2025 (12) TMI 197

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the case and in law, the Tribunal is justified in deleting the addition on account of mark-up on out-of-pocket expenses incurred by the appellant without appreciating that the expenses related to salary and other expenses are part of cost of services rendered and therefore assessee shall have charged the same mark-up on this cost? (b) Whether on the facts of the case and in law, the Tribunal is justified in holding that Transfer pricing Officer had failed to apply the method prescribed under law to benchmark the transactions mark-up on out-of pocket expenses incurred by the appellant without appreciating that the Transfer Pricing Officer considered the expenses related to salary and other expenses as part of cost of services rende....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ing any method other than what the TPO has followed. This was not the contention raised on behalf of the Revenue before the Tribunal. The Revenue basically conceded that the prescribed methods were not followed, but requested another opportunity to follow the correct method this time. 7. Therefore, the argument now sought to be raised before this Court was not the one which was raised or involved before the ITAT. Incidentally, this is not even the question which is formulated in the Appeal Memo. 8. Given the above circumstances, we do not think this Appeal involves any substantial question of law warranting its admission. 9. However, if in future, such questions arise or are involved in any appeal, we clarify that we have left thei....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ome being reduced by the amount of income in respect of the issues against which the Appeal is intended to be filed (hereinafter referred to as "disputed issues"). He therefore submits that the tax effect in this case would be hardly Rs. 10,18,145/- and the Revenue should not pursue this Appeal. 17. The connected Income Tax Appeal No. 1087 of 2024 was considered by us and has been dismissed. Therefore, the tax effect in this Appeal would be only Rs. 10,18,145/-. 18. However, if some credence has to be given to the aggregate tax effect for the year under consideration, the same has to be in the context of the expression "tax effect" defined in paragraph 5.1 of the CBDT Circular of 15 March 2024. Paragraph 5.1 reads thus:- "5.1....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Thus, effectively, the tax effect in the context of the issue raised in the Appeal is only Rs. 10,18,145/-. 21. Therefore, we are satisfied that the tax effect in this case is nowhere near the ceiling of Rs. 2 Crores provided in the CBDT Circular. This Appeal can be disposed of on the ground of low tax effect by keeping open the questions of law raised in this Appeal. 22. Mr Naniwadekar has submitted that the ITAT has recorded factual findings; therefore, for the assessment year 2011-12, the assessee had earned no exempted income. He submitted that if this is so, there was no question of the assessee either making any expenditure for earning this income and consequently, there was no further question of the Revenue making any disallow....