2023 (6) TMI 205

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..... At the outset, we will deal with appeal relating to assessment year 2006-07. 3. Briefly, the facts are, the assessee is a resident corporate entity and is a subsidiary of Hewitt, USA. As stated, assessee is engaged in providing global management consultancy services. For the assessment year under dispute, the assessee filed its return of income declaring income of Rs.12,10,71,067. 4. In course of assessment proceedings, the Assessing Officer noticing that assessee has entered into international transaction with his associates enterprises (AE) made a reference to the Transfer Pricing Officer (TPO) to determine arms length price (ALP) of international transactions. While examining the arms length nature of international transactions, the ....

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....ee and selection of fresh comparables. Relying upon a decision of the Tribunal in case of Verizon India (Pvt.) Ltd. vs. CIT - ITA No.5566/Del/2011 dated 17.09.2012, learned Commissioner (Appeals) held that additions arising out of transfer pricing adjustment based on change of filters and comparables cannot lead to imposition of penalty under Section 271(1)(c) of the Act. As regards, addition on account of disallowance of provision for doubtful debts, learned Commissioner (Appeals) observed that the assessee has shown the provision for doubtful debts in the original return of income. Therefore, the assessee cannot be accused of furnishing inaccurate particulars of income. In this context, he relied upon the decision of Hon'ble Supreme C....

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....tire adjustment of Rs.24,23,62,055 made by the TPO. In any case of the matter, as rightly observed by learned Commissioner (Appeals), the entire TP adjustment was due to change in filter and comparables by the TPO. There cannot be any doubt that application of filters and selection of comparables are highly debatable issues. Therefore, in respect of additions made on such issues, the assessee cannot be accused of furnishing inaccurate particulars of income or concealing income. Therefore, in our view, learned Commissioner (Appeals) was justified in deleting the penalty imposed in respect of addition made on account of TP adjustment. In so far as the disallowance of provision of doubtful debts is concerned, it is observed that while deciding....

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.... learned Commissioner (Appeals) having found that disallowance made under Section 10A of the Act was deleted by DRP and the TP adjustment was on account of change of filters and comparables, deleted the penalty imposed. 12. We have considered rival submissions and perused material on record. 13. Facts relating to TP adjustment are more or less identical to assessment year 2006-07. In this year, the Assessing Officer suggested total adjustment of Rs.41,20,14,305, out of which US transactions amounted to Rs.38,30,08,498 and non-US transaction amounted to Rs.2,90,05,807. The adjustment relating to US transactions were settled under MAP and adjustment was reduced to Rs.6,96,57,816. In so far as, non US transactions are concerned, the Tribunal....