“working capital adjustment”

Transfer PricingSection 92CSection 92C508 judgments

The decision most relied on for working capital adjustment is Sony India (P) Ltd. v. DCIT (114 ITD 448), cited in 131 judgments on BharatTax.

Leading authorities on working capital adjustment

Sony India (P) Ltd. v. DCIT

114 ITD 448 · 2008 · ITAT

131

citing judgments

For transfer pricing purposes, functionally dissimilar entities that have significant business differences must be excluded from the list of comparables for benchmarking analysis. It also provides guidance on the non-allocation of advertisement, marketing, and promotion (AMP) expenses to other entities when incurred solely for the assessee's business.

Pr. CIT v. Kusum Health Care Pvt. Ltd.

398 ITR 66 · 2017 · High Court

100

citing judgments

Not every item of receivables appearing in the accounts of an entity dealing with foreign associated enterprises automatically constitutes an international transaction under Section 92B. A separate adjustment for interest on outstanding receivables is not permissible if the working capital adjustment has already factored in their impact.

Mentor Graphics (Noida) (P) Ltd. v. DCIT

109 ITD 101 · 2007 · ITAT

citing judgments

A working capital adjustment is mandated and a prerequisite for correctly determining the Arm's Length Price (ALP) under Rule 10B(1)(e) and Rule 10B(3) of the Income Tax Rules, 1962. This adjustment accounts for differences in working capital and outstanding receivables between the assessee and comparable companies.

Avenue Asia Advisors Pvt. Ltd. v. DCIT

398 ITR 120 · 2017 · High Court

citing judgments

The Delhi High Court holds that a detailed functional and working capital analysis, considering various factors, is essential before treating outstanding receivables as a separate international transaction for transfer pricing adjustments on notional interest. Simply making an adjustment based on receivables alone without such study distorts the transaction's character.

Indo Rama Synthetics (I) Ltd. v. CIT

330 ITR 363 · 2011 · Supreme Court

citing judgments

For Minimum Alternate Tax (MAT) under Section 115JB, the book profit must reflect the true working results of the company. Capital receipts that are not income cannot be included in book profit, and adjustments based on notes on accounts can be made to arrive at the real profit.

Huawei Technologies India Pvt. Ltd. v. JCIT

101 Taxmann.com 313 · 2019 · ITAT

citing judgments

Working capital adjustments are permissible and crucial for comparability analysis when determining the arm's length price of international transactions, especially when an assessee's claim for such adjustment has been denied.

ITO v. E Value Serve.com

75 Taxmann.com 195 · 2016 · Reported

citing judgments

In transfer pricing analysis, demanding daily balances for working capital adjustments is impractical and improper; adjustments should be based on opening and closing working capital. Transfer pricing inherently involves estimation to ensure comparability.

Genesis Integrating Systems India Pvt Ltd. v. DCIT

53 SOT 159 · 2012 · ITAT

citing judgments

Companies with significantly different turnovers (e.g., one above Rs. 200 crores and another below) cannot be considered comparable in transfer pricing analysis. Turnover is a relevant factor in assessing comparability.

Judgments citing working capital adjustment

Frost & Sullivan (I) P. Ltd, Mumbai vs. DCIT 8(1), Mumbai

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 7899/MUM/2010[2006-07]Status: DisposedITAT Mumbai17 Oct 2022AY 2006-07

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm Dy. Commissioner Of Income Frost & Sullivan (I) P. Ltd. Tax, Tower Vi, Iv Floor, Solitaire Central Circle 8(1), Corporate Park, Chakala, Vs. Andheri (E) Aaykar Bhavan Mumbai-400 093 Mumbai-400 020 (Appellant) (Respondent) Pan No. Aaacf4252A Assessee By : Shri Madhur Agrawal, Ar Revenue By : Shri Sumit Kumar, Sr. Ar Date Of Hearing: 20.07.2022 Date Of Pronouncement : 17/10/2022

For Appellant: Shri Madhur Agrawal, ARFor Respondent: Shri Sumit Kumar, Sr. AR

Section 133(6)Section 143(3)Section 144C(13)Section 144C(5)Section 92C(2)Section 92C(3)

totally different functional and risks profile and in any event, such comparison is made without directing that adjustment for significant economic differences, including working capital adjustment, should be made. (e) the transfer pricing adjustments have been made at the entity level without appreciating that such entity level adjustments have been

