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TMI Blog2023 (10) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... he margin of Microland Ltd. at 9.84%. In our opinion, this is required to be re-examined by AO/TPO. Accordingly, the issue is remitted to the file of AO/TPO for fresh consideration and take the correct PLI on this comparable. Non-giving of risk adjustment - Since in present case computation of risk adjustment is not provided by the assessee, hence respectfully following the decision of the Bench in the matter of Mercedez [ 2018 (2) TMI 1975 - ITAT BANGALORE] we send back additional ground no.1, to the file of TPO. Non-giving of working capital adjustment - We are of the opinion that this issue came for consideration on earlier round in . [ 2019 (4) TMI 2125 - ITAT BENGALURU] remand this issue to the file of the TPO for the calculating the working capital adjustment, if any, in accordance with law and the TPO shall consider all the binding decisions of the High Court/coordinate bench. These grounds are allowed for statistical purpose. We direct the AO/TPO to pass consequential order in conformity with the above direction as Tribunal on earlier occasion as reproduced herein above. Computing tax on assessed income at the erroneous rate of 34.37% (before surcharge and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April 2019 in the first round of litigation, directing the Ld. TPO to consider various case laws and objections of the Appellant have not been followed by the Ld. TPO/DRP. 4.2. The net margin of BPO Segment of Hartron Communications was distorted as the company accounted its export income on cash basis and expenditure on accrual basis. 4.3. Hartron Communications is functionally different from the Appellant as apart from back-office services, it is also engaged in diversified services such as custom soft development services, intellectual property services, web hosting, tech solutions 4.4. The impugned year was an exceptional year of operations for Hartron Communications, as the company recorded steep increase in revenue earned from BPO business to the tune of 483.72% over the last year. 5. The Ld. TPO/DRP have erred in computing Hartron Communication Ltd.'s Profit Level Indicator (`PLI') (OP/OC) as 46.38% inter alia because: 5.1. Unallocable corporate expenses have been allocated in the ratio of gross revenue among the segments. 6. The Ld. TPO/Hon'ble DRP have violated the doctrine of judicial discipline, inter alia because 6.1. On e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 1344 and 1350 of the paper book 2 and emphasized the entry into real estate business. The learned AR made submissions on the trading of shares of this company and relied on the observations of the Auditors. We found that the Chennai Bench of Tribunal in the case of M/s. Cameron Manufacturing India Pvt. Ltd. vs. DCIT in ITA No.336/ Chny/ 2018 dated 16/ 10/2018 has observed at para 7 which read as under: 7. Ground No.2.3: M/ s. Hartron Communications as the comparable company:- The Ld.AR submitted before us that M/ s. Hartron Communications had diversified operations amongst which many relates to activities that are not similar to the activity of the assessee company. Further it was submitted that the company M/ s. Hartron Communication's profit from BPO business both export and domestic for the current year is 18.43 crores while as for the previous year the profit was 3.81 crores which shows an increase of profit to the tune of 483.72%. Therefore, in the relevant assessment year there was extraordinary operations and hence 8 ITA No.336/ Chny/ 2018 cannot be taken as comparable company. Before us the facts presented by the Ld.AR could not be disputed by the Ld.DR. Af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... casion, in the first round the TPO considered the margin of Microland Ltd. at 9.84%. In our opinion, this is required to be re-examined by AO/TPO. Accordingly, the issue is remitted to the file of AO/TPO for fresh consideration and take the correct PLI on this comparable. 5. Ground No.8 of the assessee s appeal reads as follows: 8. The Ld. TPO has grossly erred in not following the directions of the Ld. DRP in allowing risk adjustment to the Appellant. 8.1. That the Ld. TPO has erred in holding that the risk adjustment has already been granted - vide order dated 28.01.2022. 5.1 This ground is with regard to non-giving of risk adjustment by AO/TPO though ld. DRP has directed to grant risk adjustment. 5.2 After hearing both the parties, we remit the issue to the file of AO/TPO to pass consequent order on this issue in conformity with the earlier direction of ld. DRP read with earlier order of the Tribunal in IT(TP)A No.2541/Bang/2017 dated 5.4.2019, wherein held as under: 21. We have heard the rival contentions and perused the record. Since we are remanding the matters in respect of nine comparables to the file of TPO therefore we deem it appropriate to rema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mputation of the same before the authorities below. In the case on hand, we find that though the assessee in Form 35A submitted before the DRP, at Annexure/Objection 13 thereof mentioned risk adjustment at 4.92%, no scientific basis or working in respect of the assessee's claim vis- -vis the comparable companies had been provided. Even on pages 890 891 of paper book (Annexure 9-B), no working has been given in respect of risk adjustment claimed at 6.26% vis-a-vis the comparable companies. Since the assessee has not given the computation of risk adjustment of the assessee vis-a-vis the comparable companies, we hold that the assessee shall not be entitled to any risk adjustment and accordingly reverse the DRP's decision granting the assessee risk adjustment. In coming to this view, we place reliance on the decision of the co-ordinate bench of this Tribunal in the case of Syniverse Teledata Systems (P.) Ltd. (supra) which covers the issue squarely in .favour of the revenue in the light of the factual matrix of the case. Consequently. Ground No.4 of Revenue's appeal for Assessment Year 2011-12 is allowed. Since in present case computation of risk adjustment is not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead of the applicable tax rate of 30%. 7.1 After hearing both the parties, we are of the opinion that this ground is consequential since we have remitted certain issue involved in this appeal to the file of AO/TPO for reconsideration, as such the computation of tax liability will change accordingly and the AO is directed to recompute all tax liability in accordance with law. 8. Ground No.11 is with regard to charging of interest u/s 234D of the Act at Rs.1,57,78,989/-, which reads as follows:- 11. The Ld.AO has grossly erred in levying interest of Rs. 1,57,78,989/- u/s 234D of the Act inter alia because 11.1. Interest u/s 234D can be levied only when refund is granted to an assessee u/s 143(1) of the Act. 11.2. No interest u/s 234D can be levied as refund in Appellant's case was granted u/s 143(3) r.w.s. 154 of the Act. 8.1 The contention of the ld. A.R. is that the interest u/s 234D of the Act could be levied only when refund is granted to the assessee u/s 143(1) of the Act. In the present case, there was no refund granted to the assessee u/s 143(1) of the Act. Hence, levy of interest u/s 234D of the Act bad in law. 9. After hearing both the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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