TaxTMI 
TaxTMI 
2015 (11) TMI 1895
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....ment to the profit level indicator of the comparables when it has not been demonstrated or proved that the pricing of the product and services in case of comparables or even in case of the assessee company was actually determined on the basis of the working capital. 2. The learned Commissioner of Income-tax(Appeals) erred in allowing the above adjustment when the comparables have been identified following vigorous search process following the provision of Rule 10A(a), Rule 10B(2), Rule 10B(3) and Rule 10B(1), comparing functions, assets and risks, where in there was no case for any adjustment; which needed to be made to the financial results of either assessee company or the comparables as the factors which materially effect the prices o....
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....the present case, the assessee was a subsidiary of Software AG, Germany and Software AG GmbH, Germany. The assessee had provided software application development and maintenance, software solutions and services. The assessee had started the business operations in India in October, 2003, which had further reduced during the financial year 2007-08 and had finally discontinued from 19th December, 2007. The Assessing Officer had referred the transfer pricing issue to the Transfer Pricing Officer ('TPO'), who in turn had determined the Profit Level Indicator (PLI) of Operating Profits / Operating Cost of the comparable companies at 31.93% as against PLI of the appellant at (-) 6.86%, in turn the TPO had proposed an adjustment of Rs.1,13,50,290/-....
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....flects not only the purchase price of goods but also time value for the credit allowed by the suppliers. It was submitted that, hence to bring all the companies to an equal footing, an adjustment is required to be made to account for the underlying interest component in the sales price or cost of sales. 4.7.2 The Appellant has relied on several judicial pronouncements in support of its arguments. These are listed as under: ⦁ Philips Software Centre Private Limited 119 TTJ 721 ⦁ E Gain Communications Private Limited 118 TTJ 354 ⦁ Mentor Graphics (P) Ltd v DCIT 112 TTJ 408 ⦁ Sony India Pvt Limited vs DCIT (2008) 118 TTJ (Del) 865 ⦁ Global Vantegde Private Limited Vs DCIT ( ITA No 116/Del/20....