TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 1444
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....es of electric integrated circuits to its parent company and filed the Return of Income for the Asst. Year 2006-07 on 30.11.2006 with total income of Rs.24,52,123/-.Subsequently,the case was selected for scrutiny. The Assessing Officer found that the assessee has international transactions of software development services, hence with the prior approval of CIT, Bangalore-1, the matter was referred to the Transfer Pricing Officer (TPO) for determination of Arm's Length Price (ALP) and the TPO has passed order under Section 92CA of the Act dt.29.10.2009 with Transfer Pricing Adjustment of Rs.13,57,27,982/- and the draft assessment order was passed under Section 143(3) r.w.s. 144C of the Act dt.24.12.2009. Aggrieved by the draft assessment order, the assessee filed objections before the DRP and the DRP has passed the order under Section 144C(5) r.w.s. 144C(8) of the Act Dt.20.09.2010 with directions to TPO, in respect of M/s. Megasoft Limited which has abnormal fluctuation of margins therefore to be rejected as comparable company and rejected the other objections of the assessee. The final assessment order was passed under Section 143(3) r.w.s. 144C of the Act dt.11.10.2010 with total ....
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....lter. - a) Infosys Limited - The company.s turnover is Rs.9,028 Crores and has a brand value and also engaged in diversified operations apart from Software Development Services, R&D Activities and fails the uppeer turnover filter. b) Aztec Software Limited - The company sales are Rs.128.61 Crores and fails the RPT filter and functionally dissimilar. c) Kals Information Systems Limited - The company sales turnover is Rs.1.96 Crores and is functionally different and engaged in software products and training apart from provision of Software Development Services. d) Persistent Systems Limited - The company turnover is Rs.2.917 Crores and it is functionally dissimilar and fails the upper turnover filter. e) Tata Elxsi Limited - The company has turnover of Rs.235.63 Crores and functionally dissimilar, and is engaged in product development activity which include Multi Media Imaging Process and involved in activities such as hardware design, industrial design, engineering design and visual computing. 8. Further the learned Authorized Representative submitted that these comparable companies were excluded by the co-ordinate bench of this Tribun....
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....e assessee was provided an opportunity by the ITAT in remanding the disputed issue to the Assessing Officer, the assessee could not substantiate with proof on usage of assets in the previous year. Accordingly, we do not find any merit in the submissions and alternative pleas and confirm the action of the Assessing Officer and dismiss the ground of appeal of the assessee. 11. The LdAr submitted that the Assessing Officer has not granted credit for taxes paid in protest amounting to Rs.3 Crores. We found, the DRP has considered the objections of the assessee at Para 2.8.1 and directed the Assessing Officer to examine the claim and allow the credit after verification. The learned Authorized Representative's contentions are that in the final assessment order, the Assessing Officer has not granted the credit for taxes paid. We considering the facts and submissions direct the Assessing Officer to grant credit of taxes paid after due verification and allow the ground of appeal for statistical purposes. 12. In the result, the assessee appeal is partly allowed for statistical purposes. Pronounced in the open court on the date mentioned on the caption page. ============= Documen....
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....ware (India) Ltd 15.69 15.40 14 SIP Technologies & Exports Ltd 3.06 1.32 15 Bodhtree Consulting Ltd 15.99 15.10 16 Accel Transmatics Ltd (Seg) 44.07 42.33 17 Synfosys Business Solutions Ltd 10.61 7.56 18 Megasoft Ltd 51.73 43.46 19 Lanco Global Solutions Ltd 5.27 5.07 20 Flextronics Software Systems Ltd 27.24 26.96 21 Vision Cmptech 23.74 23.80 22 Thinksoft Global 13.28 13.02 Arithmetical Mean 20.43 19.22 Document 5 4. Computation of Arm's Length Price: As the adjusted mean margin of the comparables shows operating profit on cost at 19.22% which is not within the permitted range (+/- 5% of taxpayer's margin of 8.36%), hence adjustment is made as under: Value (in Rs.) Description Arm's Length Margin 19.22% Operating Cost 1,24,57,08,457 Arm's Length Price @ 119.22% of Operating Cost 1,48,51,33,622 Price Received 1,34,99,03,923 13,52,29,699 Shortfall being adjustment U/s 92CA Document 6 8. Now we decide the issue about the claim of the assessee for exclusion of 10 comparables. We examine the applicability of these t....