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TMI Blog2021 (3) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant irrespective of the year to which the income relates? - HELD THAT:- We deem it appropriate to direct the Assessing Officer to give credit as per reconciliation statement submitted by the assessee after due verification. This ground is remitted to the file of Assessing Officer for consideration afresh. Non-grant of depreciation on Foreign Exchange Loss disallowed as Capital Expenses - HELD THAT:- We remit this issue to the file of Assessing Officer for verification with records and decide accordingly as per law. Levy of interest u/s.234B of the Act, is consequential in nature. - IT (TP) A No.2/Bang/2018 - - - Dated:- 25-2-2021 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER For the Assessee : Shri K.R.Vasudevan, Advocate. For the Revenue : Shri B.K. Singh, CIT (D.R) ORDER PER SHRI CHANDRA POOJARI, A.M. : This appeal by the assessee is directed against the assessment order dt.31.10.2017 passed under Section 143(3) r.w.s. 144(13) of the Income Tax Act, 1961 by the Dy. Commissioner of Income Tax, Circle 7(1)(1), Bangalore. 2. The assessee has raised the following grounds of appeal: Transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onomic adjustments made by the Appellant to the net operating margin on account of extraordinary and non-recurring expenses incurred during the financial year 2012-13. 11. The learned AO/ learned TPO/ Hon'ble DRP erred in not allowing working capital adjustment in the certification segment. 12. The learned AO/ learned TPO/ Hon'ble DRP erred in accepting Certification Engineers International Ltd as a comparable even when its business is not comparable to that of the Assessee 13. The learned AO/ learned TPO/ Hon'ble DRP erred in rejecting the following companies whose business is comparable to the business of the Assessee: Alphageo (India) Ltd. Kirloskar Consultants Limited 3. The constructive ground in Transfer Pricing issues are in Ground Nos.7, 8, 9 10 and other grounds on T.P. does not require adjudication. After hearing both the parties, we are of the opinion that similar issue came up for consideration before this Tribunal in assessee s own case in IT(TP)A No.291/Bang/2014 vide order Dt.20.09.2019 for the A.Y. 2009-10; observed in paras 14, 16 17 are as under : 14. We have heard the rival submissions. The ld. counsel for the assessee su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operating profit or loss, as the case may be. The law in this regard is well settled by the decision rendered by the ITAT Bangalore Bench in the case of SAP Labs (supra) and Auto Desk India Pvt. Ltd. Vs. DCIT IT(TP)A.No.540 541/Bang/2013. (2) The TPO should restrict the addition only in respect of international transactions with the AE. However, the submission made by the ld. DR with regard to a part of the certification services having been sub-contracted to the AE and receipt of sub-contracting charges from the AE to the extent the same will have impact on the consideration received from the AE for rendering the certification services should also be examined by the TPO. (3) Errors, if any, in the computation of margins of comparables should be looked into by the TPO in the set aside proceedings. (4) Threshold limit for applying RPT filter should be 15% or 25% of sales depending upon the availability of comparable companies after all exclusions as held by the Tribunal in the case of Auto Desk India Pvt. Ltd. Vs. DCIT [2018] 96 taxmann.com 263 (Bang.Trib.) [para 24 to 25]. 17. The above directions will be sufficient to take care of the grievances projected by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Dt.20.09.2019 for the A.Y. 2009-10 in para 36 as under : 36. We have considered the rival submissions and are of the view that the conclusion of the DRP in this regard deserves to be upheld. It is no doubt true that the Assessee is at liberty to change the method of accounting provided the change in the method of accounting is bonafide and is being consistently followed subsequently. But the method followed by the Assessee in the present case of postponing revenue recognition without postponing the cost incurred for earning the revenue cannot be said to be proper. There is no valid explanation for claiming expenses related to the CAS services rendered by the Assessee when recognition of income therefrom is postponed. The change in the method of accounting was therefore not bonafide and was rightly rejected by the revenue authorities. We find no merit in the claim of the Assessee in this regard. The cases cited by the learned counsel for the Assessee are with regard to the right of an Assessee to change the method of accounting provided it is bonafide and is followed subsequently. Therefore the case laws cited are not discussed. Suffice it to say that the principle laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X
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