9911796707
TMI Blog2024 (8) TMI 1435X X X X Extracts X X X X X X X X Extracts X X X X ..... ns separately the transfer pricing adjustment in respect of one transaction will require adjustment to second category of transaction resulting in reduced profit HELD THAT:- The fact that if the challenge as raised by the appellant were to be accepted, it would result in a reduction of the income chargeable to tax is not questioned or disputed before us. In view of the aforesaid, we find that no exception can possibly be taken to the view as expressed by the ITAT. No substantial question of law arises. The appeal is thoroughly misconceived and shall consequently stand dismissed. - Hon'ble Mr. Justice Yashwant Varma And Hon'ble Mr. Justice Purushaindra Kumar Kaurav For the Appellant : Mr. Puneet Rai, Sr.SC with Mr. Ashivini Kumar a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the provisions dealing with the transfer pricing under Chapter X of the Act? 2.4 WHETHER on facts and in the circumstances of the case Ld. ITAT was legally justified in aggregating the international transactions when they were reported in segregated manner by the Assessee? 2. We note that while considering the aforesaid aspects, the ITAT has observed as follows:- 5. As a corollary to the ALP of the intra group services received by the assessee being treated as NIL, the price paid for these intra group services is required to be taken out from the computation of remuneration receivable in respect of IT enabled services rendered by the assessee. This is so for the reason that the pricing of IT enabled services is on the cost plus 20% bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegorical in this regard. It states that (t)he provisions of this section shall not apply in a case where the computation of Income under sub-section (1)....... has the effect of reducing the income chargeable to tax or increasing the loss, as the case may be, computed on the basis of entries made in the books of account in respect of the previous year in which the international transaction was entered into . Section 92(1), in turn, states that (a)ny income arising from an International transaction shall be computed having regard to the arm's length price . What follows is thus that when, as a result of computation of income on the basis of arm's length price, the income of the assessee is lowered or the loss is increased, the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be applied because the application of ALP adjustment will indeed result in erosion of Indian tax base- as visualized by the scheme of Section 92(3) inasmuch for every rupee of ALP adjustment in intra group service, the revenue of the assessee on the basis of application of arm's length price will stand reduced by one and one fifth times of the ALP adjustment Section 92(3) does not permit computation of income on the basis of arm's length price in such a situation; as a matter of fact, it prohibits application of arm's length principle in such a situation. The plea of the assessee, as specifically taken up in ground no. 5 (g), is thus indeed well taken and merits our acceptance. 3. The fact that if the challenge as raised by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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