“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

DCIT 2(3), Mumbai vs. Tech Mahindra P.Ltd, Mumbai

In the result, appeal by the assessee is allowed for statistical purpose, while the appeal by the Revenue is dismissed

ITA 3033/MUM/2014[2008-09]Status: DisposedITAT Mumbai26 Jul 2022AY 2008-09

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri H.P. MahajaniFor Respondent: Shri Chandra Vijay

Section 10ASection 250Section 2D

international transaction by searching Indian comparables. The TPO selected a set of 20 companies as comparable having average margin of 23.65%. After granting working capital adjustment, the arm’s length mean margin on sales was arrived at 17.97%. Accordingly, the TPO made an adjustment

M/S Ingersoll-Rand Technologies and Services Private Limited, Bangalore vs. The Assistant Commissioner of Income Tax Circle-3(1)(1), Bangalore

ITA 728/BANG/2017[2012-13]Status: DisposedITAT Bangalore25 Jul 2022AY 2012-13

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

For Respondent: Shri Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 143(3)

retained the comparables selected by the TP Officer in his benchmarking analysis. The DRP however, directed the TP Officer to compute mean of working capital adjustment in respect of the comparables. The DRP also rejected the Assessee’s arguments and upheld the adjustment made by the TP Officer towards reimbursement ... segment as a KPO and applied fresh filters to choose comparables and arrived at a margin of 35.76% and without considering the working capital adjustment which resulted in a TP adjustment of Rs.20,67,69,435. The DRP upheld the order of the TP Officer characterizing the EDS segment

Cisco Systems Capital (India) Private Limited, Bengaluru vs. Joint Commissioner of Income Tax, Circle- 2(1)(1), Bangalore

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

ITA 321/BANG/2022[2017-18]Status: DisposedITAT Bangalore21 Jul 2022AY 2017-18

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Rajan Vora, A.RFor Respondent: Shri G. Manoj Kumar, D.R

Section 115JSection 142(1)Section 143(2)Section 143(3)Section 144C(5)

transaction denominated in USD. 9. Facts of the case are that the plea advanced by the assessee that outstanding amount gets adjusted in working capital adjustment and that a separate adjustment is not required. It was contended that interest cost embedded in the pricing of the services and that ... working capital adjustment would take into account the differences in the levels of account receivables and accounts payable vis-à-vis the comparable companies. But the assessee has not filed any factual information as to the extended credit period and its impact on the profitability or pricing of the transaction

M/S. Sap Labs India Private Limited, Bangalore vs. Joint Commissioner of Income Tax, Special Range-6, Bangalore

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

ITA 606/BANG/2021[2008-09]Status: DisposedITAT Bangalore21 Jul 2022AY 2008-09

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Appeal No. Appellant Respondent Year M/S. Sap Labs India Pvt. Ltd., No. 138, Export It(Tp)A No. Promotion Industrial 2008-09 606/Bang/2021 Park, Whitefield, Bangalore – 560 066. Pan: Aafcs3649P The Joint M/S. Sap Labs India Commissioner Of Pvt. Ltd. Income Tax, (Successor To M/S. Special Range – 6, Success Factors Bangalore. Business Solutions It(Tp)A No. India Pvt. Ltd.), 2015-16 2510/Bang/2019 No. 138, Export Promotion Industrial Park, Whitefield, Bangalore – 560 066. Pan: Aafcs3649P

For Appellant: Shri Aliasger Rampurwala, CA

Section 3(1)(b)

Larsen & Tubro Infotech Ltd. 5. Infosys Ltd. 10. Ground nos. 4.11 & 4.13 are in respect of adopting correct margin and to grant working capital adjustment. Page 17 IT(TP)A Nos. 606/Bang/2021 & 2510/Bang/2019 11. Before we undertake the comparability analysis, it is necessary to examine the functions, assets owned ... submitted that assessee same has been not argued at the instruction of the assessee. 15. Ground nos. 4.11 & 4.13 assessee is seeking appropriate Working Capital Adjustment in respect of the comparables. We direct the Ld.AO to consider the claim of assessee by granting the Working Capital Adjustment on actual. Page

On Semiconductor Technology India Private Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

In the result, the additional ground raised by the assessee is allowed for statistical purposes

ITA 291/BANG/2021[2016-17]Status: DisposedITAT Bangalore21 Jul 2022AY 2016-17

For Appellant: Sri.Chavali Narayan, CAFor Respondent: Dr.Manjunath Karkihalli, CIT-DR

