TaxTMI 
TaxTMI 
2025 (8) TMI 1323
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....om the record evident from the transfer pricing order dated 28th January 2025 passed under section 92CA of the Act for the said assessment year. 2. The Petitioner is engaged in the business of providing Information Technology ('IT') services and Information Technology Enabled Services ('ITeS'), with 90% of its revenue from exports. It typically provides software development and consultancy services directly to customers. While it normally undertakes it's contractual obligations itself, at times, it sub-contracts part of the overall work to its subsidiaries, viz., Associated Enterprises ('AEs') worldwide. In such cases, the AEs generally undertake onsite services and customer relations, while the Petitioner undertakes offshore tasks ('Sub....
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....venue: Rs. 36,327.08 crores, Operating Cost: Rs. 29,938.50 crores, Operating Profit: Rs. 6,388.58 crores). The Subcontracting charges constituted 38.11% of total operating costs of Rs. 29,938.50 crores, which costs included transactions with AEs as well as Non-AEs. The Petitioner determined the arms' length margin ('ALP') range: 15.71% to 24.95% and the median of 19.04% using 11 comparables identified by it. As the Petitioner's margins were within the ALP range, as per the Petitioner, the subject international transaction (subcontracting charges and other aggregated transactions along with it) was at arms' length, and no transfer pricing adjustment was warranted. 6. Respondent No. 1 passed the transfer pricing order under section 92CA of....
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....ricing adjustment must be calculated only on international transactions and not the entire turnover/costs in view of the express language of section 92 of the Act. In it's application dated 5th February 2025, an indicative working was provided, wherein accepting as proper, for the sake of argument, the working of Respondent No. 1, the adjustment was restricted to transactions with AE's, being 38% of the Petitioner's Operating Costs, the TP adjustment ought to have been Rs. 7,08,19,72,707/- and, thus, an erroneous adjustment had been made by Respondent No. 1 of Rs. 11,55,90,71,049/- (difference between Rs. 18,64,10,44,116/- and Rs. 7,08,19,72,707/-). 8. While the rectification application was pending, a draft assessment order was passed u....
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.... assessee requires proper verification which is not within the purview of section 154 of the Act. 7. The contention of the assessee as per the rectification application has been carefully perused. The assessee has also relied on the aforesaid judgement of Hon'ble Bombay High Court, thereby raising a legal concern. It is pertinent to note that rectification order can only be passed in the case of a mistake apparent from record and not by relying on case laws. However, the contentions of the assessee made in this rectification application does not come under the preview of 'Mistake apparent from record' as discussed above." 10. Counsel for the Petitioner states that out of abundant caution and in order to safeguard against limitat....
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....cts India Limited (Income Tax Appeal No. 362 of 2014 dated 14th September 2016) and (ii) CIT v. Goldstar Jewellery Design (P.) Ltd. [2016] 388 ITR 510. According to Counsel, an order passed ignoring the judgment of a jurisdictional High Court is a 'mistake apparent on the record' and, rectifiable. As Respondent No. 1 failed to rectify his order, the present petition ought to be allowed. 12. Counsel for the Respondent however defends the action of the Revenue. It is contended that an appeal lies from the impugned order, which has been passed under section 154 of the Act in accordance with the Petitioner's application, and further that Respondent No. 1 had correctly worked out the adjustment on international transactions undertaken between....