Case Law Details
Brief of the Case
ITAT Bangalore held In the case of DCIT vs. M/s. Parametric Technology (India) Pvt. Ltd. that the use of current year’s data is mandated by the relevant I.T. Rules, 1962 and by not adhering to this, the assessee’s TP Study was rendered unreliable. Before us the assessee reiterated the submissions made earlier and has not adduced any material evidence to controvert the findings of the TPO and the detailed reasoning of the DRP while rejecting the assessee’s contentions. There are a nos. of judicial pronouncements supporting the use of current year’s data alone for the purpose of comparability. In this view of the matter, we hold that the TPO was correct in rejecting the assessee’s TP Study / documentation in the facts and circumstances of the case and conducting her own search process for selection of comparables.
Facts of the Case
The assessee, a wholly owned subsidiary of Parametric Holdings Inc., USA which in turn is a subsidiary of Parametric Technology Corporation, USA, renders software development services to its Associated Enterprises. For the year under consideration, the assessee’s operations were classified under the three business segments, naming (i) Distribution of Software Licenses, (ii) Market Support Services and (iii) Global Support Services. The assessee also had third party local sales in the domestic business segment.
For Assessment Year 2010-11, the assessee filed its return of income on 29.3.2011admitting total income of Rs.1,14,70,596. The return was processed under Section 143(1) and the case was subsequently taken up for scrutiny. Reference under Section 92CA was made by the Assessing Officer to the Transfer Pricing Officer in respect of the international transactions reportedly entered into by the assessee. The TPO after examining the matter passed an order under Section 92CA dt.31.1.2014 proposing the TP adjustment on account of Market Support Services amounting Rs.1,34,48,859 and on account of Global Support Services amounting Rs. 54,56,263 to the international transactions entered into by the assessee in the period under consideration.
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