Ocwen Financial Solutions Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Special Range-5, Bangalore

In the result, the appeal filed by the assessee is partly allowed

ITA 342/BANG/2021[2016-17]Status: DisposedITAT Bangalore14 Oct 2022AY 2016-17

Bench: Shri George George K, Jm & Shri Laxmi Prasad Sahu, Am It(Tp)A No.342/Bang/2021 : Asst.Year 2016-2017 M/S.Ocwen Financial Solutions The Assistant Commissioner Private Limited Of Income-Tax V. Pritech Park, Survey No.51 To Special Range – 5 64/4, Block No.12, Unit 2, 5B & Bangalore. 6A Floors, Bellandur Village, Sarjapur Marathahalli Ring Road Bengaluru – 560 103. Pan : Aaaco3764E. (Appellant) (Respondent) Appellant By : Sri.Ankur Pai & Sri. K.R.Vasudevan, Advocates Respondent By : Sri.K.Sankar Ganesh, Jcit-Dr Date Of Pronouncement : 14.10.2022 Date Of Hearing : 13.10.2022 O R D E R Per George George K, Jm : This Appeal At The Instance Of The Assessee Is Directed Against Final Assessment Order Dated 30.03.2021 Passed U/S 143(3) R.W.S. 144C(13) Of The I.T.Act. The Relevant Assessment Year Is 2016-2017. 2. The Brief Facts Of The Case Are As Follows: The Assessee Is A Company Engaged In Providing It Enabled Services To Ocwen Mortgage Servicing Inc. Usvi. The Assessee Is A Wholly Owned Subsidiary Of Ocwen Asia Holdings Limited, Mauritius. For The Assessment Year 2016-2017, The Return Of Income Was Filed On 29.11.2016 Declaring Total Income Of Rs.93,31,44,800. The Case Was Selected For Scrutiny

For Appellant: Sri.Ankur Pai & Sri. K.R.Vasudevan, AdvocatesFor Respondent: Sri.K.Sankar Ganesh, JCIT-DR

Section 143(2)Section 143(3)

part of ground 16. The contentions of the learned AR in this regard, ground-wise, are detailed below:- “Ground No.13 - Grant of working capital adjustment: The Appellant submits that it had made claim for grant of working capital adjustment before the TP Officer and the DRP but the same ... been granted. The Appellant relies on the following case laws for grant of working capital adjustment at actuals: Huawei Technologies India (P) Ltd. [2019) 101 taxmann.com 313 (Bang) Altimetrix India Pvt Ltd [IT(TP)A No.477/Bang/2021) Ground No.15 - Exclusion of comparables: The analysis of the Appellant with respect to Functions

M/S. Tivo Tech Private Limited (Formerly Known As Veveo (India) Private Limited), Bangalore vs. Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal by the assessee is partly allowed

ITA 237/BANG/2021[2016-17]Status: DisposedITAT Bangalore12 Oct 2022AY 2016-17

Bench: Shri George George K. & Ms. Padmavathy S

For Appellant: Smt. Tanmayee Rajkumar, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 234BSection 37

observed that payments to assessee are not contingent upon payment received by AEs from their respective customers. Further Ld.AR submitted that working capital adjustment undertaken by assessee includes the adjustment regarding the receivables and thus receivables arising out of such transaction have already been accounted for. Alternatively, he submitted that ... extending credit period with mutual consent and it does not provide any interest clause in case of delay. He also argued that the working capital adjustment takes into account the factors IT(TP)A No.237/Bang/2021 Page 19 of 29 related to delayed receivables and no separate adjustment is required

Csav Group (India) Pvt. Ltd., Gurgaon vs. DCIT, Gurgaon

In the result, appeal by the assessee is partly allowed for statistical purpose

ITA 1941/DEL/2015[2010-11]Status: DisposedITAT Mumbai10 Oct 2022AY 2010-11

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri Rajan R. VoraFor Respondent: Ms. Samruddhi D. Hande