Section 143(2)Section 143(3)Section 92C

considered closely related to the main international transaction of SWD services. The TPO has further rejected the assessee’s plea for working capital adjustment on the operating margins of the comparables. In this regard, the TPO has proceeded to re- characterize the trade receivable from AEs as loan ... calculating the operating margins. The ground of the assessee is accordingly allowed for statistical purposes. Ground 5.5 17. Ground 5.5 is dealing with working capital adjustment. The assessee has submitted that TPO did not allow any adjustment on working capital. Further, the DRP did not allow relief on this count

M/S. Success Factors Business Solutions India Private Limited (Now Merged With Sap Labs India Private Limited), Bangalore vs. Joint Commissioner of Income Tax, Special Range - 6, Bangalore

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

ITA 2510/BANG/2019[2015-16]Status: DisposedITAT Bangalore21 Jul 2022AY 2015-16

For Appellant: Shri Aliasger Rampurwala, CA

Section 3(1)(b)

M/S Te Connectivity India Pvt Ltd, Bengaluru vs. Deputy Commissioner of Income Tax, Ltu, Circle-1, Bengaluru

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

ITA 2680/BANG/2017[2013-14]Status: DisposedITAT Bangalore18 Jul 2022AY 2013-14

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Sumeet Khurana, CAFor Respondent: Shri V.S. Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 143(3)Section 40Section 92

license manufacturing segment. (iv) Ground No.6 pertains to inclusion & exclusion of comparables in the contract manufacturing segment. (v) Ground No.8 is regarding the working capital adjustment. (vi) Ground No.9 is regarding the TP adjustment made towards intra-group services. (vii) Ground No.10 is with regard to non-grant of proportionate ... learned DRP has erred, in law and in facts, in upholding the approach of the learned AO/ learned TPO in not providing working capital adjustment in relation to the Contract Manufacturing segment.” 43. The TPO was of the view that the assessee is a captive unit remunerated on cost plus

India Medtronic Pvt Ltd, Mumbai vs. Asst CIT 10 (1)91), Mumbai

In the result, ground No.54 of the appeal is allowed for statistical purpose

ITA 7935/MUM/2019[2015-16]Status: DisposedITAT Mumbai15 Jul 2022AY 2015-16

Bench: Shri Vikas Awasthy & Shri M. Balaganeshआअसं. 7935/मुं/2019 ("न.व. 2015-16) India Medtronic Private Limited, 1241, Solitaire Corporate Park, Bldg.No.12, 4Th Floor, Andheri-Ghatkopar Link Road, Andheri(E), Mumbai – 400 093 Pan:Aaaci-4227-Q ...... अपीलाथ" /Appellant बनाम Vs. Assistant Commissioner Of Income Tax-10(1)(1), Room No.209, Aaykar Bhavan, M.K.Road, Mumbai – 400 020. ..... ""तवाद"/Respondent अपीलाथ" "वारा/ Appellant By : Shri Rajan R. Vora, C.A With Shri Nikhil Tiwari ""तवाद" "वारा/Respondent By : Shri Yogesh Kamath, Cit-Dr With S/Shri Satya Pinisetty/R.A.Dhyani सुनवाई क" "त"थ/ Date Of Hearing : 22/04/2022 घोषणा क" "त"थ/ Date Of Pronouncement : 17/07/2022 आदेश/ Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Against The Assessment Order Dated 25/10/2019 For The Assessment Year 2015-16 Passed Under Section 143(3) R.W.S. 144C(13) Of The Income Tax Act, 1961 [In Short ‘The Act’].

For Appellant: Shri Rajan R. Vora, C.A with Shri Nikhil TiwariFor Respondent: Shri Yogesh Kamath, CIT-DR with S/Shri Satya Pinisetty/R.A.Dhyani

Section 143(3)

pressing grounds No.28 to 32. He is only restricting his submissions on grounds No.33 to 35, wherein the assessee is seeking working capital adjustment while computing operating margin of comparable companies for the purpose of determining ALP. The ld.Authorized Representative for the assessee submitted that in assessment year ... No.7263/Mum/2018 the Tribunal granted working capital adjustment and restored the issue back to the file of TPO. While giving effect to the order of Tribunal, the Assessing Officer allowed working capital adjustment after seeking comments from the TPO. The ld.Authorized Representative for the assessee referred to the Order Giving effect

