ACIT v Birla Soft Ltd.
ITAT, Delhi
ITA No. 4001 (Delhi) of 2009
Assessment Year: 2004-05
Decided on: 17 June 2011
Order
Rajpal Yadav, JM
1. The revenue is in appeal before us against the order of Learned CIT (Appeals) dated 28-7-2009 passed for the assessment year 2004-05. In the first ground of appeal, revenue has pleaded that Learned CIT (Appeals) has erred in deleting the additions made by the Assessing Officer on the recommendations made by the learned TPO for adjustment in arm’s length price on the international transactions carried out by the assessee with its associate enterprises.
2. The brief facts of the case are that the assessee is a 100 per cent subsidiary of Birla Soft Enterprises, which is a 100 per cent subsidiary of Birla Soft Inc. US. It is engaged in the business of software development and related services. It has filed its return of income on 1-11-2004 declaring an income of Rs.7,82,54,384. The software related business was being carried out by the assessee from Software Technological Park (STP), Scheme notified by the Government of India in the Ministry of Commerce and Industries. The undertakings were operational at three different address, namely,
(i) Birlasoft
Software Technology Park
Block-III, 2nd Floor
Ganga Shopping Complex,
Sector-29, NOIDA-201303
(ii) Birlasoft (GE-GDC)
Software Technology Park
Block-III, 3rd Floor,
Ganga Shopping Complex,
Sector 29, Noida-201303
(iii) Birlasoft
36, Vijayaraghava Road, 3
T. Nagar, Chennai.
The assessee had a branch office in Australia and Singapore which were also engaged in the business of developing and supplying customized computer software and related software services to both associated enterprises and other unrelated enterprises outside India. On scrutiny of the accounts, Assessing Officer found three international transactions undertaken by the assessee with its associated enterprises during the accounting year relevant for the present assessment year. The Learned CIT (Appeals) has noticed the transactions as well as value of transaction and the method used by the assessee for determining the ALP in respect of those transactions. They read as under:
