9911796707
TMI Blog2025 (1) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and take necessary action as per law. AO is directed to decide this issue in accordance with the aforesaid directions. Ergo, ground allowed for statistical purpose. - Shri Vikas Awasthy, Judicial Member And Shri Avdhesh Kumar Mishra, Accountant Member For the Appellant : S/Shri Nageswar Rao Parth, Advocates For the Respondent : Shri S.K Jhadav CIT- DR ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the assessment order dated 30.04.2021, passed u/s. 143(3) r.w.s.144C(13) r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred to as the Act ), for assessment year 2016-17. 2. Shri Nageswar Rao, appearing on behalf of the assessee submits at the outset that the assessee in appeal is only pressing ground no. 3, ground no. 4 restricting submissions on inclusion of Magma Advisory Service Ltd. only, (in short 'Magma') and ground no. 17 to 20 of appeal. The other grounds of appeal viz. ground no. 1, 2, 5 to 16 are not pressed. 2.1. The ld. Counsel for the assessee submits that the Transfer Pricing Officer ( in short the TPO ) while passing order dated 07.04.2021 has failed to give effect to directions of the DRP in so far as computin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le assets/software. The DRP directed the AO to verify details of computer software provided by the assessee and treat the same as intangible asset if it involves any kind of patent etc. and determine the rate of depreciation as per the Act. He submitted that as per schedule of depreciation, the assessee is eligible to claim higher rate of depreciation that is @ 60% on computer software and same should be allowed to the assessee. 2.4. The ld. Counsel further submitted that in para 20 of grounds of appeal the assessee has assailed disallowance made u/s. 40(a)(ia) of the Act on account of non deduction of taxes at source on International Travel Expenses amounting to Rs. 2,99,61,732/-. He submitted that the DRP after considering this issue had directed the AO to verify contentions of the assessee and take necessary action as per law. The assessee had categorically submitted before the DPR that out of disallowance of Rs. 89,88,520/-, taxes on International Travel Expenses Rs. 3,03,55,292/- was duly deducted and deposited. The ld. Counsel submits that the AO may be directed to comply with directions of the DRP. 3. Per contra, Shri S.K Jhadav representing the Department submits that Magma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed final assessment order dated 23.04.2021, in accordance with the order giving effect dated 07.04.2021 and directions of the DRP. While passing final assessment order, the AO also gave part effect to directions of the DRP. 6. The assessee in appeal has raised as many as 20 grounds. The ld. Counsel for the assessee stated at Bar that except ground no.3, ground no. 4 limited to the assailing of inclusion of Magma Advisory Services Ltd. and ground no. 17 to 20 is not pressing other grounds of appeal. The ld. Counsel further urged that the assessee reserves the right to argue the grounds not pressed in the present appeal in other assessment years. 7. In ground no. 3 of appeal, the assessee has assailed the order of TPO/AO in not computing margins of the comparables companies in accordance with the directions of the DRP. We find that the DRP while adjudicating this issue in para 2.5.7 of the directions held as under:- 2.5.7 In this view of the matter, and following the judicial decisions in Mentor Graphics (109 ITD 101), Sony India (288 ITR 52 (Delhi- ITAT), Philips Software (26 SOT 226) (Bangalore- ITAT), Mercer Consulting (India) Pot. Ltd (Delhi ITAT), Sunlife India Service Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015. One of the question for consideration before High Court was: (i) Whether the TIAT was justified in concluding that the Assessee is involved in the research and development activity and not provision of market support services? The Hon'ble High Court referred to the DRP directions dated 12.07.2011 for AY 2007-08 wherein the DRP had observed as under: 4.5 Facts on record show that assessee has Research, Service Agreement with its AE i.e. Honda R D Japan. Under the agreement - HRID undertakes market research of product, styling modification and testing activities related to research and development of products to be manufactured by Honda Motors. The show cause notice dated 10.09.2010 states the functions performed by assessee are strategic management, corporate services, research services, testing services. An analysis of work done shows no hard core R D. In. our view assessee gathers information from market and analyses it for further action by its AE. So we find that the assessee is engaged in providing market research services and testing services which lead to the development of better products by their associated enterprises and that the assessee does not itself develop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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