|The Tax Publishers2021 TaxPub(DT) 0547 (Karn-HC)
INCOME TAX ACT, 1961
Where Tribunal had neither considered evidence brought on record by TPO nor had considered the findings of TPO as well as the dispute resolution panel and in a cryptic and cavalier manner had recorded a finding in favour of the assessee and no cogent reasons worth the name have been assigned by the Tribunal for recording the findings, therefore, order passed by Tribunal was quashed and accordingly, matter was remanded back to Tribunal for decision afresh.
Transfer Pricing - Computation of arm's length price - Selection of comparables -
Assessee was engaged in the business of development of computer software through different units, i.e., Software Technology Park (STP) and Non-STP units. Assessee got merged with M/s M. Assessee was having interaction transaction with AE. Assessee rendered IT enabled services and had earned margin of 14.26% on total costs. In the transfer pricing study maintained by the assessee, it applied the transactional net mariginal method as the most appropriate method and on selection of certain companies as comparables whose average margin stood at 19.67%. Tribunal directed exclusion of VIT and Nucleus Netsoft. Held: From perusal of relevant extract of the order passed by the Tribunal, it was evident that Tribunal had neither considered evidence brought on record by TPO nor had considered the findings of TPO as well as the Dispute Resolution Panel and in a cryptic and cavalier manner has recorded a finding in favour of the assessee. No cogent reasons worth the name have been assigned by Tribunal for recording the findings. Therefore, order passed by Tribunal was quashed and accordingly, matter was remanded back to Tribunal for decision afresh in accordance with law.
Relied::Vijay Kumar Talwar v. CIT (2011) 330 ITR 1 (SC) : 2011 TaxPub(DT) 693 (SC), Sudarshan Silks & Sarees v. CIT (2008) 300 ITR 205 (SC) : 2008 TaxPub(DT) 1908 (SC), CIT v. UT Starcom Inc. (India Branch) ITA No. 767/2017 DATED 25-9-2017 : 2018 TaxPub(DT) 5896 (Del-HC), Pr. CIT v. IHG IT Services (India) P. Ltd. ITA No.264/2016 Dated 5-12-2016 : 2017 TaxPub(DT) 678 (P&H-HC), HSBC Electronic Data Processing (I) (P.) Ltd. v. Asstt. CIT (2013) 38 Taxmann.Com 141 (Hyd-Trib) : 2014 TaxPub(DT) 2537 (Hyd-Trib)
FAVOUR : Matter remanded.
A.Y. : 2006-07
IN THE KARNATAKA HIGH COURT
SUBSCRIBE FOR FULL CONTENT