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

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

ITA 206/BANG/2021[2016-17]Status: DisposedITAT Bangalore14 Jul 2022AY 2016-17

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 206/Bang/2021 Assessment Year : 2016-17 M/S. Epson India Pvt. Ltd., The Deputy 12Th Floor, The Milenia, Commissioner Of Tower A, Income Tax, No. 1,Murphy Road, Circle 2 (1)(1), Ulsoor, Vs. Bangalore. Bangalore – 560 008. Pan: Aaace7858F Appellant Respondent : Shri Padamchand Khincha, Assessee By Ca : Dr. Manjunath Karkihalli, Revenue By Cit Dr Date Of Hearing : 15-06-2022 Date Of Pronouncement : 14-07-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Final Assessment Order Dated 25/03/2021 Passed By National E-Assessment Centre, Delhi For A.Y. 2016-17 On Following Grounds Of Appeal: “General Ground 1. The Orders Passed By Learned Additional / Joint / Deputy / Assistant Commissioner Of Income Tax / Income- Tax Officer, National E-Assessment Centre (Hereinafter Referred As "Ao" For Brevity), Learned Deputy Commissioner Of Income Tax (Tp) — 1(2)(1), Bangalore (Hereinafter Referred As "Tpo" For Brevity) & The Honourable Drp-1

For Respondent: Shri Padamchand Khincha

making proper adjustment for enterprise level and transactional level differences between the Appellant and the comparable companies: (ii) Not providing working capital adjustment while computing the Arm's length price; and (iii) Not recognizing that the Appellant was insulated from risks, as against comparables, which assume these risks and therefore ... thus computed proposed adjustment under the business support service segment being the shortfall at Rs.20,54,912/-. The Assessing Officer also rejected the Working Capital Adjustment to the assessee. Thus the total adjustment proposed by the Ld.TPO under 92CA are as under: Particulars Amount AMP Expenditure

M/S Subex Limited, Bangalore vs. Income Tax Officer Ward-6(1)(4), Bangalore

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

ITA 107/BANG/2019[2014-15]Status: DisposedITAT Bangalore14 Jul 2022AY 2014-15

Bench: Smt. Beena Pillai & Shri. Laxmi Prasad Sahuit(Tp)A No. 107/Bang/2019 Assessment Year : 2014-15 M/S. Subex Ltd., Rmz Ecoworld, The Income Tax Outer Ring Road, Officer, Devarabisanahalli, Ward – 6 (1)(4), Bangalore – 560 103. Bangalore. Vs. Pan: Aabcs9255R Appellant Respondent Assessee By : Shri Ajay Rotti, Ca : Shri Sunil Kumar Singh, Cit- Revenue By Dr Date Of Hearing : 07-06-2022 Date Of Pronouncement : 14-07-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Order Dated 26/10/2018 Passed By Ld.Ito, Ward – 6(1)(4), Bangalore For A.Y. 2014-15 On Following Grounds Of Appeal: “The Grounds Stated Hereunder Are Independent Of & Without Prejudice To One Another. The Appellant Submits As Under: 1. Assessment & Reference To Learned Transfer Pricing Officer Are Bad In Law 1.1. The Income Tax Officer. Ward — 6(1)(4), Bangalore (Learned Assessing Officer Or 'Ld. Ao') Erred In Making A Reference To The Deputy Commissioner Of Income-Tax, Transfer Pricing —Range 2(2)(1) (Learned Transfer Pricing Officer' Or 'Ld. Tpo'), Inter Alia, Since He Has Not Recorded

For Appellant: Shri Ajay Rotti, CA

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

prudently applicable, has been implicitly factored by the Appellant in pricing its transactions with its Associated Enterprises and could be verified using a working capital adjustment. 7. Erroneous levy of interest under section 234A and 234B 7.1. The Ld. AO has erred in levying interest ... 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. 10.3 On the contrary Ld.CIT.DR submitted

M/S. Yahoo Software Development India Private Limited, Bengaluru vs. The Joint Commissioner of Income Tax, Special Range- 7, Bangalore

In the result, the appeal filed by the assessee stands allowed as indicated hereinabove

ITA 178/BANG/2022[2017-18]Status: DisposedITAT Bangalore11 Jul 2022AY 2017-18

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 178/Bang/2022 Assessment Year : 2017-18 M/S. Yahoo Software Development India Pvt. Ltd., Torrey Pines, The Joint Embassy Golf Links Commissioner Of Business Park, Income-Tax, Off Indira Nagar – Special Range – 7, Koramangala Vs. Bengaluru. Intermediate Ring Road, Bengaluru – 560 071. Pan: Aaacy1876D Appellant Respondent Assessee By : Ms. Amulaya, Advocate : Shri Sumer Singh Meena, Cit Revenue By Dr Date Of Hearing : 11-07-2022 Date Of Pronouncement : 11-07-2022 Order Per Beena Pillaipresent Appeal Is Filed By The Assessee Against The Order Dated 25/01/2022 Passed By National Faceless Assessment Centre, Delhi For A.Y. 2017-18 On Following Grounds Of Appeal:

For Appellant: Ms. Amulaya, Advocate

Section 92A(2)(a)

Persistent Systems Ltd. c) Larsen & Toubro Infotech Ltd. d) Mindtree Ltd. 3. In Ground nos. 2.10 – 2.11, the assessee is seeking working capital adjustment and in Ground no. 3.1, the assessee is seeking rectification of tax credit eligible to assessee under 115JAA. 4. The Ld.AR submitted that Coordinate Bench ... Persistent Systems Ltd., Mindtree Ltd. and L&T Infotech Ltd. from the final list. 6. Ground nos. 2.10 – 2.11 – The Ld.AR submitted that working capital adjustment was not been granted while computing the margin of the comparables. 7. It is submitted that assessee had given working capital adjustment computation before

M/S. Subex Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 6(1)(2), Bangalore

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

ITA 2579/BANG/2019[2015-16]Status: DisposedITAT Bangalore11 Jul 2022AY 2015-16

Bench: Shri Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 2579/Bang/2019 Assessment Year : 2015-16 M/S. Subex Ltd., The Deputy Rmz Ecoworld, Commissioner Of Outer Ring Road, Income Tax, Devarabisanahalli, Circle – 6(1)(2), Bangalore – 560 103. Vs. Bangalore. Pan: Aabcs9255R Appellant Respondent Assessee By : Shri Ajay Rotti, Ca : Shri Sumer Singh Meena, Revenue By Cit-Dr Date Of Hearing : 11-07-2022 Date Of Pronouncement : 11-07-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Final Assessment Order Dated 23/10/2019 Passed By Ld.Dcit, Circle – 6(1)(2), Bangalore For A.Y. 2015-16 On Following Grounds Of Appeal: “The Grounds Stated Hereunder Are Independent Of & Without Prejudice To One Another. The Appellant Submits As Under: 1. Erroneous Transfer Pricing Adjustments Arising From Interest On Trade Receivables 1.1. The Deputy Commissioner Of Income Tax, Circle - 6(1)(2), Bangalore (Learned Assessing Officer' Or 'Ld. Ao') / Assistant Commissioner Of Income Tax, Transfer Pricing Circle - 1(3)(1) ('Learned Transfer Pricing Officer' Or 'Ld.

For Appellant: Shri Ajay Rotti, CA

Section 234ASection 234BSection 271(1)(c)

implicitly factored by the Appellant in pricing its transactions with its AEs and could be verified to be arm's length using a working capital adjustment even on the comparable companies purportedly selected by the TPO in the transfer pricing order. 1.6. Without prejudice to above ... hence it is an international transaction as per explanation to section 92 B of the Act. Alternatively, it also argued that in TNMM, working capital adjustment subsumes sundry creditors. In such situation computing interest on outstanding receivables as loans and advances to associated enterprise would amount to double taxation

Accenture Solutions Pvt Ltd. (Asol) As A Successor to Accenture Serivces Pvt Ltd (Aspl), Mumbai vs. Dy CIT Circle- 14 (1)(1), Mumbai

ITA 8008/MUM/2019[2015-16]Status: DisposedITAT Mumbai07 Jul 2022AY 2015-16

Bench: Shri Baskaran Br & Shri Kuldip Singhassessment Year: 2015-16 M/S. Accenture Solutions The Dy. Commissioner O Pvt. Ltd. (‘Asol’), Income Tax, (As A Successor To Circle 14(1)(1), Accenture Services Pvt. 475, Aayakar Bhavan, Ltd. (‘Aspl’) Which Has M.K. Road, Merged Into Asol With An Mumbai - 400020 Effective Date Of 1 Vs. December 2016) Plant 3, Godrej & Boyce Complex, Phirojshah Nagar, Vikhroli West, Off L.B.S Marg, Mumbai – 400 079 Pan: Aacca8997K (Appellant) (Respondent)

For Appellant: Shri Percy J. Pardiwalla, A.RFor Respondent: Dr. Yogesh Kamat, D.R

Section 143Section 143(3)Section 144C(13)Section 92CSection 92C(3)

financial statements. Adjustment required to be made to arm's length margin 13. Erred in not allowing the Appellant the benefit of working capital adjustment which is required to be undertaken to account for the difference in working capital levels between the comparable companies and the Appellant. 14. Erred

Ntt Data Information Processing Services Private Limited, Bangalore vs. The 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 297/BANG/2021[2016-17]Status: DisposedITAT Bangalore07 Jul 2022AY 2016-17

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Chavali Narayan, A.RFor Respondent: Shri Manjunath Karkihalli, D.R

Section 143(3)

compute interest on a Invoice-by-invoice basis has been followed and accordingly the issue is remitted to AO/TPO for fresh consideration. Working capital adjustment appropriately takes into account the delayed/ outstanding receivable; separate TP adjustment is unwarranted 22. The assessee requests that where working capital adjustment is granted, receivables ... amount gets adjusted in working capital adjustments and another separate addition is not required under the TP provisions. In view of above, the assessee prays that the adjustment on account of the interest on receivables should be deleted by providing working capital adjustment. Judicial precedents- Xchanging Solutions

Sandisk India Device Design Centre Private Limited, Bengaluru vs. Joint Commissioner of Income Tax, Special Range-6, Bangalore

In the result, the appeal filed by the assessee stands partly allowed as indicated hereinabove

ITA 288/BANG/2021[2016-17]Status: DisposedITAT Bangalore30 Jun 2022AY 2016-17

Bench: Smt. Beena Pillai & Shri. Laxmi Prasad Sahuit(Tp)A No. 288/Bang/2021 Assessment Year : 2016-17 M/S. Sandisk India Device Design Centre Pvt. Ltd., Survey No. 143/1, Amani Bellandur Khane Village, The Joint Prestige Excelsior, Commissioner Of Prestige Tech Park, Income-Tax Marathalli – Sarjapur Outer (Osd), Ring Road, Circle 6 (1)(1), Vs. Kadubeesanahalli, Bangalore. Varthur Hobli, Bangalore – 560 103. Pan: Aaics9204M Appellant Respondent Assessee By : Shri Ajay Roti, Ca : Dr. Manjunath Karkihalli, Revenue By Cit Dr Date Of Hearing : 25-05-2022 Date Of Pronouncement : 30-06-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Final Assessment Order Passed By National E-Assessment Centre, New Delhi On 30.04.2021 For A.Y. 2016-17 On Following Grounds Of Appeal: “The Grounds Stated Hereunder Are Independent Of & Without Prejudice To One Another. The Appellant Submits As Under:

For Appellant: Shri Ajay Roti, CA

Section 92C(3)Section 92D

functional comparability with the Appellant, without providing an opportunity of rebutting such data based on cross examining the companies providing such data. 8. Working Capital adjustment 8.1. The Hon'ble Panel erred in upholding the action of the Learned TPO/ NeAC in not allowing appropriate working capital adjustment considering ... proposed an adjustment of Rs.35,49,09,827/- under the software development segment. While computing the margin, the Ld.TPO did not grant the Working Capital Adjustment also rejected risk adjustment by following various decisions of Coordinate Bench of this Tribunal. 2.12 ECB Loan: Further, the Ld.TPO observed that assessee

M/S Harman International (India) Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-3(1)(2), Bangalore

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

ITA 49/BANG/2019[2014-15]Status: DisposedITAT Bangalore30 Jun 2022AY 2014-15

Bench: Shri N. V. Vasudevan & Ms. Padmavathy Sit(Tp)A No.49/Bang/2019 Assessment Year : 2014-15 M/S. Harman Connected Services Vs. Deputy Commissioner Of Corporation India Private Limited, Income Tax, 4A, Jupiter, Prestige Technology Park, Circle - 3(1)(2), Sarjapur, Marathahalli Road, Bengaluru. Kadubeesanahalli Village, Bengaluru – 560 103. Pan: Aacch 1585 J Appellant Respondent Assessee By : Shri. T. Suryanarayana, Senior Advocate Revenue By : Dr. Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 27.06.2022 Date Of Pronouncement : 30.06.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. T. Suryanarayana, Senior AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 92Section 92C

this company to the TPO/AO for consideration afresh. 25. