M/S. AITHENT TECHNOLOGIES PRIVATE LTD.,NEW DELHI vs. ITO, NEW DELHI

PDF · subscribers
ITA 4536/DEL/2013Status: DisposedITAT Delhi21 September 2016AY 2009-104 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The tribunal held that no separate addition on account of transfer pricing adjustment should be made for transactions between the Indian head office and its Canadian branch due to aggregation of financial results. It also held that no capacity utilization adjustment could be allowed and the arm's length price for software development services needed re-determination.

What were the facts?

The assessee's appeal for AY 2009-10 was heard along with the appeal for AY 2008-09, with both parties agreeing that the facts and circumstances were similar. No separate arguments were made for this appeal.

What were the issues?

Whether transfer pricing adjustments are required for inter-branch transactions and whether the arm's length price of international transactions needs re-determination.

Which sections of the Income-tax Act were involved?

Not specified

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES : I-1 : NEW DELHI

Before: SHRI R.S. SYAL & SHRI KULDIP SINGH

For Appellant: Shri Akhilesh Gupta, Advocate
For Respondent: Shri Neeraj Kumar, Sr. DR
Hearing: 19.09.2016Pronounced: 21.09.2016

ORDER

PER R.S. SYAL, AM:

1.

This appeal filed by the assessee emanates from the order passed by the CIT(A) on 31.05.2013 in relation to the assessment year 2009-10.

2.

We have heard the rival submissions and perused the relevant material on record. This appeal by the assessee was argued along with the appeal for the assessment year 2008-09 for which a separate detailed order has been passed. Both the sides are in agreement that the facts and circumstances of this appeal are, mutatis mutandis, similar to those for the Assessment Year 2008-09. In fact, no separate arguments were made by the either side for this appeal except for adopting their respective arguments made for the A.Y. 2008-09. Following the view taken in our order for the AY 2008-09, we hold as under for the instant year that : -

(i) No separate addition on account of transfer pricing adjustment for the transactions between Indian head office and branch office in Canada should be made because of the aggregation of the financial results of branch office, Canada with the Indian head office;

(ii) No capacity utilization adjustment as claimed, can be allowed; and (iii) The arm’s length price of the international transaction of providing software development services by the assessee to its associated enterprise, Aithent Inc., US, should be re- determined by applying the filters in the manner as discussed in our order for the AY 2008-09.

3.

The impugned order is set aside and the AO/TPO is directed to determine the ALP of the international transactions afresh in the light of our above discussion.

4.

In the result, the appeal is allowed for statistical purposes.

The order pronounced in the open court on 21.09.2016.

Recent GST High Court judgments

Search GST case law →