Ranstad India Private Limited Vs ACIT (ITAT Chennai)
Material Facts
The assessee, engaged in providing HR solutions including staffing, recruitment, outsourcing and consulting services, is a wholly owned subsidiary of Randstad Asia Pacific B.V., Netherlands. It filed its return of income for Assessment Year 2021-22 declaring nil income.
The case was selected for scrutiny and referred to the Transfer Pricing Officer (TPO). The TPO proposed:
- Downward adjustment to AE cost at entity level of ₹46,37,485.
- Downward adjustment of ₹7,64,78,442 towards Global IT Services.
The Assessing Officer (AO) incorporated these transfer pricing adjustments in the draft assessment order and also made other additions, determining the assessed income at ₹13,92,28,760. The Dispute Resolution Panel (DRP) reduced the entity-level adjustment to ₹26,85,433 but upheld the adjustment relating to Global IT Services. The assessee appealed before the ITAT.
During the hearing, the assessee did not press Grounds 2 to 5 relating to aggregation of transactions and benchmarking, and those grounds were dismissed as not pressed.
Procedural History
- Return of income filed declaring nil income.
- Reference made to the TPO for determination of arm’s length price.
- TPO proposed transfer pricing adjustments relating to entity-level AE cost and Global IT Services.
- AO passed the draft assessment order incorporating the adjustments.
- DRP granted partial relief by reducing one adjustment but upheld the Global IT Services adjustment.
- The assessee appealed before the ITAT.
Legal Issues
- Downward adjustment relating to payment for Global IT Services.
- Deduction under Section 80JJAA.
- Restriction of TDS credit.
- Levy of fee under Section 234F.
- Short grant of interest under Section 244A.
- Levy of interest under Section 234B and initiation of penalty proceedings under Section 270A.
Relevant Statutory Provisions
- Sections 143(3) and 144C(13)
- Section 80JJAA
- Sections 234F, 234B and 244A
- Section 270A
Parties’ Submissions