Section 143(3)Section 144CSection 234BSection 271(1)(c)Section 92CSection 92D

comparable companies and therefore no separate adjustment on account of interest on overdue receivable is warranted: 7.3 erred in not allowing working capital adjustment claimed by the Appellant vis-à-vis comparable companies, which would factor the impact of overdue receivables from AES and on consideration of the same ... companies:  Accentia Technologies Ltd,  Infosys BPO Limited;  TCS E-Serve International Ltd, and  TCS E-Serve Ltd. 3. erred in not making suitable working capital adjustment while computing operating margins for the Appellant vis-à-vis the comparables; Transfer Pricing adjustment in respect of Overdue Receivables

Wipro Ge Healthcare Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal filed by the assessee in IT(TP)A No

ITA 703/BANG/2021[2012-13]Status: DisposedITAT Bangalore07 Oct 2022AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri K.R. Pradeep &For Respondent: Shri Praveen Karanth, D.R

Section 143(3)Section 254Section 92C

observed that payments to assessee are not contingent upon payment received by AEs from their respective customers. Further Ld.AR submitted that working capital adjustment undertaken by assessee includes the adjustment regarding the receivables and thus receivables arising out of such transaction have already been accounted for. Alternatively, he submitted that ... extending credit period with mutual consent and it does not provide any interest clause in case of delay. He also argued that the working capital adjustment takes into account the factors related to delayed receivables and no separate adjustment is required in such circumstances. 23.4. On the contrary Ld.CIT.DR submitted

Wipro Ge Healthcare Private Limited (Earlier Known As Ge Medical Systems India Private Limited), Bangalore vs. Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal filed by the assessee in IT(TP)A No

ITA 344/BANG/2021[2006-07]Status: DisposedITAT Bangalore07 Oct 2022AY 2006-07

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri K.R. Pradeep &For Respondent: Shri Praveen Karanth, D.R

Section 143(3)Section 254Section 92C

observed that payments to assessee are not contingent upon payment received by AEs from their respective customers. Further Ld.AR submitted that working capital adjustment undertaken by assessee includes the adjustment regarding the receivables and thus receivables arising out of such transaction have already been accounted for. Alternatively, he submitted that ... extending credit period with mutual consent and it does not provide any interest clause in case of delay. He also argued that the working capital adjustment takes into account the factors related to delayed receivables and no separate adjustment is required in such circumstances. 23.4. On the contrary Ld.CIT.DR submitted

Ntt Data Fa Insurance Systems (India) Private Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 261/BANG/2021[2016-17]Status: DisposedITAT Bangalore03 Oct 2022AY 2016-17

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariit(Tp)A No.261/Bang/2021 Assessment Year: 2016-17

For Appellant: Shri T. Suryanarayana, Sr. A.RFor Respondent: Shri Sumer Singh Meena, D.R

Section 143(3)Section 92C

observed that payments to assessee are not contingent upon payment received by AEs from their respective customers. Further Ld.AR submitted that working capital adjustment undertaken by assessee includes the adjustment regarding the receivables and thus receivables arising out of such transaction have already been accounted for. Alternatively, he submitted that ... extending credit period with mutual consent and it does not provide any interest clause in case of delay. He also argued that the working capital adjustment takes into account the factors related to delayed receivables and no separate adjustment is required in such circumstances. 23.4. On the contrary Ld.CIT.DR submitted

Hewlett Packard (India) Software Operation Private Limited, 2016-17 vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 213/BANG/2021[2016-17]Status: DisposedITAT Bangalore03 Oct 2022AY 2016-17

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariit(Tp)A No.213/Bang/2021 Assessment Year: 2016-17

For Appellant: Shri Padam Chand Khincha, A.RFor Respondent: Capt. Pradeep Arya, D.R

Section 133(6)Section 143(3)Section 92C

erred in not4considering the fact that the outstanding amount from the money advanced by the Appellant would get adjusted in the working capital adjustment and hence no separate adjustment is required. 1.21 The learned AO/learned TPO/Hon’ble DRP erred in computing interest on the outstanding balance from ... further erred in not considering the fact that the outstanding amount from the money advanced by the assessee would get adjusted in the working capital adjustment and hence no separate adjustment is required. They further erred in computing interest on the outstanding balance from the AE by evaluating on invoice

