TaxTMI 
TaxTMI 
2026 (10) TMI 195
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....n 260A of the Income Tax Act, 1961 [the Act] impugning a common order dated 17.10.2025 passed by the learned Income Tax Appellate Tribunal [ITAT] in IT(TP) A No.2031/Bang/2024 and IT(TP) A No.1858/Bang/2024 for Assessment Year [AY] 2013-14. The appeals before the learned ITAT were cross-appeals preferred by the Assessee as well as the Revenue against the order dated 31.07.2024 passed by the learned Commissioner of Income Tax (Appeals)-12, Bengaluru [CIT(A)] under Section 250 of the Act. ITA No.97/2026 arises from the Revenue's appeal before the learned ITAT and ITA No.96/2026 arises from the Assessee's appeal. 2. The Assessee company had filed its return of income for AY 2013-2014 on 27.11.2013 declaring an income of Rs.21,34,01,....
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.... be assessable as income in the hands of the Assessee. The AO reasoned that receiving the said assets free of cost was a benefit or perquisite with monetary value, arising from business, and thus required to be included in the Assessee's income chargeable to tax. 6. The Assessee appealed the assessment order before the CIT(A). The said proceedings culminated in an order dated 31.07.2024. Insofar as the addition of amount of Rs.7,73,50,917 on account of fixed assets received by the Assessee from its AE is concerned, the CIT(A) faulted the AO in making addition of the entire amount. The learned CIT(A) held that the AO ought to have made an addition to the extent of 12% of the value of the fixed assets, that is 12% of Rs.7,73,50,917, as....
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....ture in directing TPO for exclusion of companies from the set of comparables selected by the Transfer pricing officer by following earlier decision ignoring that the TPO had chosen comparables as per parameters set out in Rule 10B? 2. Whether on the facts and in circumstances of the case, the Tribunal was correct in applying an upper turnover filter selectively to certain comparables while retaining other comparables having turnover significantly exceeding Rs.200 crores, thereby rendering the comparability analysis internally inconsistent? 3. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in demanding comparability standards that may itself defeat the purpose of law relating to det....
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....nabled the assessee to carry on its business activities and derive economic advantages without incurring corresponding expenditure?" 11. The learned counsel appearing for the Revenue fairly stated that the first question is a general question and covered under the subsequent questions. 12. Question No.2 relates to the use of a turnover filter exceeding Rs.200 crores. The learned ITAT had upheld the exclusion of Persistent Systems Ltd., Larsen & Toubro Infotech Ltd. and Mindtree Ltd. from the set of comparables, inter alia, on the ground that their turnover exceeded Rs.200 crores. The learned TPO had used a filter of a minimum turnover of Rs.1 Crore but had not used any filter regarding the maximum turnover. The Act and the Rules do no....
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.... compared to an average of 4.05% in the case of the comparable companies. The learned ITAT accepted that there was a significant difference in depreciation cost due to variations in asset types, technology, and investment levels. Therefore, it considered it apposite to exclude the said element of depreciation when comparing the real value of the PLIs. 16. Since the issue is squarely covered by the decision of this Court in PCIT (supra), no substantial question of law arises for consideration of this Court. 17. Question Nos. 5 and 6: The learned TPO had excluded the provision for bad and doubtful debts from the operating expenses while computing the PLI, which was contested by the Assessee. There is no provision in the Rules for exclud....
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.... in this regard. 19. Question No.8 relates to the addition made by the AO under Section 28 (iv) of the Act in regard to fixed assets provided free of cost. The Assessee filed submissions explaining that the fixed assets received from the related entity were not part of its income. It claimed that during the financial year ended 31.03.2013, the Assessee received certain capital goods, which were duly disclosed but not included as assets in the financial statements. The capital goods comprised testing equipment for testing the software developed by the Assessee for supply to its AE. Thus, the goods were essentially for the use of the AE. The Assessee also explained that it never acquired any title or ownership of those capital goods, that ....