TaxTMI 
TaxTMI 
2023 (6) TMI 1268
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.... learned TPO and Hon'ble DRP have erred in rejecting the Transfer Pricing Documentation ["TP documentation"] maintained by the Appellant by invoking provisions of sub-section (3) of 92C of the Act. 3. The learned AO, learned TPO and the Hon'ble DRP have erred in not considering multiple year financial data of the comparable companies while determining the Arm's Length Price ["ALP"] as prescribed under Rule 10B(4) of the Income Tax Rules, 1962 ["the Rules"]. 4. The learned AO, learned TPO and the Hon'ble DRP have erred in using data for FY 2012-13 available at the time of assessment proceedings, instead of the data available at the time of preparing the TP documentation as mandated under Rule 10D(4) of the Rules for comparable companies in determining ALP. 5. The learned AO, learned TPO and Hon'ble DRP have erred in rejecting comparability analysis performed by the Appellant in the TP documentation. Also, the learned AO, learned TPO and Hon'ble DRP have erred in conducting a fresh comparability analysis by modifying/ introducing certain quantitative filters in determining the ALP. 6. The learned AO, learned TPO and the Hon&....
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....td. • Evoke Technologies Pvt. Ltd. • Acropetal Technologies Ltd. • Sasken Communication Technologies Ltd. • Spry Resources India Pvt. Ltd. • CTIL Ltd. 16. The learned AO, learned TPO and Hon'ble DRP have erred in not allowing appropriate adjustment towards the risk difference between the Appellant vis-a-vis the comparable companies. B. Corporate Tax 17. Restriction of depreciation on computer servers, software's and networking equipments to the extent of 15% • The learned AO and Hon'ble DRP have erred in disallowing depreciation amounting to INR 9,178,532 on the networking equipments and servers by treating the same as "plant and machinery" instead of "computers" which are eligible for depreciation @ 60%. • The learned AO and Hon'ble DRP have erred in not appreciating the facts stated by the Appellant during the course of hearing that why networking equipments and servers should be treated as part of block of computers & accessories. • The learned AO and Hon'ble DRP have erred in not appreciating that the networking equipments and se....
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.... the reasons stated in the accompanying affidavit, it is most humbly prayed that this Hon'ble Tribunal be pleased to permit the Appellant to raise the following additional ground, in the interests of justice and equity. I. Transfer Pricing Ground 16a - That in the facts and circumstances of the case, having regard to the similarity of functions performed, assets employed, and risks assumed by the Appellant in rendering the services to its Associated Enterprises ("AEs") situated in the United States of America ("US") and in countries other than in the US, the arm's length price agreed between the Competent Authorities of USA and India in the Mutual Agreement Procedure invoked under the India-US DTAA, ought to be applied to the transactions entered into by the Appellant with its AEs situated in countries other than in the US and to the US AE transactions which were not covered under the MAP resolution period (January 2013 to March 2013) for the SWD segment." 2.1 The Ld. Counsel submitted that no new facts needs to be considered in order to dispose of the additional grounds raised by the assessee. It is submitted that, the additional grounds raised do not ....
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.... the Ld.AO made additions in the hands of the assessee in respect of the above TP and Corporate tax additions proposed. 3.4 Aggrieved by the order of the Ld.AO, assessee preferred appeal before this Tribunal. 4. The Ld.Counsel submitted that assessee seeks to withdraw Ground nos. 1-16 pertaining to transfer pricing adjustments in respect of the US transactions pursuant to MAP resolution dated 16.10.2020. The Ld.AR also submitted that the MAP resolution is passed in respect of the US transaction between assessee and the AE that took place during the calendar period for A.Ys. 2010- 11, 2011-12, 2012-13 and 2013-14. 5. It is the submission of the assessee in the Additional Ground no. 16a that, the rate applied to the transactions from April 2012-December 2012 may be considered for the transactions between assessee and the US-AE, that took place between January 2013 to March 2013. He placed reliance on the decision of Hon'ble Bombay High Court in case of J.P. Morgan Services India (P.) Ltd. reported in [2019] 105 taxmann.com 40 (Bombay). 5.1. It is thus submitted that the mark-up on cost agreed upon for the transaction with US-AE as agreed in the MAP may be considered for t....
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....n 16a stands allowed. 8. Ground nos. 1-16 raised by assessee is thus allowed to be withdrawn pursuant to MAP order dated 16.10.2020. 9. Ground no. 17 is in respect of the depreciation on computer servers and software at 15% by considering it as plant and machinery. 9.1 This issue is no longer resintegra as it has been considered in assessee's own case for A.Ys. 2014-15 and 2015-16 in IT(TP)A Nos. 3401/Bang/2018 and 2243/Bang/2019 respectively by orders dated 13.09.2022 and 16.09.2022 respectively. 9.2 The Ld.AR submitted that the networking equipment broadly comprises of servers, routers, server hard disk and other network accessories. These form an essential part of computer and function as an input processor, storage and output devices, and cannot operate independent of a computer system. Therefore, it is submitted that the said items are eligible for depreciation at the rate of 60%. On the contrary, the Ld.DR placed reliance on orders passed by authorities below. 9.3 This issue is also covered by the decision of Hon'ble Karnataka High Court in case of a) PCIT vs. Mphasis Ltd. reported in (2021) 128 taxmann.com 138 b) OnMobile Global Ltd. vs. A....
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....t turnover' must also be excluded from 'total turnover', since one of the components of 'total turnover' is export turnover. Any other interpretation would run counter to the legislative intent and would be impermissible. 18. XXXXXX 19. In the instant case, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. 20. Even in common parlance, when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise, any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well". On the contrary, the Ld.DR placed reliance on orders passed by authorities below. 10.3 We note that this issue is ....