Case Law Details
Conduent Business Services India LLP Vs ACIT (ITAT Bangalore)
Conclusion: MAP rate should be applied by AO/TPO for the rest of the transitions of Rs.25,09,87,512 which was 4.42% of the total transactions. Accordingly, AO was directed to apply the MAP rate on the rest of the transactions for determination of the margin on the international transactions.
Held: Assessee was engaged in 2 segments software development services , IT Enabled Services and Marketing Support Services during the impugned assessment year to US affiliate Companies and Non-US affiliate Companies. Assessee submitted that in terms of resolution dated 13.12.2021 the entire transaction of software development which comprised of USA portion alone was settled under MAP at a margin of 17.27%. Assessee had undertaken deemed international transaction in the nature of BPO support services with non US AE’s and unrelated parties amounting to Rs.25,09,87,512/-. In this regard, assessee had filed additional ground as per rule 29 of the Income-tax Rules and as per written synopsis he requested that total transaction which consisted of 4.42% and requested to apply MAP margin rate. Considering the argument of the Revenue that the margins might be affected because of the geographical risks, the transaction undertaken by assessee consisting of 4.42% was made in the European countries. Considering the objections of the Revenue, the lower authorities had not given any findings in regard to margin will affect as per the geographical area. Respectfully following the judgment of the Hon’ble Bombay High Court of Bombay and the decision of the co-ordinate bench, the prayer of assessee was accepted and MAP rate should be applied by the AO/TPO for the rest of the transitions of Rs.25,09,87,512/- which was 4.42% of the total transactions. Accordingly, AO was directed to apply the MAP rate on the rest of the transactions for determination of the margin on the international transactions. Further in support of MAT credit brought forward from the previous year, AO was directed to verify the correct poison and give credit as per law.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This is an appeal filed by the assessee against the final assessment order passed by the AO u/s 143(3) r.w.s 144C(13) of the Income-tax Act dated 30/10/2018 on the following grounds of appeal:-
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