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TMI Blog2017 (2) TMI 1471X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the same can be recovered by separate proceedings but the same cannot be disallowed u/s. 43B, as the said TDS is not allowable deduction to assessee. It is out of the payments payable to contractors/salaries, TDS is being deducted on behalf of the government. Since the TDS amount itself is not a claim made u/s. 37(1), disallowance of the same does not arise. AO is directed to delete the same. Interest on short term deposit - contention of the Ld. Counsel that the amount as shown in Form 26AS was only ₹ 4,05,38,239/-, whereas assessee offered ₹ 4,09,27,183/- which was more than amount shown in Form 26AS - HELD THAT:- We have examined the petition u/s. 154 filed before the AO as well as the contentions before the DRP and the copy of the Form 26AS filed before us at page 76. The basis for the AO s observation of higher amount is not forthcoming from the record. In spite of direction from the DRP, AO has not followed the verification or the petition u/s. 154 was disposed-off. We are of the opinion that there is no basis for making such addition, after verification of the details filed by the assessee. Accordingly, AO is directed to delete the amount. Short TDS credit - H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ini Chandran, DR ORDER B. Ramakotaiah, These are cross-appeals by Assessee and Revenue for the AY. 2010-11 against the order of the Assessing Officer (AO) U/s. 143(3) r.w.s. 144C of the Income Tax Act [Act] consequent to the directions of the Dispute Resolution Panel (DRP) dt. 28-10-2014. 2. Brief facts of the case are that, assessee-company, ADP India, a wholly owned subsidiary of ADP Inc., USA (together with its Group companies referred to as ADP Group or the AE ), was setup to provide software and IT enabled services (ITES) to the ADP Group. After the order of the AO, the company M/s. ADP Pvt. Ltd., has amalgamated with M/s. Automatic Data Solutions and Technology Services Pvt. Ltd., vide the orders of High Court of Judicature at Hyderabad w.e.f. 01-11-2015. Assessee has filed revised Form 36A and revised cross-objection before the ITAT. Accordingly, the name of the company has been taken as M/s. Automatic Data Solutions and Technology Services Pvt. Ltd., 2.1. For the AY. 2010-11, assessee filed its return of income on 13th October 2010 with an income of ₹ 50,87,04,320/- after claiming deduction of ₹ 18,47,85,336/- u/s 10A of the Act in respect of profit from Pune ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever accepted certain companies selected as not comparable. It also gave directions to verify on many issues. Revenue is aggrieved on the deletion of three comparables where as Assessee is aggrieved on issues which DRP has not accepted or AO has not followed the directions of DRP. These are considered in respective appeals. Appeal of Revenue in ITA No. 443/Hyd/2015: 3. The issue in this appeal is with reference to the deletion of three comparable while deciding the Transfer Pricing (TP) adjustments made by the AO/TPO. 4. This appeal has been filed by Revenue with a delay of 52 days. For that DCIT, Circle-1(1) has submitted an affidavit for condoning the delay by explaining the reasons as under: (a) The authorization for filing appeal was received in March, 2015 which is peak period for time barring assessments. (b) It is also submitted that M/s. APBCL which is also assessed in this office had filed writ petition in Hon'ble High Court which had to be followed up with personal attendance in Hon'ble High Court. Due to these reasons there is delay in filing the appeal . Considering the above explanation of the Revenue, we condone the delay in filing the appeal and admit the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regards TCS e-Serve Limited is concerned, we find that it possesses brand value as is evident from the Schedule-N (Operation and Other expenses) to the P L A/c of the annual report for the financial year 2009-10 of ₹ 46,065 thousands and also that it possesses intangibles in the form of software licenses which have not been taken note of by the authorities below while adopting its margin. It is also the case of the assessee that this company has a turnover of ₹ 1405.10 crores which is 25 times of the turnover of the assessee and hence, is not comparable to the assessee. The Ld. Counsel for the assessee had also placed reliance upon the TPO s order in the case of M/s. IGS Imaging Services India Ltd., to hold that there are exceptional circumstances during the relevant financial year due to which this company is not comparable to the assessee. The Ld. Counsel for the assessee also submitted that the segmental details of this company are not available and hence, has to be excluded on this count also. 11.2.2. We find that the assessee s contentions about the presence of brand value and owning of intangibles is supported by the evidence on record. However, as regards the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that this company was also directed to be excluded by following the decision of ITAT in assessee s own case for the A.Y. 2009-2010 on the ground that it is a KPO. The Ld. Counsel for the assessee has drawn our attention to the annual report of the said company to demonstrate that the facts and circumstances and the nature of the activities carried on by the said company in the A.Y. 2010-11 are also same. 17. Ld. D.R. has not been able to rebut this factual aspects of the said company with any evidence to the contrary. The only ground relied on by the Revenue is that in the case of Agilent Technologies International P. Ltd., the ITAT, Delhi Bench has upheld selection of M/s. Eclerx Services Ltd. A copy of the said order is filed before us. Assessee s contentions therein that the KPO services are distinct from BPO services and are not comparable, has been rejected by the Tribunal. However, since a uniform and consistent stand has to be taken in the case of the same assessee on similar facts and circumstances, we, respectfully following the decision of the Coordinate Bench in assessee s own case, do not see any reason to interfere with the order of the DRP. Ground No.2 is accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the interest income as disclosed by the Appellant in the financial statements is more than the interest income as per Form 26AS. 5. Allowing TDS credit of only ₹ 63,27,723 as against ₹ 67,79,643 claimed in the Return of Income. 6. Not providing claim of set off of brought forward losses of ₹ 30,38,954. 7. Levy of tax and interest on distributable profit u/s. 115-0 of the Act of ₹ 5,77,830 without appreciating the fact that the Appellant has paid the applicable tax u/s. 115-0 within the due date as provided u/s. 1150(3) of the Act. 8. Imposing interest u/s. 234A, 234B and 234C of the Act. 9. Initiating penalty proceedings under section 271(1) (c) of the Act . Ground Nos. 1 9 are general in nature and does not require any adjudication. 14. Ground Nos. 2 3 pertains to issue of disallowance of an amount of ₹ 3,69,000/- towards TDS payable on contracts and ₹ 41,809/- payable towards salaries, invoking the provisions of Section 43B of the Act. It was the contention that the above amounts have not been claimed as a deduction, hence disallowance does not arise. Objection was raised before the Dispute Resolution Panel [DRP], Hyderabad and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO as well as the contentions before the DRP and the copy of the Form 26AS filed before us at page 76. The basis for the AO s observation of higher amount is not forthcoming from the record. In spite of direction from the DRP, AO has not followed the verification or the petition u/s. 154 was disposed-off. We are of the opinion that there is no basis for making such addition, after verification of the details filed by the assessee. Accordingly, AO is directed to delete the amount. Ground is allowed. 18. Ground No. 5 pertains to allowing short TDS credit. Assessee claimed an amount of ₹ 67,79,643/- in the return of income, whereas the AO allowed only ₹ 63,27,723/- in the final order without giving any basis for the same. AO is directed to verify the record and allow the claim after due verification. Ground is allowed for statistical purposes. 19. Ground No. 6 pertains to not allowing the claim of set off of brought forward losses. There is no discussion in the order about the set off of losses and inspite of directions from the DRP, the same were not allowed. Ld. Counsel fairly admitted that these losses are subject to the orders in earlier years, accordingly, we direc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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