AI Drafter 
TaxTMI 
TaxTMI 
2026 (4) TMI 1767
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....2024 in pursuant to the order of the Learned Transfer Pricing Officer (in short "Ld. TPO") under section 92CA(3) of the Act and the Ld. Dispute Panel Resolution (in short "Ld.DRP") directions dated 28.05.2024 and pertains to the A.Y. 2020-21. 2. The grounds raised by the assessee read as under: "1. On the facts and in the circumstances of the case and in law, the assessment order of the Learned Assessing Officer (Ld. AO') dated 26 June 2024 passed under Section 143(3) read with section 144C(13) read with section 144B of the Income-tax Act, 1961 (the Act) in respect of AY 2020-21, is arbitrary, contrary to law, and liable to be quashed. 2. (a) On the facts and in the circumstances of the case and in law, the Learned ....
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.... solely due to the unforeseen circumstances, therefore, prayed to condone delay of one day occurred in filing the appeal in the interest of justice. 4. Ld. CIT-DR for the Revenue, Dr. Narendra Kumar Naik, on the other hand, objected for condonation of delay. 5. We have heard both the parties, perused the petition and affidavit filed by the assessee seeking condonation of delay of one day in filing the appeal before the Tribunal. We find that, the reasons explained by the assessee appear to be genuine and bona fide and come under 'sufficient cause'. We further find that, the Hon'ble Supreme Court in the case of Collector, Land Acquisition v. MST Katiji, reported in 167 ITR 471, has laid down certain principles for condoning the del....
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....,07,17,675/- on account of Restricted Stock Units (in short "RSU") allotted to the appellant's employees by its ultimate parent company, Facebook Inc. 7. Thereafter, the A.O. passed a Draft Assessment Order under section 144C)(1) of the Act on 30.08.2023 and proposed T.P. Adjustment as suggested by the Ld.TPO under section 92CA(3) of the Act. The appellant filed objection against proposed T.P. Adjustments before the Ld. DRP. The Ld.DRP vide directions under section 144C(5) of the Act dated 28.05.2024 directed the A.O. to compute the arm's length margin in the range of 13.93% to 23.61% with a median of 18.94% and consequently held that the mark-up of 15% earned by the appellant on costs, for the provisions of marketing and customer Suppor....
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....Options Plan (in short "ESOP") by taking into account 30% of TDS deducted on said value and arrived at a value of the perquisite at Rs. 9,63,16,480/- and mark-up of Rs. 1,82,42,341/-. The Ld.Counsel for the assessee submitted that the ESOP given to employees of the appellant company are directly issued by the parent of AE to its employees and no cost was actually incurred or cost charged towards the ESOP to the appellant. Further contractual agreement between the appellant and its AE clearly shows and excludes the income tax and any other taxes from the cost base for the services rendered by the appellant to its AE. The mark-up at 15% earned on the entire cost reflected in the Profit and Loss Account clearly shows that no cost was incurred ....
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....pellant had given ESOP to the employees of the appellant company and the assessee has not incurred any cost. However, from the ESOP given by the parent company to employees of the appellant company it cannot be ruled out appellant must have received some benefit and the same needs to be ascertained, and a suitable mark-up should be added. Since the appellant has derived the benefit indirectly from the ESOP given by its parent company to its employees, the TPO has rightly made adjustment in respect of the ESOP. The Ld.DR further submitted that considering the relevant facts, the Ld. DRP. has rightly sustained the additions made by the Ld.TPO. Therefore, he submitted that the adjustment made by the A.O. / Ld.TPO should be sustained. 11. We....
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....does not ipso facto create a liability in the hands of the Indian company. Since the appellant has not incurred any cost in respect of the ESOP allotted to its employees the adjustment made by the A.O on the basis of hypothetical value of benefit by taking into account the total value of the perquisites in the hands of the employees and making a mark-up is totally contrary to the scheme of T.P. Adjustments and Rule 10B(1)(e)(i) of I.T. Rules, where it provides the net profit margin shall be computed in relation to costs incurred and the term "incurred" signifies a real financial obligation or an outflow of resources. In the present case, the appellant did not part with any funds to acquire the shares, nor did it record any liability in its ....