9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 911 - AT - Income TaxInternational transaction with Associated Enterprises - Adjustment in Arm length Price - Comparables rejected - Software Technology Parks of India Scheme - Short credit of TDS - Interest u/s 234B and 234C - Held that - Eclerx Services Ltd. - The Bangalore Bench of the Tribunal in the case of Symphony Marketing Solutions Pvt Ltd. 2014 (2) TMI 83 - ITAT BANGALORE has followed the decision of Hyderabad Bench in the case of Capital IQ Information Systems (India) Pvt Ltd. 2014 (9) TMI 125 - ITAT HYDERABAD , wherein the Tribunal has held that extraordinary event occurred during the previous year makes the company incomparable. As mentioned here in above, the extraordinary even has taken place in the case of Eclerx Services Ltd which excludes this company as a comparable. We, therefore, hold that this company cannot be considered as comparable. Mold-Tek Technologies Ltd - The appointed date for amalgamation and the demerger were 1.10.2006, and 1.4.2007 respectively. The business and the assets and liabilities of Tech-men Tools Private Limited stand transferred to and vested in Mold Tek Technologies Limited w.e.f.1.10.2006. In our considered opinion, this is definitely an extraordinary event which make this company excluded from final list of comparables on similar lines as discussed by us in the case of Eclerx Services Ltd and the same judicial decision as considered in the case of Eclerx Services Ltd. - The appeal filed by assessee is allowed. Short credit of TDS - In our considered opinion, this issue needs to be verified at the assessment level. We, therefore, restore this issue to the file of AO. The AO is directed to grant credit for the TDS as per TDS certificate furnished by the assessee in the light of the provisions of law. This ground is treated as allowed for statistical purposes. Interest u/s 234B and 234C of the Income Tax Act - In our humble opinion charging of interest is mandatory though consequential in this case. The AO is directed to levy interest as per the provisions of law. - Decided partly in favour of assessee.
Issues:
1. Adjustment made by Income Tax Officer to the assessee's International Transactions of Provision of IT Enabled Services. 2. Selection and rejection of comparables by Transfer Pricing Officer (TPO). 3. Objections raised by the assessee before the Dispute Resolution Panel (DRP). 4. Exclusion of certain companies from the final list of comparables by the Tribunal. 5. Additional grounds of appeal raised by the assessee. Issue 1: Adjustment to International Transactions The appeal was against the assessment order under the Income Tax Act, challenging the adjustment of Rs. 1,04,68,266 to the assessee's International Transactions of IT Enabled Services. The assessee, engaged in ITES, filed the return selected for scrutiny assessment, claiming total income of Rs. 19,92,500. The AO referred the case to the TPO for transfer pricing issues. Issue 2: Selection and Rejection of Comparables The TPO rejected the comparables used by the assessee, listing new comparables with an average of 27.8%. The TPO applied filters for selection, leading to the exclusion of certain companies. The DRP dismissed the assessee's objections regarding the comparables. The assessee argued for multiple year data usage and objected to the TPO's comparables. Issue 3: Objections before DRP The assessee raised objections before the DRP, emphasizing the use of multiple year data and challenging the comparables selected by the TPO. The DRP dismissed the objections, leading to the appeal before the Tribunal. Issue 4: Exclusion of Companies from Comparables The Tribunal accepted the assessee's propositions to exclude two companies from the final list of comparables. Eclerx Services Ltd was excluded due to an extraordinary event of acquisition, deemed non-comparable. Mold-Tek Technologies Ltd was also excluded due to a scheme of arrangement, considered an extraordinary event. Issue 5: Additional Grounds of Appeal The Tribunal allowed the appeal by excluding the two companies and accepting the assessee's propositions, rendering other issues moot. The Tribunal directed the AO to grant credit for TDS and levy interest as per the provisions of the law. This detailed analysis covers the adjustment to international transactions, selection and rejection of comparables, objections before the DRP, exclusion of companies from comparables, and resolution of additional grounds of appeal.
|
