MEGA SOFT LIMITED,CHENNAI vs. DCIT, CHENNAI

ITA 733/CHNY/2017Status: DisposedITAT Chennai21 September 2022AY 2012-1310 pages
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What did the Tribunal hold?

The Tribunal held that the rejection of the CUP method was not justified, especially since it was accepted in prior years without any change in facts. The Tribunal also directed that the corporate guarantee fee should be benchmarked at 0.5%.

What were the facts?

The assessee, engaged in IT consulting, used the Comparable Uncontrolled Price (CUP) method for transfer pricing. The TPO rejected CUP, opting for the Transaction Net Margin Method (TNMM) and made upward adjustments for AE sales and corporate guarantee.

What were the issues?

Whether the rejection of the CUP method for transfer pricing was justified and the appropriate rate for benchmarking corporate guarantee.

Which sections of the Income-tax Act were involved?

Section 92B,Section 144C

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Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: SHRI V. DURGA RAO, HON’BLE & SHRI G. MANJUNATHA, HON’BLE

Hearing: 28.07.2022Pronounced: 21.09.2022

PER G. MANJUNATHA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is directed against final Assessment

Order passed by the AO u/s.144C(13) of the Income Tax Act, 1961 dated

31.01.

2017, in pursuant to directions of the Dispute Resolution Panel-2,

Bengaluru, u/s.144(5) of the Income Tax Act, 1961 dated 26.12.2016 and pertains to assessment year 2012-13. 2. The assessee has raised the follow

The order continues below.

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