9911796707
TMI Blog2022 (3) TMI 1468X X X X Extracts X X X X X X X X Extracts X X X X ..... the auditor with respect to information and explanation provided to us (i.e. the auditor) is too common a disclaimer which is almost a standard practice, and, in any case, there is no specific information that is sought to be disclaimed vis- -vis it s authenticity. It is not a clear as to which is the figure with respect to authenticity of which learned TPO had doubts. It was open to TPO to ask a specific question and deal with the reply thereto, or to at least point out which is the information in respect of which he had issues. This disclaimer may raise a bonafide doubt but that cannot be reason enough to reject the segmental accounts as a whole. Rejecting the internal TNMM on the basis of such a sweeping generalization cannot meet a jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 9th January 2016 passed by the learned Assessing Officer under section 143(3) r.w.s. 144C (13) of the Income Tax Act 1961 for the assessment year 2010-11. 2. The first grievance raised in this appeal is that on and the facts and in the circumstances of the case, the learned Assessing Officer was not justified in making the arm's length price adjustment (ALP) of Rs. 2,26,10,544 in respect of provision for software development services, and that the Transfer Pricing Officer erred in recommending the said ALP adjustment and the Dispute Resolution Panel erred in confirming the said ALP adjustment. The twelve grounds of appeal, set out in summarized grounds of appeal, are primarily arguments in support of this grievance. 3. To adjustment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * The segmental audit report dated 28/11/2011 filed by the assessee contains the auditor's comment as ".................. the information and explanation provide to us ...........". This is nothing but a disclaimer from the auditory who has signed the audit report on the basis of information provided by the management to him. Hence, its authenticity is not beyond doubt. It has only been created considering the Transfer Pricing auditing in mind by showing the transaction with the AE in good light. * Allocation of expenses have been arbitrarily done resulting in skewed result like AE segment PLI 13.79 - 15.39% and the non-AE segment PLI 8.01-9.44% and the entity level PLI being 7.14%. Based on the above discussions the segmental audit r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d TPO had doubts. It was open to TPO to ask a specific question and deal with the reply thereto, or to at least point out which is the information in respect of which he had issues. This disclaimer may raise a bonafide doubt but that cannot be reason enough to reject the segmental accounts as a whole. Rejecting the internal TNMM on the basis of such a sweeping generalization cannot meet a judicial approval. Similarly, the segmental accounts showing different PLIs in different segments, i.e. 13.79%-153.9% as against 8.01%-9.44%, cannot be reason enough to reject the segmental accounts. Having said that, the observations regarding "allocation of expenses have been arbitrarily done resulting in skewed result", in our considered view, need to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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