OAKNET HEALTHCARE PVT LTD ,BANGALORE vs. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-5(1)(2), BANGALORE

Grounds on Transfer pricing issues: i. The learned Assessing officer/TPO/DRP were not justified in confirming the pricing adjustment of Rs. 41,49,488/- on the facts and circumstance of the case. ii. The learned Assessing officer/TPO/DRP were not justified in confirming that the service offered by the appellant were ITeS services, as against the services rendered by the appellant being business support services, on the facts and circumstances of the case. iii. The learned Assessing officer/TPO/DRP were not justified, in not rejecting the comparables selected on the basis of high turnover on the facts and circumstances of the case. iv. The learned Assessing officer/TPO/DRP were not justified in not rejecting the companies selected as the functionality of the companies were different from the business of the appellant, on the facts and circumstances of the case. v. The learned Assessing officer/TPO/DRP were not justified in relying on data which was not available during the course of TP study by the appellant on the facts and circumstances of the case. vi. The learned Assessing officer/TPO/DRP were not justified in restricting the comparision to the impugned year in question, when there were no comparable cases to the appellant on the facts and circumstances of the case. vii. The authorities below are not justified in making a transfer pricing adjustment as their own set of comparables contain profit margins less than the appellant's case and consequently, failure to demonstrate that additions made in these two hands, will make the entire proceeding discriminatory and violative of Article 14 of the Constitution.

Grounds on Depreciation: i. The learned Assessing officer/DRP were not justified in making a disallowance of the depreciation claimed on intangibles to the extent of Rs.60,23,41,019/- as being excessive, on the facts and circumstances of the case. ii. The learned Assessing officer/DRP were not justified in making a disallowance of Rs.33,22,83,957/- in respect of claim of depreciation on Trademarks acquired and utilised for the purpose of business on the facts and circumstances of the case. iii. The learned Assessing officer/DRP were not justified in making a disallowance of Rs.13,01,30,063/- in respect of claim of depreciation acquired and utilised for the purpose of business on Logo and corporate brands on the facts and circumstances of the case. iv. The learned Assessing officer/DRP were not justified in making a disallowance of Rs.6,27,50,000/- in respect of claim of depreciation on goodwill acquired and utilised for the purpose of business on the facts and circumstances of the case. v. The learned Assessing officer/DRP were not justified in making a disallowance of Rs.6,75,00,000/- in respect of claim of depreciation on distribution contracts and relationships (franchisee) acquired and utilised for the purpose of business on the facts and circumstances of the case. vi. The learned Assessing officer/DRP were not justified in making a disallowance of Rs.12,50,000/- in respect of claim of depreciation on technical acquired and utilised for the

The learned Assessing officer/ DRP were not justified in holding that the valuation of the intangibles was highly excessive which is purely on surmise and suspicion and devoid of factual foundation on the facts and circumstances of the case. 6. The learned Assessing officer/DRP were not justified in holding that the acquisition cost of the intangible assets were highly-excessive and consequently denied total deprecation on the same on the facts and circumstances of the case. 7. Without prejudice, the assessing officer ought to have adopted the principle of valuation as he deemed fit and granted depreciation atleast to the said extent and thus the non granting of any deprecation is totally contrary to law and thus the disallowance of depreciation is highly excessive and is required to be substantially reduced. 8. The learned Assessing officer/DRP were not justified in ignoring the fact that the assets acquired were pursuant to the receipt of approval /consent from the regulatory authorities who have verified and vetted the transaction and consequently passed a perverse order on the facts and circumstances of the case. 9. The learned Assessing officer/DRP were not justified in law in denying Depreciation at the prescribed rates in respect of the intangibles, which were capitalised on the premise that the valuation of the same were high, when it is settled law that depreciation cannot be denied to the appellant, on the facts and circumstances of the case.

The learned Assessing officer/DRP were not justified in law in ignoring the fact that the appellant has acquired the intangibles after following the well business practices and upon receiving due sanction of the regulatory authorities in the regular course of business, on the facts and circumstances of case. 11. The learned Assessing officer/DRP were not justified in law and facts, to arrive at the conclusion that the cost of acquisition of the assets were excessive, since he is not an authority on the subject, on the facts and circumstances of the case. 12. The learned Assessing officer and DRP erred in not appreciating that the assessing officer himself for the subsequent assessment year 2014-15 had granted depreciation on several of the intangible assets and thus the non granting of the same for the impugned assessment year is thus perverse and contrary to law on the facts and circumstance of the case. 13. Without prejudice, the learned Assessing Officer ought to have referred the matter to the valuation officer under section 55A of the income tax Act, 1961 in order to obtain a report or from an external agency qualified to do so, on the facts and circumstances of the case. 14. Without prejudice, if it were to be held that the assets acquired were not capital in nature, the same were to be allowed as a revenue expenditure on the facts and circumstances of the case. 15. The appellant denies the liability to pay interest under section 234B and 234D of the Act in view of the fact that there is no liability to additional tax as determined by the learned assessing officer. Without prejudice the rate, period and on what quantum the interest has been levied are not discernable from the order and hence deserves to be cancelled on the facts and circumstances of the case. 16. The appellant craves leave to add, alter, modify, delete or substitute any or all of the grounds and to file a paper book at the time of hearing the appeal.

In view of the above and other grounds that may be taken at the time of the hearing the appeal, the appellant prays that the appeal be allowed in the interest of justice and equity.”