Case Law Details
Brief of the Case
ITAT Jaipur held In the case of Integrated Decisions and Systems (India) Private Limited vs. ITO that these risk adjustments are only theoretically which cannot be quantified in terms of any calculation to conclude the exact adjustment in ALP. The ld counsel of the assessee had not able to quantify these adjustments in terms of statistical calculation and has not been able to demonstrate the effect of these risks on adjustment of ALP. The TPO was right by accepting the arithmetic mean of comparable of comparable companies if any risk as claimed by the appellant was concerned; it will be resulted in the arithmetic mean of all the companies as these risks adjustments also applicable on them.
Facts of the Case
The assessee company is engaged in the business of development of online support software. The service provided relate to software development, product customization and online 24X7 product technical support. The assessee company filed its e-return of income on 29/10/2007 for A.Y. 2007-08 declaring total income of Rs. 5,61,900/- and on 31/08/2008 for A.Y. 2008-09 at Rs. 3,49,140/-. The cases were scrutinized U/s 143(3). On perusal of P&L account, it revealed that the assessee had entered into an international transaction with Integrated Decisions and Systems Inc. 1650, West Bloomington USA for the development of software and support of software. The Indian Company was providing services and charging the same from the associated enterprise. These international transactions with the Associate Enterprise were referred to the Transfer Pricing Officer (TPO) U/s 92CA.
In A.Y. 2007-08, the TPO directed to make adjustment U/s 92CA at Rs. 85,74,926/- and in A.Y. 2008-09 at Rs. 1,23,23,977/- and no deduction U/s 10B would be allowed to the tax payer as per provisions of Section 92C(4). The draft order in both the years was served on the assessee thereafter the assessee filed its objection before the Dispute Resolution Panel u/s 144C (2) (b).
Please become a Premium member. If you are already a Premium member, login here to access the full content.
