TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 1689
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....avoidance of double taxation between India and USA; 2. Incorrect addition of Rs. 22,67,333/- to the transfer price of the international transaction of providing user rights in software and related services (part of total addition of Rs. 5,38,88,099) The Hon'ble CIT(A) has erred on the facts and in the circumstances of the case and in law in upholding the transfer pricing adjustment of Rs. 22,67,333/- to the arm's length price of the international transaction of receipt of fees for providing user rights in software and related support services. 3. Adjudication of the transfer pricing ground by passing a non-speaking order The Hon'ble CIT(A) has erred in law by disposing off the above mentioned transfer pricing ground of appeal of the Appellant by passing a non-speaking order. 4. Transfer pricing adjustment even when the adjustment variation in the transaction value is less than 5% of the total quantum of transaction. The Hon'ble CIT(A) has erred on the facts and in the circumstances of the case and in law in upholding the transfer pricing adjustment made by the learned AO disregarding the fact that the net variation (after aggregation of under recovery an....
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....ITA No. 73/PUN/2011 relating to assessment year 2004-05, ITA No. 74/PUN/2011 relating to assessment year 2006-07, vide order dated 08.08.2013 and ITA No. 1663/PN/2011, relating to assessment year 2007-08, order dated 20.02.2015. The learned Authorized Representative for the assessee further pointed out that in the appeal filed by the assessee before the Hon'ble Bombay High Court against the said order of Tribunal dated 08.08.2013, a substantial question of law has been framed, but the decision of the Tribunal dated 08.08.2013 has not been altered by any higher authority. The Hon'ble Bombay High Court in ITA(L) No. 267 of 2014 relating to assessment year 2004-05 and in ITA(L) No. 268 of 2014 relating to assessment year 2006-07, vide judgment dated 29.01.2014 had admitted the appeal of the assessee and framed the following substantial question of law:- "a. "Whether in the facts and circumstances of the case, the Tribunal was right in holding that the income earned by the Appellant was taxable as royalty under Article 12 of the Double Taxation Avoidance Agreement between India and the United States of America? b. Whether in facts and circumstances of the case, the Tribunal....
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....round of appeal No. 3 raised by the assessee is not pressed and hence, the same is dismissed as not pressed. 9. Now, coming to the second issue raised by the assessee by way of grounds of appeal No. 2, 4 to 6 is against the addition of Rs. 22,67,333/- made to the transfer price of international transaction providing user right in software and related services. 10. Briefly, in the facts of the case, the assessee was a foreign company and was rendering services to the Indian companies, against which it had received charges for use of facilities provided to the Indian concerns. The assessee had entered into the transactions with its associate enterprises i.e. receipt of Royalty for use of Technology from CIL, receipt of dividend from CIL, receipt of licence fees from CIL and from CSSL for providing user rights in software and provision of related support services. The Transfer Pricing Officer (TPO) determined the transaction of providing user right in software and provision of related support services to be at arm's length based on the method of cost allocation using cost estimates. The TPO asked the assessee to furnish the actual details of cost in respect of internet mail, des....
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....ircumstances when actual cost allocation may not be possible. The TPO observed that where the assessee was maintaining its accounts on the basis of calendar year, it could not be closed in December and consequently, the actual cost incurred was adopted and the plea of assessee to adopt cost allocation on the cost estimate method was rejected. The TPO further was of the view that the percentage variation in actual results over estimates in respect of desktop over laptop software at global level in the hands of assessee was not material and percentage variation over cost allocation estimate was 3.8% which was less than 5%. The plea of the assessee that the contention in respect of base erosion was accepted in the past, was rejected since the principles of res judicata were not applicable to the assessment proceedings. The second contention of the assessee that the Indian Transfer Pricing Regulations were applicable to international transaction was held to be also not correct as the assessee had reported transactions in the form 3CEB and also the transactions relating to receipt of IT charges was an international transaction and hence, the transfer pricing provisions were held to be a....