9911796707
TMI Blog2014 (2) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... o the TPO for fresh adjudication – Decided in favour of Assessee. Selection of comparables – Held that:- Since the issue relating to classification of the assessee remitted back to the TPO and since the final classification of the assessee IT and ITES company or only ITES Company, would have an impact on the selection of comparables – thus, this matter also remitted back to the TPO for adjudication. Claim of pre-operating expenses as part of operating cost – Held that:- The assessee's claim cannot be accepted as the facts and materials on record shows that the assessee was incorporated as a company on 17-1-2007, it has been clearly mentioned that the assessee company has commenced its operations from 1st April, 2007 and hence when th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as a captive service provider. For the assessment year under dispute, the assessee filed is return of income on 20-9-2008 declaring a total income of Rs.74,180/- after claiming deduction u/s 10A of the Act. During the course of scrutiny assessment proceedings, the Assessing Officer noticing that the assessee has entered into international transactions with its AE made a reference to the Transfer Pricing Officer (TPO) for determining the ALP of the transaction. In the TP study report, submitted along with return of income, the assessee had admitted revenue from international transaction with its AE as under: (i) Provision of IT services Rs.78,59,17,730 (ii) Reimbursement of expenses Rs. 3,73,14,81 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,139 and also recomputed the deduction claimed u/s 10A of the Act by excluding communication expenses from export turnover. The assessee raised objection against the draft assessment order before DRP. The DRP after considering the objection of the assessee directed the Assessing Officer to exclude two of the comparable companies like Mold Tek Technologies Limited and Coral Hub Limited from the list of comparables. The DRP also allowed assessee's claim with regard to amortisation of goodwill. On the basis of the order passed by the DRP, the Assessing Officer passed the final assessment order by determining the income at Rs.13,49,46,840/- which included the addition on account of transfer pricing adjustment amounting to Rs.13,39,06,350/-. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on his issue. 8. We have considered rival submissions of the parties and perused the material on record as well as orders of the authorities below. On perusal of the order passed by the TPO, it is seen that the assessee has been categorised as ITES Company. According to the TPO, companies within the category of data processing services come within the back office operation as per the CBDT Circular No. SO 890 (E) dated 26-9-2000. He therefore held that the overall business of the assessee is ITES. This view of the TPO was also upheld by the DRP. However, considering the averment made in the affidavit submitted before us as well as the accompanying documents, we are of the view that the matter is required to be considered afresh by the TPO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that during such period in addition to regular operating expenditure, the assessee has incurred additional expenses on the new premises though not occupied namely rentals, electricity and maintenance etc., till the time the infrastructure was built. It was submitted that the said expenditure incurred which is in the nature of setting up cost has been considered as non operating expenditure by the company as no customer would pay the initial set up cost. It was submitted that on 31st March, 2008 the company has obtained the actuarial valuation certificates for ascertaining the liability on account of 'gratuity' and 'privileged leave' and accordingly revisited the opening figures. It was submitted that difference, being a prior period, has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In support of such contention, the learned AR has relied upon the following decisions: (i) CIT v. Gem plus Jewellery India Ltd. [2011] 330 ITR 175 (Bom.) (ii) CIT v. Dell International Services India (P.) Ltd. [IT Appeal No. 70 (Kar.) of 2009] (iii) ITO v. Sak Soft Ltd. [2009] 30 SOT 55 (Chennai) (SB) (iv) Patni Telecom (P.) Ltd. v. ITO [2008] 22 SOT 26 (Hyd.). 15. After considering the submissions of the assessee in the light of the ratio laid down in the aforesaid decision, we are of the view that the issue is squarely settled in favour of the assessee. We therefore direct the Assessing Officer to re- compute the deduction claimed u/s 10A of the Act after reducing communication charges both from the export t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