Ge Be Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

In the result, the appeal by the assessee is partly allowed

ITA 304/BANG/2022[2017-18]Status: DisposedITAT Bangalore29 Sept 2022AY 2017-18

Bench: Shri N. V. Vasudevan & Shri Chandra Poojariit(Tp)A No.304/Bang/2022 Assessment Year : 2017-18 Vs. Dcit, M/S. Ge Be Pvt. Ltd., Circle – 3(1)(1), 60, Export Promotion Industrial Park, Bengaluru. Whitefield, Bengaluru – 560 066. Pan : Aaacg 6714 A Assessee Respondent Assessee By : Shri. Aliasgar Rampurawala, Ca Revenue By : Shri. Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 27.09.2022 Date Of Pronouncement : 29.09.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. Aliasgar Rampurawala, CAFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 144C(13)Section 92(1)Section 92B(1)

hold and direct accordingly. 15. Apart from the aforesaid exclusions and inclusion, leaned Counsel for the assessee has also prayed for grant of working capital adjustment. The grievance of the assessee in this regard has been projected in ground No.4 raised before the Tribunal. The ground with regard to inclusion ... exclusion is contained in ground Nos.5 to 7 and additional ground No.21. 16. In so far as the grant of working capital adjustment is concerned, the DRP gave its decision by observing that (i) The assessee has not demonstrated with any data or information as to the impact of working

Deputy Commissioner of Income Tax Officer Circle-3(1)(1), Bangalore vs. M/S Fmc India Private Limited, Bangalore

In the result, appeal filed by assessee stands partly allowed and appeal filed by revenue stands allowed for statistical purposes

ITA 2732/BANG/2018[2013-14]Status: DisposedITAT Bangalore29 Sept 2022AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2013-14 M/S. Fmc India Pvt. The Assistant Ltd., Commissioner Of Embassy Star 1St Floor, Income Tax, No. 8 Palace Road, Circle 3(1)(1), Bangalore – 560 052. Bangalore. Vs. Pan: Aaacf4579N Appellant Respondent & Assessment Year : 2013-14 (By Revenue) Assessee By : Shri Nageswar Rao, Advocate Revenue By : Smt. S. Praveena, Cit Drp-2 Date Of Hearing : 07-07-2022 Date Of Pronouncement : 29-09-2022 Order Per Beena Pillaipresent Cross Appeals Are Filed By The Assessee & Revenue Against Order Dated 23/07/2018 Passes By The Ld.Cit(A)-3, Bangalore For Assessment Year 2013-14 On Following Grounds Of Appeal:

For Appellant: Shri Nageswar Rao, AdvocateFor Respondent: Smt. S. Praveena, CIT DRP-2

Section 250Section 37(1)

2732/Bang/2018 Accordingly Ground no. 7 stands partly allowed & 12 stands allowed. 14. Ground No.8 is in respect of non granting of Working Capital Adjustment in respect of the comparables to iron out differences if any. We have perused the submissions advanced by both sides in the light of records placed ... same were not furnished by the assessee. We direct the assessee to furnish all details to assist the Ld.AO/TPO to compute Working Capital Adjustment on actuals. We also draw support from the observation of Coordinate Bench of this Tribunal in case of Page

M/S Fmc India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle-3(1)(1), Bangalore

In the result, appeal filed by assessee stands partly allowed and appeal filed by revenue stands allowed for statistical purposes

ITA 2611/BANG/2018[2013-14]Status: DisposedITAT Bangalore29 Sept 2022AY 2013-14

For Appellant: Shri Nageswar Rao, AdvocateFor Respondent: Smt. S. Praveena, CIT DRP-2

Section 250Section 37(1)

M/S. Dell International Services India Private Limited ( Formerly Known As Dell Computer India Private Limited), Bangalore vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Bangalore

