Comparex India Private Limited Vs ITO (ITAT Delhi)
The assessee appealed against the final assessment order dated 28.07.2022 passed under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961 for AY 2018-19. The TPO had proposed a transfer pricing adjustment of Rs.2,24,36,553/- relating to intra-group services, back-office support services, and sourcing fee/purchase and sale of software. After the assessee’s objections, the DRP directed that the adjustment for intra-group services of Rs.1,85,52,925/- be sustained, while the adjustments concerning back-office support services and sourcing fee/purchase and sale of software be deleted after re-verification and working-capital adjustment.
The TPO passed an order giving effect to the DRP directions and restricted the adjustment to Rs.1,85,52,925/-. However, the jurisdictional Assessing Officer subsequently passed the final assessment order dated 28.07.2022 by sustaining the adjustments as per the original draft assessment order, without considering the TPO’s order giving effect to the DRP directions.
The assessee pressed the ground alleging violation of Section 144C(13), contending that the final assessment order was not passed in conformity with the DRP directions. It relied upon Hexaware Technologies Ltd. vs. ACIT, Writ Petition No.1778 of 2023, order dated 03.05.2024. The Revenue contended that the AO had proceeded under a mistaken understanding of the DRP directions and that the assessment should not be quashed for such a mistake. It relied on Hitachi Astemo Haryana Private Ltd. vs. DCIT, UOI & ors. vs. Ashsih Aggarwal, Sugandhi vs. P. Rajkumar, ITO vs. M. Pirai Choodi and PCIT vs. M/s. S.G. Asia Holdings (India) Pvt. Ltd.
