DCIT, BANGALORE vs. M/S NTT DATA GLOBAL DELIVERY SERVICES PVT. LTD.,, BANGALORE

The learned AO/ TPO erred, in law and in facts, by determining the arm's length margin/ price using only FY 2010-11 data which was not available to the Appellant at the time of complying with the transfer pricing documentation requirements; 6. The learned AO! TPO erred, in law and in facts, by rejecting the supplementary/ alternate economic analysis using internal TNMM as submitted by the Appellant; 7. The learned AG! TPO erred in rejecting certain comparable companies by applying the following quantitative and qualitative filters: (a) The learned AO/ TPO erred, in law and in facts, by rejecting certain comparable companies identified by the Appellant for having different accounting year (i.e. companies having accounting year other than March 31 or companies whose financial statements were for a period other than 12 months); (b) The learned AOITPO erred, in law and in facts, by rejecting certain comparable companies identified by the Appellant on account of showing diminishing revenues trend; (c) The learned AOITPO erred, in law and in facts, by rejecting certain comparable companies identified by the Appellant using 'Employee cost greater than 25 percent of total cost' as a comparability criterion; (d) The learned AO!TPO erred, in law and in facts, by rejecting certain comparable companies identified by the Appellant using 'Export earnings less than 75 percent of operating revenues' as a comparability criterion; 8. The learned AOITPO erred, in law and in facts, by accepting I rejecting companies based on unreasonable comparability criteria.

The learned AOITPO erred, in law and in facts, by not considering gains/ losses arising out of foreign exchange fluctuations, bank charges and provision for doubtful debts while computing the operating margins of the comparable companies.

The learned AOITPO erred, in law and in facts, by incurring computational errors in the impugned TP order;

Disallowance of expenses under section 14A of the Act amounting to INR 515,175 14.1. The learned AG has erred in law and facts, by stating that there is expenditure attributable to earning exempt income without appreciating the fact that the Appellant has not incurred any expenditure in relation to such exempt income. 14.2. The learned AG has erred in not considering the submissions made by the Appellant and appreciating the fact that the Appellant has not incurred any expenditure in relation to income not includible in total taxable income. 14.3. The learned AG has erred, in law and on facts, by computing INR 515,175, as disallowance under section 14A of the Act by applying the provisions of Rule 8D of the Rules.

Disallowance of expenses as per the provisions of section 40(a)(i) and 40(a)(ia) of the Act amounting to INR 2,992,562 resulting in double disallowance 15.1. The learned AG has erred in law and in facts in disallowing the year end provisions amounting to INR 22,98,683 under section 40(a)(i) and section 40(a)(ia) of the Act without appreciating the fact that such amount represents taxes on expenses which has already been offered to tax in the Return of Income filed by the Appellant. 15.2. The learned AG has erred in not considering the submissions made by the Appellant and appreciating the fact that the disallowance has wrongfully resulted in the same amount being disallowed twice and hence is not as in accordance with the principles of natural justice.

The learned AO has erred in law and facts, by restricting credit towards tax deducted at source ('TDS") and advance tax to an aggregate amount of INR 58,999,914 as against INR 71 896,342 claimed by the Appellant in its Return of Income resulting into reduction of TDS and advance tax claim by INR 12,896,428.

The learned AO has erred in levying interest of INR 548,766 under section 234A of the Act, INR 15,914,214 under section 234B of the Act, INR 2,724,805 under section 234D of the Act and INR 829,108 under section 244A of the Act. The above grounds are mutually exclusive and without prejudice to each other. The Appellant craves leave to add, alter, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal, so as to enable the Honourable Tribunal to decide on the appeal in accordance with the law.”

The direction of the Dispute Resolution Panel are opposed to the law and not on the facts and circumstances of the case.

On the facts and in the circumstances of the case, the DRP erred in law in directing the Assessing Officer to reduce the expenditure incurred in travel, telecommunication etc, both from the Export Turnover as well as the Total Turnover for the purpose of computation of deduction u/s.10A of the IT Act without appreciating the fact that the statue allows exclusion of such expenditure only from the Export turnover by way of specific definition of Export Turnover as envisaged by sub-clause(4) of explanation 2 below sub-section 8 of section 10A. On the other hand, there is no specific provision in section 10A warranting exclusion of above expenses from total turnover also. 3. For these and other grounds that may be urged upon, direction of the Dispute Resolution Panel may be reversed and that assessment order be restored. 4. The appellant craves leave to add, alter, amend or delete any other grounds on or before hearing of the appeal.” 2. At the outset Ld.AR submitted that assessee has sought to resolve transfer prising issues arising out of international transactions undertaken with U.S. associated enterprises vide MAP resolution entered between respective competent authorities

In respect of appeal filed by revenue, it has been submitted that, only issue raised is, for excluding travel, telecommunication expenses etc., for computing total turnover and export turnover and excluding loss earned from non-eligible unit for purposes of 10 A deduction.

We note that, DRP by following decision of Hon'ble Karnataka High Court, in the case of CIT v. Tata Elxsi Ltd. reported in [2012] 17 taxmann.com 100, held that, if any expenditure is excluded from export turnover, then the same needs to be excluded from total turnover as well, accordingly, directing Ld.AO to exclude expenses deducted from export turnover from total turnover for computing deduction u/s 10A of the Income-tax Act, 1961. 9. Further in respect of exclusion of loss earned from non- eligible unit for computing profits of eligible unit under section 10 A, DRP relied on decision of Hon’ble Karnataka High Court in case of and CIT v. Yokogava India Ltd. reported in [2012] 21 taxmann.com 154 10. We do not find any infirmity in view taken by DRP/AO as it is supported by ratios held by Hon’ble jurisdictional High Court. There is nothing on record brought by revenue to establish any distinguishing factors to deviate from ratio of Hon’ble jurisdictional High Court.