In the result, appeal of the assessee is partly allowed

ITA 392/BANG/2021[2004-05]Status: DisposedITAT Bangalore28 Sept 2022AY 2004-05

Bench: Shri N. V. Vasudevan & Shri Chandra Poojariit(Tp)A No.392/Bang/2021 Assessment Year : 2004-05 M/S. Dell International Services The Deputy Commissioner Vs. India Pvt. Ltd., Of Income Tax, (Formerly Known As Dell Circle – 2(1)(1), Computer India Pvt. Ltd.,) Bengaluru. 12/1A, 12/2A, 13/1A, Diyashree Greens, Challaghatta Village, Varthur Hobli, Bengaluru-560 071. Pan : Aaach 1925 Q Appellant Respondent Assessee By : Smt. Tanmayee Rajkumar, Advocate Revenue By : Shri. Sumer Singh Meena, Cit(Dr)(Itat), Bangalore Date Of Hearing : 26.09.2022 Date Of Pronouncement : 28.09.2022 O R D E R Per N. V. Vasudevan: This Is An Appeal By The Assessee Against The Final Order Of Assessment Dated 26.04.2021, Passed By The Dcit, Circle – 2(1)(1), Bengaluru, Under Section 143(3) R.W.S. 144C R.W.S. 254 Of The Income Tax Act, 1961 (Hereinafter Called The ‘Act’) In Relation To Assessment Year 2004-05. 2. The Assessee Is The Subsidiary Of Dell International Usa & Is Engaged In The Provision Of Call Centre Support Services, Back-Office Support Services & Offshore Development Support Services [Software Development (“Swd”)] To Its Associated Enterprises (“Aes”). The Assessee Provided The Aforesaid Services To It(Tp)A No.392/Bang/2021 Page 2 Of 12

For Appellant: Smt. Tanmayee Rajkumar, AdvocateFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bangalore

Section 143(3)Section 92Section 92C

India Ltd. 46.20 Average PLI 19.72 Computation of arm’s length price by the TPO and the adjustment made: Average PLI 19.72% Less: Working Capital Adjustment 2% Adjusted average of the comparables 17.72% Operating Cost Rs.25,98,63,000/- Arm’s Length Revenue – 117.72% of Operating Cost Rs.30

Continuserve Softech India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Bangalore

In the result, the appeal by the Assessee is partly allowed

ITA 242/BANG/2021[2016-17]Status: DisposedITAT Bangalore23 Sept 2022AY 2016-17

Bench: Shri N. V. Vasudevan & Shri Chandra Poojariit(Tp)A No.242/Bang/2021 Assessment Year : 2016-17 Vs. Dcit, M/S. Continuserve Softech India Pvt. Ltd., Circle – 2(1)(1), Prathik Tech Park, 2Nd & 3Rd Floor, Bengaluru. Sy. No.93/1, Veerasandra Village, Attibele Hobli, Hosur Road, Electronic City Phase 1, Bengaluru – 560 100. Pan : Aaacc 8342 A Assessee Respondent Assessee By : Shri. Darpan Kirpalani, Advocate Revenue By : Shri. Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 22.09.2022 Date Of Pronouncement : 23.09.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. Darpan Kirpalani, AdvocateFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 144C(13)Section 92Section 92(1)Section 92B(1)

Cybage Software Pvt. 62.90% 68.68% 68.82% 66.45% Ltd. 35th 24.83% Percentile Median 28.20% 65th 32.42% Percentile 5. The TPO did not give working capital adjustment to the margin of the comparable companies as claimed by the Assessee. TPO computed the Addition to total income on account of adjustment ... stand of the Assessee that the correct profit margin (weighted average NC) is 12.03%. (v) Allow working Capital Adjustment as prayed for by the Assessee. The grievance in this regard is projected by the Assessee in Grd.No.7 of the grounds of appeal raised by the Assessee. (vi) Exclude Infobeans

M/S. Te Connectivity India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 2, Ltu, Bangalore

In the result, all these appeals are partly allowed

ITA 2593/BANG/2019[2015-16]Status: DisposedITAT Bangalore23 Sept 2022AY 2015-16

Bench: Shri N. V. Vasudevan & Shri.Chandra Poojariit(Tp)A Nos. & Appellant Respondent Assessment Year 2593/Bang/2019 M/S. Te Connectivity India Private Limited, Acit, 2015-16 Te Park, 22B, Doddenakundi Corporation, Circle – 2, 2Nd Phase, Industrial Area, Large Taxpayer Unit, Whitefield Road, Bengaluru Bengaluru – 560 048. Pan: Aabct 7374 C 372/Bang/2021 -Do- -Do- 2016-17 200/Bang/2022 -Do- Dcit, Ltu, 2017-18 Circle – 2, Bengaluru. 716/Bang/2022 -Do- Acit, 2018-19 Circle – 7(1)(1), Bengaluru. Assessee By : Shri Sriram Seshadri, Advocate Revenue By : Shri Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 21.09.2022 Date Of Pronouncement : 23.09.2022 O R D E R Per N. V. Vasudevan:

