TaxTMI 
TaxTMI 
2022 (7) TMI 542
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....aw, the Appellant respectfully craves leave to prefer an appeal against the order passed by the Deputy Commissioner of Income-tax -14(1)(1) ['Learned AO'], under Section 143(3) r.w.s 144C( 13) of the Income-tax Act, 1961 ('Act') ('Assessment order'), in pursuance to the Directions issued by Dispute Resolution Panel - 1(WZ) ('Hon'ble DRP'), Mumbai, on the following grounds: On the facts and circumstances of the case and in law, the learned AO /Transfer Pricing Officer ('TPO'), based on the directions of the Hon'ble DRP has: General Ground 1. Erred in assessing the total income of the Appellant at Rs.24,35,50,65,077 against a total income of Rs.17,36,67,02,180 as computed by the Appellant in its return of income. A. Transfer Pricing grounds 2. Erred in making a reference of the Appellant's case to the learned TPO under Section 92CA(1) of the Act, without satisfying any of the conditions laid down in clauses (a) to (d) of Section 92C(3) of the Act based on the information / documents available with him; Separate segmental margins 3. Erred in law and facts, in upholding that t....
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....any is functionally different from Appellant as it in engaged in varied activities like software development and maintenance, business process management, infrastructure management, product engineering, etc and does not provide any separate segmental information for software development services in its the financial statements. Adjustment required to be made to arm's length margin 13. Erred in not allowing the Appellant the benefit of working capital adjustment which is required to be undertaken to account for the difference in working capital levels between the comparable companies and the Appellant. 14. Erred in not allowing the Appellant the benefit of the risk adjustment to account for the difference between the risks taken on by the Appellant and the risks taken on by the comparable companies Transaction of royalty payment 15. Erred in rejecting the economic analysis undertaken by the Appellant using CUP method for benchmarking the royalty payment to AE, and instead determining the arm's length price to be at 1% of revenue on an ad hoc basis without using any of the methods prescribed under Section 92C of the Act read with Rule 10B o....
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....of the appeal, so as to enable the Hon'ble Income tax Appellate Tribunal to decide this appeal according to law." 2. Assessee by filing an application sought to raise additional grounds, which are as under: "1. Additional Ground (Ground No. 26 & 27); Without prejudice to ground 1 to 25, the TP order , passed under Section 92CA (3) is invalid and unsustainable in law since the same is passed on 1 November 2018 which is beyond the time limit available for completion of proceedings under section 92CA(3A) of the Act. The Ld. AO has erred in law in incorporating the TP adjustment proposed in the TP order which is invalid and bad in law into the Final Assessment Order passed under section 143(3) read with section 144C (13) of the Act." On the ground that additional ground sought to be raised is legal one which goes to the roots of the case affecting the jurisdiction of Ld. TPO to pass the order under section 92CA(3) of the Act. 3. The Ld. D.R. for the Revenue opposed raising of additional ground by the assessee on the ground that no such ground has been raised before the Lower Revenue Authorities. However, we are of the considered view that when additional gro....
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....e quashed. So we would first decide this legal issue before going into the merits of the case. 9. The Ld. A.R. for the assessee challenging the impugned order passed by the Ld. TPO contended that the order passed by the Ld. TPO is passed beyond the time limit prescribed under section 92CA(3A) read with section 153 of the Act and consequent assessment order, to the extent of TP adjustment, is not sustainable and brought on record the factual position to calculate the period of limitation under the Act necessary to decide the issue in controversy in tabulated form which is as under: Particulars Relevant dates Assessment Year ('A.Y.') 2015-16 End of Assessment Year 31-03-2016 Due date for completion of assessment under section 153(1 ) i.e. 21 months from the end of A.Y. 31-12-2017 Extension of 12 months in case of transfer pricing reference as per section 153(4) of the Act 31-12-2018 Time Limit for passing the order under section 92CA(3A) i.e. 60 days prior to the date prescribed under section 153 Less: Date on which limitation expires under section 153 i.e. 31-12-2018 1 day Less: Remaining days of December 30 days L....
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....supra) while dealing with the issue held that for computing the period of 60 days, the last date as per section 153 should be excluded. Operative part of the judgment is extracted for ready perusal as under :- "30. Now, coming to the question of how the 60 day period is to be computed, the critical question would be whether the period of 60 days would be computed including the 31st of December or excluding it. Section 153 states that no order of assessment shall be made at any time after time expiry of 21 months from the end of the assessment year in which the income was first assessable. The submission of the revenue is to the effect that limitation expires only on 12 am of 01.01.2020. However, this would mean that an order of assessment can be passed at 12 am on 01.01.2020, whereas, in my view, such an order would be held to be barred by limitation as proceedings for assessment should be completed before 11.59.59 of 31.12.2019. The period of 21 months therefore, expires on 31.12.2019 that must stand excluded since Section 92CA(3A) states 'before 60 days prior to the date on which the period of limitation referred to Section 153 expires'. Excluding 31.12.2019, the....
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....he ground that the same were not deposited within the due date prescribed under the Act. However, this issue is now no longer res-integra as has been decided in favour of the assessee by the Hon'ble Bombay High Court in case of CIT V. Ghatge Patil Transporters Ltd. 368 ITR 749 by confirming the order passed by the Tribunal that deduction claimed by the assessee on account of employees contribution to PF & ESIC well before the due date of filing return of income is allowable deduction. 20. Hon'ble High Court of Bombay in case of Ghatge Patil Transporters Ltd. (supra) held that both employees' and employer's contribution are covered under amendment to section 43B and covered under judgment of Hon'ble Supreme Court in case of CIT vs. Alom Extrusions Ltd. (2009) 319 ITR 306 and such deduction claimed by the assessee is allowable. 21. Co-ordinate Bench of the Tribunal in case of M/s. Adyar Ananda Bhavan Sweets India P. Ltd. vs. ACIT (supra) also decided the identical issue in favour of the assessee by holding that the payment of employees contribution qua PF & ESIC if made before the due date of filing of return of income, the same is allowable deduction as per provisions of Secti....