ITAT MUMBAI BENCH ‘K’
Wills Processing Services (India) (P.) Ltd.
Versus
Deputy Commissioner of Income-tax
IT Appeal NO. 8772 (MUM.) OF 2010
[ASSESSMENT YEAR 2006-07]
DECEMBER 7, 2012
ORDER
Per Bench.
This is an assessee’s appeal for assessment year 2006-07 against the order of AO u/s 143(3) in pursuance to the directions of the Dispute Resolution Panel-II (DRP) dated 22.09.2010 under section 144C(5) of the I.T. Act on various issues. Assessee has raised detailed grounds on the following issues:
1. Deduction under section 10A of the Act.
2. Reduction of Technical Fees and Satellite Link Charges from Export Turnover (Rs. 17,359,069 & Rs. 20,210,502).
3. Disallowances under section 40(a)(ia) of Rs. 30,55,074.
4. Transfer Pricing Adjustment of Rs. 4,97,24,79 in respect of ITES services rendered by assessee under section 92CA(3) r.w. 92C(3) of the IT Act, 1961.
5. Initiating penalty proceedings under section 271(1)(c) of the Act.
2. We have heard the learned Counsel and the learned DR and perused the paper book filed in two volumes running from page 1 to 764. The learned Counsel also placed a chart summarizing the objections with reference to various issues and relevant pages in the paper book. Learned DR also placed his written submissions issue wise which are considered in this order wherever necessary and applicable.
3. After considering the arguments and examining the record, the grounds are decided as under:
4. Ground No.1 pertains to rejection of claim under section 10A of the Income Tax Act to an extent of Rs. 4,75,07,401. Assessee was originally incorporated on 12.5.1992 as Trinity Computer Processing (P) Ltd which is 99.99% owned subsidiary of Wills Europe BV, a company incorporated in Netherland. Assessee is an Indian provider of IT enabled services (ITES), with its corporate head quarters located at Mumbai. Assessee has rendered IT Enabled Services to Trinity Processing Services Limited (“TPSL”) a company incorporated in England and Wales. Assessee renders services exclusively as a captive service provider to TPSL vide its agreement dated 21 December 2001. ITES include:
