AI Drafter 
TaxTMI 
TaxTMI 
2023 (2) TMI 1103
X X X X Extracts X X X X
X X X X Extracts X X X X
....ances of the case and in law, the order passed by the Ld. Assessing Officer ("Ld. AO") is bad in law and void ab-initio 2. That the reference made by the Ld. AO suffers from jurisdictional error as the Ld. AO has not recorded any reasons in the assessment order based on which he reached the conclusion that it was "expedient and necessary" to refer the matter to the Ld. TPO for computation of the arm's length price, as is required under section 92CA(1) 3. The Ld. AO/ Ld. Transfer Pricing Officer ("TPO")/ Ld. Commissioner of Income Tax - (Appeals) ("CIT-(A)") erred on facts and circumstances of the case in determining the arm's length adjustment to the Appellant's international transactions from Associated Enterprises ("AEs"....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h regard to the computation of margins and allowance of working capital adjustment. 4.7 The Ld. AO/ Ld. TPO/ Ld. CIT-(A) erred in arbitrarily rejecting the risk adjustment conducted by the Appellant in its transfer pricing submissions without taking cognizance of the fact that the Appellant does not bear significant business and operational risks while rendering services to its overseas affiliates 4.8 The Ld. AO/ Ld. TPO/ Ld. CIT-(A) erred in disregarding the multiple year data selected by the Appellant in the TP Documentation and in selecting the current year (i.e. financial year 2008-09) data for comparability despite the fact that at the time of comparison done by the Appellant, the complete data for financial year 2008....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s Cvent India earned an OP/OC margin of 10.6%. 4. In the Order dated 17 January 2013, the TPO arrived at a final set of 6 comparable companies with arithmetic mean of 30.04% and thereby made TP adjustment of Rs.2,70,85,817/-. The final set of 6 comparables adopted by the TPO Included 3 new comparables proposed by the TPO and 3 comparables as per Appellant's TP documentation. On appeal, the ld. CIT(A) directed the TPO to exclude 2 new comparable companies selected by the TPO in TP order. However, request for inclusion of assessee's comparables was rejected by ld. CIT(A). Pursuant to the ld. CIT(A) order, the TPO, vide its order dated 01 June 2015, sustained a set of 4 comparable companies (Infosys BPO Ltd, Cosmic Global Ltd., Axis IT&T Lt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inancial Services Ltd. 7. This was rejected by ld. CIT(A) on the ground that functional profile is dissimilar. 8. The ld. AR argued that the comparable should be accepted for the following reasons: i. Company is engaged in provision of IT enabled services. ii. Processing and printing revenue are in the nature of ITES services itself. The nomenclature used in annual report of Datamatics refers to ITES services provided by it. 9. On going through the order of the TPO and the ld. CIT(A), we find that the comparable is functionally dissimilar and hence cannot be considered. Allsec Technologies Ltd. 10. This comparable was rejected on the ground that company fails export turnover filter and has diminishing sales ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... wrongly adopted margin of 13.13% in its order dated 01 June 2015 while giving effect to CIT(A) order. It is submitted that corrected margin should be computed after excluding non-operating income/expenses like dividend, interest, liabilities written back, provision for bad debts, prior period expenses. 14. The TPO shall re-compute the profit margins. Ground No. 4.5 and 4.6 15. The ld. CIT(A) granted the relief of working capital adjustment to the Appellant. (page 24-25 of ld. CIT(A)'s Order). The TPO in his appeal effect TP order did not consider the working capital adjusted margins of 2 out of 4 comparable companies (viz. M/s ICRA Online Ltd. and M/s. Axis- IT & T Ltd.). 16. The AO/TPO shall follow the directions of the ld. CI....