For Appellant: Shri Sriram Seshadri, AdvocateFor Respondent: Shri Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 144BSection 92Section 92ASection 92F

operating profit earned on sales of the comparables was computed. • Based on the above analysis, the range of the net margins (prior to working capital adjustment) of the comparable companies was computed. The assessee's net margin in the licensed manufacturing segment being within the range of comparables' margins

M/S. Hewlett-Packard (India) Software Operation Private Limited, Bangalore vs. Joint Commissioner of Income Tax, Special Range- 3, Bangalore

In the result the appeal of the assessee is partly allowed

ITA 2575/BANG/2019[2015-16]Status: DisposedITAT Bangalore20 Sept 2022AY 2015-16

Bench: Shri N.V. Vasudevan & Ms. Padmavathy S.It(Tp)A No. 2575/Bang/2019 (Assessment Year: 2015-16)

For Appellant: Shri Padam Chand Khincha, CAFor Respondent: Shri Biju M.K. , CIT-DR

Section 115JSection 133(6)Section 143(2)Section 143(3)Section 28

section 133(6) of the Act is inappropriate to object or reject the TP study undertaken by the appellant. vi. Ground No. 7: Working capital adjustment and risk adjustment vii. Ground No. 8: Other transfer pricing related grounds viii. Ground No. 9: Assets received on free of cost basis ... grounds raised,during the course of hearing the learned A.R. pressed for exclusion and inclusions of certain comparables as listed below and also working capital adjustments: Exclusions (a) Mindtree Limited (b) Larsen & Toubro Infotech Limited (c) Persistent Systems Limited (d) Infosys Limited Inclusions (a) I2T2 India Limited (b) Evoke Technologies

M/S. Harman Connected Services Corporation India Private Limited, Bengaluru vs. Assistant Commissioner of Income Tax, Circle- 3(1)(2), Bengaluru

In the result, the appeal is partly allowed

ITA 2243/BANG/2019[2015-16]Status: DisposedITAT Bangalore16 Sept 2022AY 2015-16

Bench: Shri N.V. Vasudevan & Ms. Padmavathy S

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Shri. Biju, M.K., CIT(DR)(ITAT), Bengaluru

Section 115JSection 143(2)Section 143(3)Section 14ASection 80GSection 92C

months LIBOR + 400 basis points. The assessee raised objections before the DRP by submitting that the interest on delayed receivables is subsumed in working capital adjustment and that a separate adjustment is not required. The assessee also submitted that the interest cost is embedded dint eh pricing of the services ... contingent upon payment received by AEs from IT(TP)A No.2243/Bang/2019 Page 5 of 24 their respective customers. Further Ld.AR submitted that working capital adjustment undertaken by assessee includes the adjustment regarding the receivables and thus receivables arising out of such transaction have already been accounted for. Alternatively, he submitted

Walvoil Fluid Power India Private Limited, Bengaluru vs. Joint Commissioner of Income Tax, Circle-7(1)(1), Bengaluru

In the result, the appeal by the assessee is allowed

ITA 339/BANG/2022[2011-12]Status: DisposedITAT Bangalore14 Sept 2022AY 2011-12

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sit(Tp)A No.339/Bang/2022 Assessment Year : 2011-12 Walvoil Fluid Power India Pvt. Ltd., Vs. The Deputy Commissioner No.19, 2Nd Cross, 2Nd Main, Of Income Tax, Kiadb Attibele Industrial Area, Circle 7(1)(2), Attibele, Anekal Taluk, Bengaluru. Bengaluru – 562 107. Pan: Aaacw 5954E Appellant Respondent Appellant By : Shri R.E. Balasubramaniyan, Ca Respondent By : Dr. Shankar Prasad, K., Addl. Cit-Dr Date Of Hearing : 07.09.2022 Date Of Pronouncement : 14.09.2022 O R D E R Per Padmavathy S.This Appeal Is Against The Final Order Of The Ao Passed U/S. 143(3) R.W.S. 144C(13) Of The Income-Tax Act, 1961 [The Act] Dated 28.01.2022 For The Assessment Year 2011-12 On The Following Grounds:- “1. That The Order Of The Ld. Ao Insofar As It Is Prejudicial To The Interests Of The Appellant Is Opposed To Law & Facts Of The Case. 2. That In The Calculation Of Alp The Ld. Ao Erred In Including Entities Such As M/S Dhp India Ltd & The Sundram Bleistahl

