Radisys India Limited Vs DCIT (ITAT Bangalore)
Radisys India Limited, a wholly owned subsidiary of Radisys International LLC, provides software development and marketing support services to its Associated Enterprise. For AY 2017-18, it reported international transactions of Rs.1,59,43,94,173 for software development services, Rs.2,56,61,965 for marketing support services, Rs.1,35,13,207 towards reimbursement of expenses and Rs.61,55,757 relating to employee withholding and payment for purchase of stock under the ESPP scheme. TNMM was used for the software development and marketing support transactions.
The assessee’s margins were 13.31% for software development services and 8.67% for marketing support services. The TPO conducted a fresh search for the marketing support segment and ultimately proposed an adjustment. The AO made an addition of Rs.18,29,67,620 in the draft assessment order, which was upheld by the DRP and incorporated into the final assessment order.
The assessee challenged the final assessment order as being beyond the period prescribed under Section 144C(13). The assessee pointed out that the DRP directions were dated 31.12.2021 while the final assessment order was passed on 28.2.2022. However, the assessee could not provide evidence regarding the date on which the DRP directions were received by the National Faceless Assessment Centre. The Tribunal therefore declined to decide the issue and dismissed the ground.
