TaxTMI 
TaxTMI 
2025 (5) TMI 183
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....elhi (hereinafter referred to as 'the Learned Assessing Officer' or 'the Ld. AO') in pursuance to the directions issued by the Hon'ble Dispute Resolution Panel - I, Bengaluru (hereinafter referred to as 'the Hon'ble DRP') on the following grounds which are without prejudice to one another: General ground: 1. On the facts and circumstances of the case and in contrary to law, the Deputy Commissioner/Assistant Commissioner of Income Tax, Transfer Pricing Officer - 1, Hyderabad (hereinafter referred to as 'the Ld. TPO') and the Ld. AO pursuant to the directions issued by the Hon'ble DRP erred in making transfer pricing adjustment of INR 24,37,97,528 and INR 22,10,05,184 on corporate tax issues, aggregating to INR 46,48,02,712, and the same being wholly unjustified are liable to be deleted. Validity of the assessment order: 2. On the facts and in the circumstances of the case, the final assessment order passed by the Ld. AO under Section 143(3) read with Section 144C(13) read with Section 144B of the Act is barred by limitation as the same is passed beyond the time limit prescribed under Section 153 of the A....
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....f the case and in contrary to law, the Ld. TPO erred in and the Ld. AO further erred in upholding / confirming the action of the Ld. TPO in inappropriately rejecting the transfer pricing documentation maintained by the Appellant, without appreciating that none of the conditions mentioned in clauses (a) to (d) of Section 92C(3) of the Act were satisfied. 7. On the facts and circumstances of the case and in contrary to law, the Ld. TPO erred in and the Ld. AO further erred in upholding / confirming the action of the Ld. TPO in rejecting certain appropriate filters adopted by the Applicant in its transfer pricing documentation and in applying certain inappropriate filters to select new comparable companies. 8. On the facts and circumstances of the case and in contrary to law, the Ld. TPO erred in and the Ld. AO further erred in upholding / confirming the action of the Ld. TPO in accepting the following inappropriate companies as comparable to the Appellant: i. Great Software Laboratory Pvt. Ltd ii. Robosoft Technologies Ltd iii. Daffodil Software Pvt Ltd iv. Sagarsoft (India) Ltd. v. Wipro Limited vi. Nihilent Ltd....
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....o law, the Ld. TPO erred in and the Ld. AO further erred in upholding / confirming the action of the Ld. TPO in not allowing working capital adjustment in accordance with the provisions of Rule 10B of the Income-tax Rules, 1962 ('Rules') to account for differences between the international transactions undertaken by the Appellant, being a captive unit, and those undertaken by the alleged comparables. 14. On the facts and circumstances of the case and in contrary to law, the Ld. TPO erred in and the Ld. AO further erred in upholding / confirming the action of the Ld. TPO in not allowing risk adjustment in accordance with the provisions of Rule 10B of the Rules to account for differences between the international transactions undertaken by the Appellant, being a captive unit, and those undertaken by the alleged comparables. Interest on delayed receivables: 15. On the facts and circumstances of the case and in contrary to law, the Ld. TPO erred in and the Ld. AO further erred in law and on facts by treating the delayed receivables as unsecured loan advanced by the Appellant to its AEs and treating the delayed receivables as an international transacti....
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....ection 143(1)(a) of the Act, proposing to make adjustment on account of alleged deviation in the Tax Audit Report ('TAR') vis-à-vis the Return of Income ('ROI') and has directly issued an intimation under Section 143(1) of the Act, making the said adjustments to the returned income, thereby not granting an opportunity to submit appropriate response against the proposed adjustments. 23. On the facts and circumstances of the case and contrary to the law, the Ld. AO erred in considering the adjusted total income determined as per intimation dated 21 December 2021 issued under Section 143(1) of the Act, instead of considering the returned income as the starting point for assessing the taxable income. 24. On the facts and in circumstances of the case and contrary to the law, the Ld. AO erred in not granting an opportunity of being heard as per Section 144B(1)(xii) of the Act read with the Faceless Assessment Scheme, 2019, which provides that where a proposed modification/variation is prejudicial to the interest of the Assessee, a reasonable opportunity of being heard must be provided. 25. On the facts and in circumstances of the case and....
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....wards Karnataka State Disaster Management Authority ('KSDMA') which is eligible for deduction under Section 80G of the Act and the Hon'ble DRP further erred in not adjudicating the same in the final Assessment Order. 31. On the facts and circumstances of the case and contrary to the law, the Ld. AO has erred in calculating interest of amount of INR 3,45,81,167 under Section 115P of the Act in the computation sheet, on account of alleged non-payment of tax of INR 7,16,12,147 on dividend distributed to the shareholders. Consequential: 32. On the facts and circumstance of the case and in law, the Ld. AO has erred in computing the consequential levy of interest under section 234A and 234B of the Act of INR 24,56,533 and 6,69,09,388 respectively, on the assessed income of the Appellant. 33. On the facts and circumstance of the case and in law, the Ld. AO has erred in computing the interest under section 234C of the Act on the assessed income instead of returned income of the Appellant. The Appellant Company craves leave to add / alter / amend / substitute any of the above grounds of appeal, at the time, before or at the time of he....
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....erein the assessee has offered the income to tax in terms of the advance pricing agreement (APA). Thus, the learned AR has submitted that despite the advance pricing agreement signed by the authorities and consequent filing of the modified return of income in Form 3CEF by assessee, the addition is made in total disrespect to the APA in respect of the international transaction. Thus, the learned AR has submitted that the additions made by the Assessing Officer amounts to double taxation of the same income when the assessee has already offered the income to tax in terms of the advance pricing agreement. 7. The learned DR, on the other hand, has relied upon the orders of the authorities below and submitted that the Assessing Officer is bound by the order of the TPO and therefore, cannot tinker with the TP adjustment proposed by the TPO. 8. We have considered the rival submissions as well as the relevant material available on record. The TPO while passing the order dated 19/05/2022 u/s 92CA(3) of the I.T. Act, 1961 made the transfer pricing adjustment on the international transactions, the summary of which are given at page No. 108 of the TP order as under: Nature of transacti....
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....urn of income in form 3-CEF before the final assessment as well as giving effect order passed by the TPO but the same was not taken into consideration either by the TPO or by the Assessing Officer while passing the respective orders in terms of the directions of the DRP. Since the international transactions which is subject matter of this appeal are already covered under the APA and the assessee has already filed the modified return of income in Form 3CEF placed at page No.224 to 234 of the paper book, then the additions made by the Assessing Officer on account of TP adjustment in respect of the same international transactions would not survive. Accordingly, in the facts and circumstances of the case when the assessee has already paid the tax in respect of the international transactions and in terms of the price agreed between the parties as per the APA, then the TP adjustment made in respect of these two international transactions namely provision of software development services and interest on delayed receivables is not sustainable and the same is deleted. 12. Ground Nos.22 to 29 are regarding the disallowance made by the CPC while processing the return of income u/s 143(1) o....