For Appellant: Shri R.E. Balasubramaniyan, CAFor Respondent: Dr. Shankar Prasad, K., Addl. CIT-DR

Section 143(2)Section 143(3)Section 37(1)

recomputing the operating margins of the assessee. While making the TP adjustment the TPO included two more comparables, did not consider working capital adjustment and also made an adjustment to the operating margins of the assessee which resulted in the above TP adjustment. IT(TP)A No.339/Bang/2022 Page ... adjustment was retained as it is since the DRP in the remand proceedings confirmed the comparables and in the original DRP order the working capital adjustment and adjustment to margins were confirmed the DRP. The assessee is in appeal once again against IT(TP)A No.339/Bang/2022 Page

Hsbc Professional Services (I) P. Ltd, Mumbai vs. DCIT RG 8(2), Mumbai

ITA 8823/MUM/2011[2006-07]Status: DisposedITAT Mumbai13 Sept 2022AY 2006-07

Bench: Shri Aby T Varkey () & Shri Om Prakash Kant () Assessment Year: 2006-07 Jcit-8(2), (Osd), M/S Hsbc Professional Services Room No. 216-A, Aayakar (India) Pvt. Ltd., Bhavan, M.K. Road, Vs. Kamla Bhavan, Swami Nityanand Mumbai-400020. Marg, Andheri (East), Mumbai-400069. Pan No. Aabch 0705 R Appellant Respondent Assessment Year: 2006-07 Hsbc Professional Services The Deputy Commissioner Of (India) Private Limited, Income-Tax Range 8(2), 6Th Floor, Shiv Building, Cts Vs. Mumbai. No. 139 & 140B, Sahar Road, Vile Parle (East), Mumbai-400057. Pan No. Aabch 0705 R Appellant Respondent Assessee By : Mr. Niraj Sheth, Ar Revenue By : Mr. V.K. Agarwal, Dr Date Of Hearing : 01/07/2022 Date Of Pronouncement : 13/09/2022

For Appellant: Mr. Niraj Sheth, ARFor Respondent: Mr. V.K. Agarwal, DR

Section 92CSection 92C(2)Section 92D

contention of the assessee for TPO rejected the contention of the assessee for TPO rejected the contention of the assessee for providing working capital adjustment as well as risk adjustment in providing working capital adjustment as well as risk adjustment in providing working capital adjustment as well as risk adjustment

DCIT RG 8(2) (OSD), Mumbai vs. Hsbc Professional Services (I) P. Ltd, Mumbai

ITA 8753/MUM/2011[2006-07]Status: DisposedITAT Mumbai13 Sept 2022AY 2006-07

For Appellant: Mr. Niraj Sheth, ARFor Respondent: Mr. V.K. Agarwal, DR

Section 92CSection 92C(2)Section 92D

Schneider Electric It Business India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Ltu, Circle-2, Bangalore

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 185/BANG/2022[2017-18]Status: DisposedITAT Bangalore01 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariit(Tp)A No.185/Bang/2022 Assessment Year: 2017-18

For Appellant: Shri Rohit Tiwari, A.RFor Respondent: Shri Manjunath Karkihalli, D.R

Section 143(3)Section 144BSection 144C(13)Section 92D

without prejudice basis; 4.8. disregarding the corrected margins of comparable companies submitted by the Appellant; 4.9. disregarding various economic adjustments including working capital adjustment in determining the arm's length profit margin; and 4.10. disregarding judicial pronouncements in India while undertaking the TP adjustment. Corporate tax 5. Disallowance of expenditure ... same by stating that the comparable proposed by the assessee are not available in the search matrix applied by the Ld. TPO. 3. Working capital adjustment and margin correction: The Ld. TPO did not allow working capital adjustment to the assessee in arriving at the arm's length margin