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TMI Blog2023 (12) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the year under consideration as well." 2. Brief facts for Addl. Ground no. - 8 It is submitted that the margin of the Assessee for the assessment year 2011-12 under consideration computed in terms of the APA stands at 18%. It is submitted that there is no difference in the facts pertaining to the methodology for preparation of segmental accounts as agreed upon in the APA and the year under consideration, and therefore the methodology as agreed upon in the APA may be adopted for the year under consideration as well. It is also submitted that there is no difference in the functions performed, assets employed and risks assumed ("FAR") between the year under consideration, and the years covered in the APA. 2.1 It is submitted that, various Hon'ble High Courts and Tribunals have consistently held that, even if, the year under dispute is not covered by the APA, if the FAR is same, APA should be adopted for the international transactions for the year under dispute. Reliance in this placed on the following decisions: * PCIT v. Springer India (P.) Ltd ([2023] 151 taxmann.com 251 (Delhi)); * Aker Powergas (P.) Ltd v DCT ([2023] 147 taxmann.com 253 (Mumbai -Trib.)); * ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion of three comparables in Ground no. 3(h), 3(j) and 3(l) which are as under: 3(h) - Informed Technologies India Ltd. 3(j) - Inhouse Production Ltd. 3(l) - Cosmic Global Ltd. The Ld.AR submitted that apart from the above comparables sought for inclusion / exclusion, assessee do not wish to press any other comparables raised in the sub grounds of Ground no. 4. However liberty is granted to the assessee to raise the issues that are not argued and considered in an appropriate circumstances. 5. Before we undertake the comparability analysis, it is sine qua non to understand the functions performed by the assessee under the ITeS segment. Functions performed, assets owned and risks assumed by assessee are as under: 6. Based on the above, we shall carryout the comparability analysis of the assessee that the alleged comparables sought for exclusion / inclusion. A. ICRA Online Ltd. - Ground no. 3(m) It is submitted that ICRA Online Ltd. is engaged in the business of outsourced services, information services and software products and services. The company provides services to clients in the areas of data extraction, aggregation, electronic conversion of financial statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iding assistance to the AE while interacting with the client when the service module is being conceptualized, client interaction in the initial stages of the contract negotiations, client interaction when the service goes live and decisions regarding and in the interaction when the service goes live and decisions regarding general administration, accounting, legal, finance and personnel matters in the US etc. In our considered opinion, this company cannot be held to be a fit comparable with that of assessee. We accordingly, direct the Ld.AO/TPO to exclude this company from the final list. Accordingly, ground no. 3(m) stands partly allowed. 7. Comparables sought for inclusion : - 3(h), 3(j) & 3(l) A. Inhouse Production Ltd. The Ld.AR submitted that in this regard it is submitted that the company was excluded by the TPO for the reason that no data was available. The DRP upheld the exclusion of the company by holding that the company incurred expenditure in foreign currency towards purchase of database which makes the company incomparable to the assessee. B. Informed Technologies India Ltd. The TPO excluded the company from the final list of comparables for the reason that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of e4e Business Solutions India Private Limited for a consideration of USD 5,000,000 (Rs.22,81,50,000/-) on 09.02.2011, on a going concern basis. Out of the above consideration, after adjusting for the value of tangible fixed assets, current assets and current liabilities, the value of goodwill was arrived at Rs. 18,17,47,278/- in the financial statements. It is submitted that for tax audit purposes, out of the above goodwill, a sum of Rs. 1,36,89,000/- was identified as being towards customer relationships. In the return of income filed for assessment year 2011-12, the Assessee had claimed depreciation of Rs. 17,11,125/- on customer relationships of Rs. 1,36,89,000/- which was accepted by the Assessing Officer. It is submitted that the Hon'ble Supreme Court in Commissioner of Income Tax, Kolkata v. Smifs Securities Ltd. (reported in [2012] 24 taxmann.com 222 (SC)) held that that goodwill is an intangible asset eligible for depreciation under the provisions of section 32 of the Act. 8.2 It is submitted that the assessee thus raised claim for depreciation of Rs. 2,10,07,285/- on balance goodwill of Rs. 16,80,58,278/- (Rs.18,17,47,278 - Rs. 1,36,89,000) under Section 32 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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