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| The Tax Publishers2021 TaxPub(DT) 0816 (Del-Trib) INCOME TAX ACT, 1961
Section 92CA
Where assessee had margin of 23.3% on Software Development segment as compared to the margin of 11.42% of the comparable companies and the working capital adjustment margin has already been factored in the account and no separate adjudication is called for and no distinguishing feature in the facts of the present case, as compared to assessee's own case in assessment year 2010-11, was pointed out by Revenue and further, it was also not brought on record any material to show that the decision of the Co-ordinate Bench of the Tribunal in assessee's own case for assessment year 2010-11 was set aside/stayed or overruled by higher judicial forum, therefore, Revenue was not justified in making the addition.
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Transfer pricing - TP adjustment - Adjustment made to international transactions on account of interest receivable from AE's -
Assessee was engaged in the business of manufacturing of projectors and parts and trading in visual display systems, projects and software and design operations. The case was selected for scrutiny and thereafter notice under section 143(2) was issued. AO noticed that assessee had entered into International Transactions with its AE within the meaning of section 92B. He accordingly referred the matter to TPO for determining ALP under section 92CA(1). TPO passed under section 92CA(3) proposed an adjustment on account of difference in arm's length price of international transactions entered by the assessee with AE. AO passed draft assessment order under section 144C read with section 143(3) assessing the total income. Held: Assessee contended that he had margin of 23.3% on Software Development segment as compared to the margin of 11.42% of the comparable companies and the working capital adjustment margin has already been factored in the account and no separate adjudication is called for. The aforesaid contention of assessee was not controverted by Revenue. Further, contention of assessee of not charging interest on overdue debts from the third parties and not paying any interest to the creditors has also not been controverted by the revenue. No distinguishing feature in the facts of the present case as compared to assessee's own case in assessment year 2010-11 was pointed out by the Revenue and further it was also not brought on record any material to show that decision of the Co-ordinate Bench of Tribunal in assessee's own case for assessment year 2010-11 was set aside/stayed or overruled by the higher judicial forum. Considering the totality of case and following the order of the Co-ordinate Bench in the assessee's own case, it was held that Revenue was not justified in making the addition.
Relied:Pr. CIT-V v. Kusum Health Care (P) Ltd. [ITA No. 765/2016) : 2017 TaxPub(DT) 4367 (Del-HC), Pr. CIT-2 v. Bechtel India (P) Ltd. (ITA No. 379/2016) : 2016 TaxPub(DT) 5233 (Del-HC), CIT-I v. Cotton Naturals (i) (P) Ltd. (2015) 276 CTR 445 (Del) : 2015 TaxPub(DT) 1361 (Del-HC) and CIT v. EKL Appliances Ltd. (2012) 345 ITR 241 (Del) : 2012 TaxPub(DT) 2071 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
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