M/S MIRACLE SOFTWARE SYSTEMS (I) PVT., LTD.,VISAKHAPATNAM vs. THE DCIT, VISAKHAPATNAM

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ITA 43/VIZ/2015Status: DisposedITAT Visakhapatnam21 July 2022AY 2008-0911 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that depreciation, even if extraordinary, should be considered part of operating costs for ALP computation as the assets were used for services to AEs. However, it directed the AO to verify and give effect to the assessee's positive working capital adjustment.

What were the facts?

The assessee, a software development company, reported international transactions with associated enterprises. The TPO determined the Arm's Length Price (ALP) with a significant adjustment, leading to an addition to the assessee's total income. The CIT(A) partly allowed the appeal.

What were the issues?

Whether extraordinary depreciation should be excluded from operating costs for ALP determination and whether a positive working capital adjustment should be considered.

Which sections of the Income-tax Act were involved?

Section 92CA,Section 32,Section 10A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE

For Appellant: CA प्रत्यधथी की ओर से /
Hearing: 31/05/2022

आदेश की प्रतिलिपि अग्रेपिि/Copy of the order forwarded to:- ननधधाररती/ The Assessee – M/s. Miracle Software Systems (I) Pvt Ltd, 1. MIG-49, Lawsons Bay Colony, Visakhapatnam. रधजस्व/The Revenue – Deputy Commissioner of Income Tax, Circle- 2. 3(1), Aayakar Bhavan, Dabagardens, Visakhapatnam – 530020. 3. The Chief Commissioner of Income Tax, Visakhapatnam. (ii) Commissioner of Income Tax-1, Visakhapatnam. आयकर आयुक्त ( अऩीऱ)/ The Commissioner of Income Tax (Appeals), 4. Visakhapatnam.

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