9911796707
TMI Blog2020 (9) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... AO') has erred, in passing the assessment order under section 143(3) read with section 144C of the Income-tax Act, 1961 ('the Act') after considering the adjustments proposed by the learned Transfer Pricing Officer ('TPO') in his order passed under section 92CA(3) of the Act and subsequently confirmed by the Hon'ble Dispute Resolution Panel ('DRP'). Each of the ground is referred to separately, which may kindly be considered independent of each other and without prejudice to each other. That on the facts and circumstances of the case and in law, 1. The TPO/AO/DRP have erred, in law and on facts and circumstances of the case in making an adjustment of INR 1,00,69,37,657 to the total income of the appellant, without the existence of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter-company transaction, to hold that the same is not at arm's length 7. The TPO/AO/DRP have erred in proposing the adjustment to the income of the appellant for AY 2013-14, by arbitrarily 7.1 rejecting the economic analysis undertaken by the appellant as part of its Transfer Pricing documentation; 7.2 not appreciating the fact that appellant's economic analysis and determination of ALP of its international transactions is consistent with its FAR profile; and 7.3 Not appreciating the fact that the applicant, even after allegedly being characterized as a risk bearing entity, is earning a higher operating margin in comparison with the comparable companies bearing routine risks, as demonstrated in the economic analysis. 8. The TPO/AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter to the TPO for determination of ALP of the international transactions. The TPO during the TP assessment proceedings noted that the assessee has entered into the following international transactions:- Sr. No. Name of Transaction Amount 1 Purchase of Fixed Assets 649,169 2 Provision of network connectivity services 2,369,310,891 3 Availing of network connectivity services 2,957,877,426 4 Cost reimbursement paid/payable 6,646,305 5 Interest Received/ receivable on overdue receivables 48,114,854 4. The TPO noted that BTGC India, incorporated on 8th October 1992 acquired a license to act as an international telecom carrier operating in India. The assessee carries international telecom traffic in and out of India. BTGC Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g has been worked at Rs. 153.94 Cr in the working of TPO given in the order for assessment year 2010-11. This undiscounted value of pre-restructuring profit has been considered as the ALP by the TPO for this year. The assessee has shown the income of Rs. 53.24 Cr. in A Y 2013-14. The difference of these two figures amounting to Rs. 100.69 Cr. has been proposed as adjustment u/s 92CA for the relevant year under consideration on protective basis. Since, the addition on substantive basis by considering the discounted cash flows of this year in AY 2010-11 is sub- judice, to protect the interest of revenue, the protective adjustment on the basis of undiscounted prerestructuring profits made by the TPO is justified. DRP is not inclined to interfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat since the transactions under consideration has already been brought to tax on substantive basis in MAP resolution dated 29th January, 2018 there is no basis for protective adjustment. Accordingly, the addition was deleted. He accordingly submitted that for the present assessment year also, the protective addition made by the AO / TPO which has been upheld by the DRP should be deleted. 10.1 Ld. DR on the other hand submitted that the MAP resolution came after the orders passed by the AO/TPO/DRP. He accordingly submitted that he has no objection if the matter is restored to the file of the AO/TPO for determination of the issue afresh in the light of the MAP resolution dated 29th January, 2018. 11. We have considered the rival arguments ..... X X X X Extracts X X X X X X X X Extracts X X X X
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