TaxTMI 
TaxTMI 
2026 (8) TMI 1663
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....r of Income Tax, Circle-1(1)(1), Bangalore, under section 143(3) read with sections 144C (5) and 144C(13) of the Income-tax Act, 1961. The order was passed pursuant to the directions of the learned Dispute Resolution Panel-1, Bangalore dated 19 November 2015, and determined the assessee's total income at Rs. 68,342,116, as against the returned income of Rs. 24,459,626. The assessee had also challenged the draft assessment order dated 19 February 2014, including the adjustment of Rs. 34,342,675 made towards the arm's length price of the international transactions. 2. The assessee has raised the following grounds of appeal: [ITA No. 245/Bang/2016]: 1. The Assessing Officer ("AO"), in pursuance of the Transfer Pricing Order ("TP Or....
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.... (TP Study") and those proposed during the course of the transfer pricing assessment proceedings for the purposes of inclusion or exclusion of respective Comparables; 5. The AO, in pursuance of the TP Order and the directions of the DRP, erred in law and on facts, in adopting the fresh filters for the purposes of inclusion or exclusion of respective Comparables; 6. The AO, in pursuance of the TP Order and the directions of the DRP, erred in law and on facts, in excluding, FAR Analysis wise similar and compatible Comparables, selected and proposed by the Appellant, through application of appropriate filters, in its TP Study and during the course of transfer pricing assessment proceedings; 7. The AO, erred in law an....
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.... expenses of Rs. 12,887,052, and recovery of reimbursement of Rs. 1,769,796. 5. It filed its return of income on 30 November 2011 declaring total income of Rs. 24,459,626, and the case was selected for scrutiny by issuing notice under section 143(2) of the Act. The Assessing Officer referred the international transactions to the Deputy Commissioner of Income Tax (Transfer Pricing)-1(1)(1), Bangalore, i.e., the learned Transfer Pricing Officer, for determination of their arm's length price. 6. On examining the transfer pricing documentation, the learned TPO noted that the assessee had characterised itself as a reseller, adopted the Transactional Net Margin Method as the most appropriate method, benchmarked the transactions against 18 c....
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....acterised the assessee as an ITeS service provider. Since there is no change in the facts and circumstances of the case or in the assessee's FAR profile, we find no basis for the DRP's departure from its earlier order. The DRP has also given no reasons for agreeing, in this year, with the learned TPO's characterisation of the assessee as an ITeS service provider. Accordingly, the directions of the learned DRP, being unsupported by reasons, cannot be sustained. 11. During the hearing, the learned authorised representative produced a copy of the unilateral Advance Pricing Agreement dated 10 December 2024, entered into with the Central Board of Direct Taxes under section 92CC of the Income-tax Act, 1961. He submitted that, for assessment ye....
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....RP's direction treating the assessee as an ITeS service provider is without merit and cannot be upheld. 14. The Advance Pricing Agreement dated 10 December 2024, produced before us, covers assessment years 2012-13 to 2015-16 and not the impugned assessment year 2011-12. Strictly speaking, therefore, its findings do not govern the determination of the arm's length price for the international transaction undertaken in assessment year 2011-12. However, while entering into the APA, the Central Board of Direct Taxes examined the assessee's functions, assets, and risks, accepted the Transactional Net Margin Method as the most appropriate method, and, after analyzing the critical assumptions, characterised the assessee as a reseller. The APA al....