TaxTMI 
TaxTMI 
2025 (10) TMI 434
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....ax (Appeals)-43 [CIT(A)], New Delhi dismissing the appeals against the orders dated 30.04.2014 and 04.02.2016 passed by the Assessing Officer (AO) under Section 143(3) read with 144 C and order under Section 154 read with Section 143(3) of the Income Tax Act, 1961 (Act) respectively. 4. The appeal before the ITAT filed by the respondent/assessee was to set aside the impugned order 12.10.2018 of the CIT(A) challenging the orders passed by the Transfer Pricing Officer (TPO)/Assessing Officer qua the Assessment Year 2010-11. The grounds urged by the respondent/assessee before the ITAT have been noted at paragraph 2 of the impugned order. Similarly the grounds of appeal before the ITAT by the Revenue/appellant are at paragraph 3. 5. The respondent/assessee/ FIS Global Business Solutions India Private Limited (formerly eFunds International '1ndia Private Limited), was incorporated in July 1997 and operates as a software development centre for the group companies and a dedicated provider of Business Processing Outsourcing (BPO) services to its Associate Enterprises (AE). The asssesse operates the following business division;- I. Software Development Centre (SDC), Chenn....
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....Rs. 17,80,96,798/-. 9. The TPO also proposed an adjustment on account of interest to be received by the assessee on loan advanced to the AE at the rate of 14.88% per annum at Rs. 7,85,01,217/-. 10. The matter was taken before the CIT (A), which partly allowed the same by excluding five comparables and thereby reduced the adjustment from Rs. 17,80,96,798/- to Rs. 14,93,29,567/- in the SDC segment. Further, in the ITES segment, it reduced the adjustment from Rs. 54,74,08,012/- to Rs. 4,04,57,154/- by rejecting two comparables and also deleted the addition of Rs. 7,85,01,217/- and Rs. 49,15,912/- on account of interest receivables and loans advanced to its AE and on account of foreign travel expenses. 11. Consequently, TPO/AO after giving effect to the order passed by the CIT (A) made the adjustment of Rs. 14,93,29,567/- and Rs. 4,04,57,154/-. 12. Feeling aggrieved by the order, the parties herein had filed cross appeals before the ITAT. It is noted that the assessee here had not pressed the grounds regarding transfer pricing adjustment made by the AO/TPO/CIT (A) and sought relief on the basis of Advance Pricing Agreement (AP Agreement) entered into with Central Board of D....
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....dered view that contention raised by the Id. DR is not tenable for the reason that when undisputedly there is no change in the FAR of the taxpayer in the year under assessment vis-a-vis years covered under APA and consolidated margin (OP/OC) computed as per APA at 19.26% is much more than the consolidated margin agreed upon between the taxpayer and the CBDT for the years covered under APA at 16.60% for both the segments, APA though not specifically applicable to the year under assessment, is having persuasive value to the dispute between the parties for other years. 23. Hon'ble Delhi High Court in the case of PCIT vs. Ameriprise India Pvt. Ltd. (supra) held that when under the APA entered into between the taxpayer and the CBDT under section 92CC aforementioned cost plus pricing methodology has been implicitly accepted, the APA has persuasive value to the dispute in question for other years. 24. Coordinate Bench of the Tribunal in the case of 31 India Private Ltd. vs. DCIT (supra) also relied upon APA entered into between the taxpayer and the CBDT for the subsequent years and has held as under : 18 Whence, on similar functions and the transactions the ....
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....ears and subsequent years, application of most appropriate transfer pricing method and arm's length price of these transactions have already been agreed upon between the taxpayer and CBDT and there is no change in the FAR and nature of international transactions entered into during the year under consideration vis-a-vis earlier years and subsequent years, principle laid down in the APA for benchmarking the international transactions in question shall have a guidance value. More so these days, it is endevour of the Union of India to stop avoidable litigations and this case falls in the category of cases where litigation can be minimized. 27. For the sake of repetition, it is brought on record by the taxpayers the consolidated margin (OP/OC) for the year under assessment as 19.26% as against ALP agreed upon between the parties to the appeal under APA at 16.60%. So, we are of the considered view that transfer pricing adjustment made by the AO/TPO/CIT(A) by applying Transfer Pricing principles is not sustainable, hence ordered to be deleted subject to the verification of computation of margin made by the taxpayer as per APA referred in the preceding para no.20. Consequentl....