Only the expenses that have been incurred after the date of entering into agreement are liable for mark-up

Executive Summary:-The Income Tax Appellate Tribunal (the “Tribunal”) of Hyderabad, on 31 January 2011, pronounced its ruling in the case of M/s Convergys Information Management (India) (P) Ltd. Vs DCIT, Hyderabad, ITA No. 229/H/2009, on whether the expenses incurred prior to the date of entering into agreement are subject to mark-up. The Tribunal ruled in favour of the Taxpayer stating that only the expenses incurred after the date of entering into agreement are liable for mark-up. Facts The Taxpayer provides software development and product support service to its associated enter...