TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 271
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....2. On facts and in law, the impugned order passed by AD and order dated 26 September 2024 passed by TPO after giving effect to Hon'ble DRP's directions u/s 144C of the Act, is in clear contravention to directions issued by the DRP. a. That the TPO/AO, while imputing the TP adjustment, have erred in incorrectly computing the quantitative filters of certain comparable companies, despite the explicit direction given by the DRP for re-verification of such filters, and disregarding the Appellant's submission on the corrected computation from the respective audited financial statement of such companies b. That the TPO/ AO have erred in incorrectly computing the operating profit margin of certain comparable companies, which have been finally selected for determining the arm's length price, and in complete ignorance of the data available as per audited financials of the comparables, despite explicit direction given by the DRP for doing the needful. c. That TPO/AO have erred in not allowing the working capital adjustment to the Appellant, despite explicit direction given by the DRP for doing the needful, thereby contravening the provisions of Rule ....
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.... INR 111,690/-. 12. On the facts and circumstances of the case and in law, the AO erred in issuing the impugned order beyond the time-limit as prescribed under section 153 of the Act. The final assessment order is, thus, time-barred, and liable to be quashed. 13. On facts and in law, the Ld AO/Ld. TPO erred on fact and in law in initiating penalty under section 270A of the Act." 3. The assessee is an Indian Private Limited Company engaged in the business of marketing and distribution of Peering Software and Licensing Services for the right to use Computer Software and data base. During the period relevant to Assessment Year 2021-22, the assessee entered into following international transactions with its Associated Enterprises [A.E.]. International Transaction Amount (In Rs. ) Operational Expense (Payment towards technology and management support) 10,32,25,426 To determine Arm's Length Price [ALP] of the aforesaid transaction, the assessee applied Transactional Net Margin Method [TNMM] as the most appropriate method. Following filters were applied for selection of the comparables: (a) Companies having reported net sales equal to or more t....
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.....11.2025, for not pressing the legal ground on the issue of limitation. In light of the statement made by ld. Authorised Representative [AR] of the Assessee at Bar and the aforesaid application filed by the assessee, ground of Appeal No. 12 is dismissed as not pressed. 5.1 The ld. Counsel further submits that the assessee is primarily aggrieved by inclusion of some of the comparable companies, hence, in ground No. 5 & 6 of appeal, the assessee is seeking exclusion of some of the companies selected by the TPO in the final list of comparables, as under: (a) Peoplelink Unified Communications Pvt. Ltd. - The ld. AR submits that the DRP in its directions had categorically held that the said company is functionally different. The company is primarily engaged in the business of providing video-conferencing solutions for different industries. FAR of the said company is different from the assessee. Hence, it is not a good comparable. Despite specific directions from the DRP, the AO has not excluded the said company from the final list of comparables. (b) Zoho Corporation Pvt. Ltd. - The ld. AR submits that during F.Y. 2020-21 & 2019-20, the said company reported RPT/....
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....d an application u/s 154 of the Act, seeking rectification on 23.10.2024 before the TPO. Since, the said application of the assessee has been disposed off by the TPO, this Ground has become infructuous. 6 Per contra, Shri Dharam Veer Singh, representing the Department, strongly supporting the Assessment Order, prayed for dismissing appeal of the assessee. 7 We have heard the submissions made by rival sides and have examined the orders of the authorities below. The assessee in appeal has primarily assailed inclusion of some of the comparables in final list by the TPO for benchmarking international transaction undertaken by the assessee during A.Y. 2021-22. In grounds of appeal No. 5 & 6, the assessee has prayed for exclusion of some of the companies shown in the final list of comparables. Our findings on the submissions made by the assessee in respect of exclusion of the company is as under: (a) Peoplelink Unified Communications Pvt. Ltd - We find that the DRP has directed for exclusion the said comparables observing as under: "The comparable is primarily into the business of providing video conferencing solutions for different industries. FAR is different fr....