PLEASE SUBSCRIBE FOR FULL REPORT

     Click to download and install HINDI Font.    



 
Tax Publishers 2015 TaxPub(DT) 2290 (Mum-Trib)

 

Vistaar Systems (P.) Ltd. v. Asstt. CIT

 

INCOME TAX ACT, 1961

--Transfer pricing --Computation of arm|s length price CUP method vis-a-vis TNMM --Assessee, a software development company had developed software which was sold to a USA based entity. For determining arm|s length price, assessee used CUP method. AO rejected assessee|s method and adopted TNM method and made adjustment of Rs. 73,46,647. CIT(A) accepted CUP method but made adjustment by referring to the rate charged by other provider of similar services. By applying the rate difference between third party and assessee of Rs.150 per hour to the number of hours charged to AE at 34,136, CIT(A) arrived at adjustment of Rs.51,20,400 as against adjustment of Rs.73,46,647 made by AO. Cross appeals were filed by assessee and revenue against the order of CIT(A). Held: After recording categorical finding regarding rate difference of Rs.150 per hour, the TP adjustment had been restricted by the CIT(A) to Rs.51,20,400 as against adjustment of Rs.73,46,647 made by TPO. Detailed finding recorded by CIT(A) had not been controverted by assessee by bringing any positive material on record. Accordingly, there was no reason to interfere in the findings recorded by the CIT(A) resulting into addition of Rs.51,20,400.

Income Tax Act, 1961, Section 92C

REFERRED :

FAVOUR : Against the assessee (partly)

A.Y. : 2008-09


 

INCOME TAX ACT, 1961

--Deduction under section 10A--Undertaking in a free trade zone Adjustment of brought forward losses --The issue under consideration was whether AO was justified in adjusting the brought forward losses against the income of section 10A unit before deduction under section 10A. Held: The Bombay High Court in the case of CIT v. Black & Veatch Consulting (P.) Ltd. (2012) 348 ITR 72/208 Taxman 144 (Mag.) held that the deduction under section 10A has to be given at the stage when profits and gains of business are computed for the first instance. Following the aforesaid decision AO was not justified in adjusting brought forward losses against income of section 10A unit, before deduction under section 10A. Accordingly, he was directed to allow claim of deduction under section 10A on the profit of eligible unit before adjusting the brought forward losses against the income of section 10A unit.

Income Tax Act, 1961, Section 10A

Followed: CIT v. Black & Veatch Consulting (P.) Ltd. (2012) 348 ITR 72/208 Taxman 144 (Mag.)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2008-09



IN THE ITAT MUMBAI BENCH 'K'

R.C. SHARMA, A.M. & AMIT SHUKLA, J.M.

Vistaar Systems (P.) Ltd. v. Asstt. CIT

IT Appeal Nos. 5979 & 6089 (Mum.) of 2011

27 March, 2015 A.Y. 2008-09

In favour of revenue

Counsel: V. Chandrasekhar and Harshad Shah, for the Appellant. N. Padmanaban, for the Respondent.

ORDER

R.C. Sharma, A.M. 

These are the cross appeals filed by the assessee and Revenue against the order of Commissioner (Appeals) dated 29-6-2011 for the assessment year 2008-09, in the matter of order passed under section 143(3) of the IT. Act.

2. The assessee in its appeal (ITA No.5979/M/2011) has taken following grounds :--

"1.