TaxTMI 
TaxTMI 
2024 (8) TMI 1121
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....d. Assessing Officer ('AO') erred on facts and in law in assessing the income of the Appellant at INR 214,010,130 vide Final Assessment Order dated 30th May 2022, as against the returned income of INR 29,047,030 declared by the Appellant. 2. That on the facts and circumstances of the case and in law, the Ld. Dispute Resolution Panel ('DRP')/Ld. TPO/ Ld. AO erred in making a transfer pricing adjustment of INR 62,100,644/- in relation to provision of software development services ('SDS segment') on the basis of invalid and cogent reasoning. Grounds against transfer pricing adjustment in SDS Segment 3. That on the facts and circumstances of the case and in law, the Ld. DRP/ Ld. TPO/ Ld. AO erred in re-computing Appel....
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.... facts and in law in initiating penalty proceedings under, section 271(1)(c) of the Act." 3. Heard the arguments of both the parties and perused the material available on record. 4. The captioned matter is in the second round of litigation before this Income-tax Appellate Tribunal. 5. FIS Global Business Solutions India Private Limited (FIS GBS) (Formerly eFunds international India Private Limited or EFI) was incorporated in July 1997. During F.Y. 2004-05, FIS GBS was engaged in rendering following services to its Associated Enterprises ("AEs"): * Software development services ("SDS") * Business Process Outsourcing ("BPO")/IT-enabled services ("ITeS") 6. In provision of these services, the assessee utilizes rou....
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.... the non-AE revenue and non-AE cost. Particulars Reference As per Ld. TPO (Page 5 of Rectification Order attached as Annexure-1) Correct Computation as per Assessee (Page 177 of Paper book) Assessee contentions Actual Operating Cost [A] 466,327,000 (both AE and non-AE transactions) 407,102,062 (only AE transactions) Only AE revenue and AE cost should be considered for computing the TP adjustment Arm's Length Margin (%) [B] 19.83% 19.55% Arm's Length Price [ALP=A*B] 92,472,644 79,603,647 Arm's Length Operating Income [C=A+ALP)] 558,799,644 486,705,709 Actual Operating Income [D] 496,699,000 (both AE and non-AE transactions) 467,616,099 (....
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....nbridge Technologies Pvt. Ltd., ITA No. 9032/Mum/2010 14. We find that the ITAT directed the TPO to verify the computation of TP adjustment as it was not restricted to international transactions and non-AE revenue and non-AE costs have been considered by the TPO while computing the TP adjustment. "11. The Ld. DR further submitted as relates to other aspect of Ground No. 2, the CIT(A) recomputed the margin of SDS Segment to 14.86% from 6.51% (as determined by the TPO) on the ground that the computation given by the TPO included domestic transactions as well. This issue was never raised by the assessee before the TPO and the CIT(A) re-computed the margin without providing any opportunity to the TPO especially considering the fact ....
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....y the CIT(A) and same needs to be verified at the level of TPO/A.O. The TPO has rightly computed the operating margins of the assessee from the SDC and ITES segment to be at 6.51% and 14.79% respectively." 16. The ld. DRP fairly directed the TPO to verify the computation and pass a speaking order, however the TPO has not commented on the erroneous computation in the TP order. "4.3.3 In Ground number 4.2 the assessee has challenged the margin computation of the assessee for the respective segments being benchmarked. In this regard the assessee has submitted as under: "The assessee under its software development segment provided services both to related and unrelated parties. As per the provisions of the taw, the assessee....