DBOI GLOBAL SERVICES P. LTD.,MUMBAI vs. ADDL/JT/DY/ASSTT/CIT/ITO, NATIONA E-ASSESSMENT CENTRE, DELHI

ITA No. 1263/Mum/2021 is filed by DBOI global Services Pvt. Ltd. now known as Deutsche India Pvt. Ltd. for A.Y. 2016-17 against the assessment order passed by the National E- Assessment Centre, Delhi (the learned Assessing Officer) on 30th April, 2021 under Section 143(3) read with section 144C(13) read with section 144B of the Income-tax Act, 1961 (the Act), wherein the returned income of the assessee as per ROI filed on 26th November, 2016 at ₹305,11,51,500/- as per normal computation and ₹246,84,87,353/- as per book profit

The assessee has preferred this appeal raising following grounds of appeal:-

Brief facts of the case shows that assessee is a company, has processing centre in Bangalore, Pune and Mumbai under STPI and Jaipur under SEZ for providing back office services and IT enabled services to support various business entities of Deutsche Bank Group. It is a global processing centre for the group and has also branch in United Kingdom. It filed its return of income on 26th November, 2016 at a total 05. income of ₹305,11,51,500/-. The book profit was computed under Section 115JB of the Act at ₹246,84,87,353/-.

As the assessee has entered into international transaction, the reference was made to the Jt. Commissioner of Income tax, transfer pricing, Range-1 (2), Mumbai (the learned Transfer Pricing Officer). The learned Transfer Pricing Officer passed an order under Section 92CA (3) of the Act on 17th October, 2017, wherein he proposed an adjustment of ₹398,20,42,610/-. Accordingly, the draft order under Section 144C of the Act was passed on 12th December, 2019 determining the total income of ₹722,73,42,494/- as per normal computation. The book profit of the assessee was computed as declared by the assessee.

Based on the direction of the learned Dispute Resolution Panel the final assessment order was passed wherein the normal income of the assessee was computed at ₹703,31,20,819/- as per normal computation. However, while working out the book profit income under Section 115JB of the Act, the learned Assessing Officer took the book profit computation offered by the assessee of ₹246,84,87,353/- and also made addition thereto of ₹398,20,42,610/- on account of Arm’s Length Price adjustment in relation to international transactions with Associate Enterprises. Accordingly, he assessed the book profit under Section 115JB of the Act at ₹645,05,29,963/-.

Aggrieved by the order of the learned Assessing Officer, the assessee is in appeal before us.

At the time of hearing the assessee raised an additional ground of appeal [ which was also taken as ground no 1 & 2 in appeal form] vide letter dated 18th June, 2021 with fact liability of deduction for education cess and higher education cess for ₹2,96,94,466/-. However, at the time of hearing this ground of appeal was not pressed and hence, the additional ground is not admitted.hence Ground no 1 & 2 are dismissed.

The ground no.3 of the appeal is with respect to the addition of ₹398,20,42,610/- being adjustment on account of Arm’s Length Price in relation to the book profit computation under Section 115JB of the Act.

The learned Authorized Representative also submitted a letter dated 26th May, 2021, wherein it was submitted that assessee has entered into an advance pricing agreement on 17th March, 2021 and A.Y. 2016-17 is covered under the same Advance Pricing Agreement (APA) provisions. It was further stated that assessee filed modified return of income and has paid due tax along with interest thereon. By that letter, the assessee also submitted that after the direction of the learned Dispute Resolution Panel, there is a substantial reduction in the margin and the adjustment has also reduced substantially. Therefore, the main grievance is with respect to the addition to book profit under Section 115JB of the Act of adjustment on account of determination of Arm’s Length Price of international transactions.

The learned Departmental Representative supported the order of the learned Assessing Officer.

We have carefully considered the rival contentions and perused the orders of the learned Assessing Officer. The learned Assessing Officer while passing the draft assessment order under Section 144C of the Act on 12th December, 2019 accepted book profit computation of the assessee at ₹246,84,86,353/-. Thus, this was accepted without any

Ground no 4 of appeal is with respect to the short grant of credit for TDS of ₹2,80,00,042/-. The same ground of appeal was not pressed at the time of hearing and therefore, same is dismissed.

In the result, the appeal filed by the assessee is partly allowed.