TaxTMI 
TaxTMI 
2025 (6) TMI 1047
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....Assessee has raised the following grounds of appeal : "1. On the facts and in the circumstances of the case, and in law, the Ld. Assessing Officer ('AO') / Ld. Dispute Resolution Panel ('DRP') has erred in proposing to enhance the income of the Appellant by INR 15,77,44,750 by holding that the international transaction of provision of IT services is not at arm's length price as envisaged under the Act. 2. On the facts and in the circumstances of the case, and in law, the Ld. AO/ Ld. DRP erred in disregarding the fact that none of the conditions, as set out in Section 92C(3) of the Act are satisfied and hence does not warrant re-determination of arm's length price by the Ld. TPO. The Appellant has co....
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....price of the impugned international transaction. 7. On the facts and in the circumstances of the case, and in law, the Ld. AO/Ld. DRP has erred in the computation of Profit Level Indicator in case of the Appellant by modifying the Operating/Non-operating nature of certain items." Additional Ground : 1] In this case, the assessee has raised the following additional grounds of appeal- 2] The assessee further submits that recently Hon'ble Madras High Court in the case of CIT vs. Roca Bathroom Products (P.) Ltd. [140 taxmann.com 304] has held that the outer time limit of 33 months in case of reference made to the TPO u/s. 153 would not refer to draft order, but only to final order and hence, the entire pr....
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.... transactions entered into by the Assessee for the said AY. The Assessee in the TP study report had identified 9 comparable companies, with working capital adjusted arm's length range of 9.49% to 14.05%. The margin of the Assessee was 12.89%. The Assessee has considered foreign exchange gain and loss as operating in nature while calculating the operating margin. 7.1. The Assessee in its TP study report, while calculating the profit margin, had considered foreign exchange gain and loss as operating in nature. All such gains are on account of normal business operations of the Assessee and have been offered to tax during the year. The TPO, recalculated the operating margin by considering foreign exchange gain as nonoperating, howe....
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....ITA No. 1692/PUN/2018]; Aptara Technologies Private Limited Vs. DCIT Circle 1(1) Pune [ITA No.291/PUN/2016); 7.4. The Assessee has recalculated the operating margin of the Assessee and that of comparables, after considering foreign exchange gain / loss as operating in nature The same is enclosed in page 188 of the paperbook. The Assessee has also enclosed the revised operating margin of the TPO considered comparable companies after considering foreign exchange gain as operating in nature and after allowing working capital adjustment. The revised margin is margin of comparable companies is enclosed at page 189 of the paperbook." Submission of ld.DR : 3. Ld.DR for the Revenue relied on the order the Dispute Resolution ....
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....ed I.T. Services to its AEs. Assessee receives revenue from operations entered with AEs in Foreign Exchange. Therefore, Gain due to Foreign Exchange Fluctuation is directly linked to the Revenue Receipt. Therefore, there is no reason to exclude Foreign Exchange Gain as non-operating. It is also noted that the TPO has considered Foreign Exchange Loss incurred by Assessee on derivative transactions as operating and accordingly reduced it. Therefore, TPO is not consistent in his approach. DRP has also upheld it, without discussing the reasons. 6. ITAT Pune in the case of Dana India Private Limited [2021] 129 taxmann.com 433 has held as under : 13. The next item is foreign exchange fluctuation gain. The assessee treated this amount ....