TaxTMI 
TaxTMI 
2026 (7) TMI 772
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.... 1. The impugned final assessment order has been passed without following due procedure laid down in law, and hence, bad in law. 2 The impugned order of the Ld AO passed pursuant to the order of the Deputy/Assistant Commissioner of Income Tax - Transfer Pricing - 1(1)(1). Bengaluru (hereinafter referred to as the 'Transfer Pricing Officer' or 'Ld. TPO') and the directions issued by the Hon'ble DRP are based on incorrect appreciation of facts and Incorrect interpretation of law. and therefore erroneous, bad In law, and contrary to the facts and circumstances of the case. 3. The Learned AO has erred in assessing the total income of the Appellant at INR 1.83,08,79,830 as against INR 1,10,31,62.580 claimed in return of income filed by the Appellant 4 The Ld. AO erred in determining a sum of INR 26,46,03.895 as balance tax payable by the Appellant. 5 The learned AO has erred in not considering the additional claim made by way of proposed revised return of income prepared based on audited financial statements. Corporate tax grounds 6. Disallowance of deduction claimed under section 80G of the Act [INR 5,43,....
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....idencing the payment made towards gratuity. 7.3 The Learned AO / Hon'ble DRP ought to have observed that the reconciliation of movement in gratuity as per management certified financial statements Is in consonance with the deduction claimed. 7.4 The Learned AO / Hon'ble DRP erred in alleging that bank statement highlighting gratuity payment was not furnished whereas the Appellant had already furnished bank statements highlighting significant gratuity payment made during AY 2020-21. 8. Disallowance of depreciation on additional assets (INR 25.73,588] 8 1 The Learned AO / Hon'ble DRP has erred in law and facts by disallowing depreciation claimed on additions made to fixed assets during the AY 2020-21 8.2 The Learned AO / Hon'ble DRP failed to appreciate the fact that the Appellant had furnished copy of fixed asset register and copies of invoices evidencing additions made to fixed assets 8.3 The Learned AO / Hon'ble DRP erred In holding that the Appellant has not furnished vouchers, proof of assets being put to use whereas the copies of Invoices and fixed asset register was furnished during the course of assessm....
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....pellant in its own case by the jurisdictional Hon'ble Bangalore Bench of the ITAT. 10.8 The learned AO/ Hon'ble DRP erred in not considering various judicial precedents relied on by the Appellant during the course assessment proceedings or that were covered in objections filed before the Hon'ble DRP. 11. Disallowance of certain expenses u/s. 37 of the Act on adhoc basis (INR 3,54,07,509] 11.1 The Learned AO / Hon'ble DRP erred in law and facts by disallowing certain other expenses on ad-hoc basis 11.2 The learned AO / Hon'ble DRP erred in alleging that the Appellant has not furnished ledger extract of the expenses, whereas ledger extracts sought were duly furnished during the course of assessment / DRP proceedings 11.3 The learned AO / Hon'ble DRP ought to have appreciated the submission of the Appellant providing basis for incurring each of the expenses. 11.4 The teamed AO/ Hon'ble DRP erred in not considering various judicial precedents relied on by the Appellant during the course assessment proceedings or that were covered in objections filed before the Hon'ble DRP 11.5 The learned AO/ Hon....
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....Appellant in accordance with the provisions of the Act read with the Income Tax Rules 1962 ("the Rules"), conducting a fresh economic analysts for the determination of the ALP in connection with the impugned international transactions, and holding that the Appellant's impugned international transactions are not at arm's length. 15. The learned TPO! AO/ DRP have erred, in law and in facts, by applying the current year data filter, thereby accepting only those companies whose data is available for FY 2019-20 16. The learned TPO/ AO/ DRP have erred, in law and in facts, by applying different accounting year filter as a comparability criterion e. companies having accounting year other Than March 31 or companies whose financial statements were for a period other than 12 months) 17. The learned TPO/ AO/ DRP have erred in law and in facts, by using employee cost greater than 25 percent of turnover as a comparability criterion. 18. The Learned TPO / AO/ DRP erred, in law and in facts. by using a threshold as high as 75% of export sales to total sales selecting comparable. 19. The learned TPO/A0/ DRP have erred, in law and in facts, by ap....
