms of the mutual agreement between the two CAs shall be payable in Indian rupees by the AE(parent company) in USA to the Indian Company. The AE may settle the account payable by a cash payment or by an offset of an existing inter-company account receivable from the Indian taxpayer. The Indian taxpayer will record the payment made to settle the account payable in its statutory accounts in the taxable year in which it receives such payment from the AE. Such payment received by the Indian taxpayer is additional income pertaining to ....