TaxTMI 
TaxTMI 
2025 (1) TMI 1598
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....ssessing Officer ('learned AO'), learned Transfer Pricing Officer (learned TPO') and the Honourable Dispute Resolution Panel ('Hon'ble DRP') grossly erred in law and on facts, in determining transfer pricing adjustment of INR 2,54,55,857 and adding the same to the returned income of the Appellant. Grounds relating to Transfer Pricing: 2. General grounds: 2.1 The learned Assessing Officer ('Learned AO'), learned Transfer Pricing Officer ('learned TPO') and the Honourable Dispute Resolution Panel ('Hon'ble DRP') grossly erred in law and on facts, in determining transfer pricing adjustment of INR 2,54,55,857 and adding the same to the returned income of the appellant. 2.2 The learned AO/ learned TPO/ Hon'ble DRP grossly erred in rejecting the Transfer Pricing ('TP') documentation maintained by the Appellant by invoking provisions of sub-section (3) of section 92C of the Act. 2.3 The learned AO/ learned TPO/ Hon'ble DRP grossly erred in rejecting comparability analysis undertaken in the TP documentation and in conducting a fresh comparability analysis by introducing various filters for the purpose of d....
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.... Hon'ble DRP has grossly erred in not rejecting the following companies: i. Mahindra Consulting Engineers Ltd - should be rejected ii. Genesys International Corporation Ltd - should be rejected iii. Sikraft Infotech Pvt Ltd - should be rejected 3.13 The learned AO/ learned TPO/ Hon'ble DRP has grossly margin computation of the following companies: i. Mahindra Consulting Engineers Ltd - should be rejected ii. Genesys International Corporation Ltd - should be rejected ii. Sikraft Infotech Pvt Ltd - should be rejected 4. GROUNDS RELATED TO INTEREST ON DELAYED RECEIVABLES: 4.1 The learned AO/ learned TPO/ Hon'ble DRP erred in making transfer pricing adjustment of INR 59,55,857 in relation to Interest on Delayed Receivables. 4.2 The learned AO/ learned TPO/ Hon'ble DRP erred in considering the delayed receipts as unsecured loans and imputed notional interest with regard to trade receivables. 4.3 The learned AO/ learned TPO/ Hon'ble DRP erred in not considering that the outstanding receivables cannot be considered as a separate international transaction as it does not fa....
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....ned Assessing Officer erred in law and on facts in disallowing entire expenses of Rs.8,00,000/- for failure to deduct taxes at source under section 40(a)(i) vis-å-vis 30% of the expense to be disallowed as required under section 40(a)(ia) of the Act. 5.4 The learned Assessing Officer ought to have observed that the Appellant had not deducted taxes at source on provision for audit fees payable to Price Waterhouse Chartered Accountants, LLP Bangalore i.e., a resident entity and thereby the provisions of section 40(a)(ia) would be attracted and not section 40(a)(i). 5.5 The learned AO ought to have considered the submission of the Appellant to note that the disallowance reported under clause 21(b) of the Form 3CD has been erroneously disclosed under section 40(a)(i) of the Act as payments to non-residents instead of section 40(a)(ia) as payment to resident which can be affirmed by the PAN and address of the party furnished by the Appellant. 5.6 The learned AO failed to appreciate the fact that the Appellant has already disallowed a sum of Rs. 2,40,000/- (i.e., 30% Rs.8,00,000) in return of income under section 40(a)(ia) and hence, the disallowance woul....
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.... 2. Interest on Delayed Receivables 59,55,857/- Total adjustment u/s 92CA 4,73,72,422/- 3.1 Accordingly, the AO made an addition of Rs.4,73,72,422/- and passed the draft assessment order. Aggrieved with the draft order of AO, the assessee preferred its objection before the ld. DRP. The Id. DRP vide its order dated 6.6.2024 directed the TPO for making certain adjustments and passed the order accordingly. However, the Id. TPO without considering the directions of the ld. DRP framed a fresh TP order on 10.7.2024, modifying the addition of Rs.4,73,72,422/- to Rs.2,54,55,857/- and thereafter, the AO framed the assessment accordingly. 3.2 Aggrieved with the order of the AO, assessee has come up in appeal before us and has raised the above-mentioned grounds. 4. So far as ground No.1 is concerned, i.e. with respect to the limitation issue of the impugned order, the counsel for the assessee has drawn the attention of the bench towards letter dated 22.12.2024 and contended that the assessee has already withdrawn this ground. Therefore, the ground No.1 is dismissed as withdrawn. 5. Ground No.2 is general in nature. 6. In ground No.3, the assessee has....
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....ich have been considered by the ld. DRP and TPO are not for M/s. Satyam Venture Engineering Service Pvt. Ltd. alone, rather have contained the result of its subsidiaries also. Further, it is settled position of law that if a contention has been accepted by the revenue in subsequent year, then the same is to be applied in the previous year also because there has to be certainty and uniformity in the approach of revenue in respect of matters which can effect FDI. Reference can be made to the judgement of Hon'ble Delhi High Court in the case of Crane UK Holdings Ltd. Vs. DIT (359 ITR 268), wherein the Hon'ble Delhi High Court in para 35 has categorically observed as under: 8.2 Therefore, we are of the view that M/s. Satyam Venture Engineering Service Pvt. Ltd. shall be included in comparable list. We further observe that if this comparable alone is included in the list of comparables relied upon by the assessee, then the assessee will get desirable ALP and there is no need to include the other comparables (as contended by the AR of the assessee). Therefore, we direct the TPO to conduct a fresh TP study after including this comparable for determining the ALP. So far as the inclusion....
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....cceptable to the assessee in place of LIBOR+450 points as computed by the ld. TPO. Ld. Counsel fairly conceded that he would not like to press the issue whether this transaction is an international transaction or not. 13. Ld. D.R. relied upon the orders of authorities below. 14. We have considered the rival submissions and perused the materials available on record. Considering the facts and circumstances of the case, we are of the view that LIBOR+200 basis points are legally justifiable with respect to the transaction of interest on delayed receivables. Our view is fortified by the judgement of coordinate bench in Bio Plus Life Science Vs. DCIT reported in 138 taxmann.com 297, Value Momentum Software Pvt. Ltd. Vs. ACIT 163 taxmann.com 14 (Hyd). Therefore, this ground of assessee is partly allowed as indicted above. 15. In ground No.5, the ld. Counsel for the assessee has contended that the CPC while processing the return u/s 143(1) of the Act has made an adjustment of Rs.8 lakhs by disallowing the payments made to a non-resident for conducting the audit of the assessee company on the ground that the assessee failed to deduct TDS and hence as per the provisions u/s 40(a)(i)....