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....Development Services: 1. Kcube Consultancy Services Private Limited 2. Ksolves India Limited 3. Toss, Technologies Limited 4. DCIS DOT COM Solutions India Private Limited (d) Companies forming part of appellant's TP study contended to be excluded by the appellant: IT enabled Services: 1. Vitae International Accounting Services Private Limited 2. MOL Information Processing Services (India) Private Limited Software Development Services: 1. Great Software Laboratory Private Limited Although some of the Companies were chosen/ not chosen s comparables in the transfer pricing study, In case upon consideration of more details being available in public domain or subsequent decisions any of such companies if found to be comparable/ not comparable for any reasons appellant craves leave to urge the same at the time of hearing. 23. The learned TPO/ AO have erred, In law and in facts, by wrongly computing the operating margins of some of the comparable companies considered in the TP order 24. The learned AO / TPO /DRP have erred, in law and in facts, by not making suitable ad....
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....has erred in Issuing a demand notice under Section 156 of the Act. The Appellant submits that each of the above grounds is independent and without prejudice to one another. The Appellant craves leave to add, alter, rescind and modify the grounds herein above or produce further documents, facts and evidence before or at the time of hearing of this appeal. so as to enable the Hon'ble Tribunal to decide on the appeal in accordance with the law. For the above and any other grounds which may be raised at the lime of hearing. it is prayed that necessary relief may be provided." 3. Though the assessee has raised 33 grounds, but at the time of hearing, the assessee contested ground Nos.16,, 20, 22 (related to only Software Development services) and ground No.30. Therefore, only these grounds are dealt with. 4. Briefly the facts of the case show that assessee is a private limited company providing software development and Information Technology enabled Services [ITeS] to its group company. It supports the different business segments of its parent company. 5. The assessee filed its return of income at Rs. 110,31,62,580 which was selected for scrutiny. The ....
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....he assessee filed objections before the ld. DRP, who passed directions u/s. 144C(5) of the Act on 19.6.2024. Based on those directions, OGE was passed on the TP issues by the ld. TPO on 4.7.2024. 6. The assessee filed objections before the ld. DRP, who passed directions u/s. 144C(5) of the Act on 19.6.2024. Based on those directions, OGE was passed on the TP issues by the ld. TPO on 4.7.2024. TP adjustment of Software Development services was retained of Rs. 4,61,10,759 and ITeS segment of Rs. 32,45,44,966 and interest on receivables of Rs. 15,27,60,591. Based on this, assessment order was passed on 23.7.2024 wherein the total income of the assessee was determined at Rs. 183,08,79,830. According to the final assessment order TP adjustments were retained at Rs. 52,34,16,316 and non-TP disallowance/addition was retained at Rs. 20,43,00937. Against this, the assessee is in appeal before us. 7. As per ground No.16, the challenge of the assessee is that by adopting different accounting year filter, the ld. AO has removed the comparables which are functionally comparable with the assessee and data is available in the public domain. We, after hearing the assessee and the ld. CIT(DR)....
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....erefore the ld. TPO is directed to include this company. 9. In Ground No.22 the assessee has specifically challenged that it is engaged in Software Development services where the total revenue of the assessee is only Rs. 70.44 crores. The assessee has been compared with giant companies whose turnover is manifold higher than the assessee company. The ld. TPO has not applied the turnover filter for the reason that according to him, the turnover cannot have any impact on the margin of the assessee company. 10. We find that in the software development segment, Mindtree Ltd. has a turnover of Rs. 77643 million, L&T Infotech has turnover of Rs. 101842 million, Wipro Ltd. has a turnover of Rs. 503877 million, Tata Elxsi Ltd. has a turnover of Rs. 160986 lakhs, Infosys Ltd. has turnover of Rs. 80000 crores, Tata Consultancy Services has turnover of Rs. 131000 crores and Cybage Software P. Ltd. has turnover of Rs. 173715 crores, therefore these above companies have huge turnover as well as most of them have huge brand value. Thus, these companies cannot be compared with the assessee company. Therefore, the ld. TPO is directed to exclude from comparability analysis of Software Developm....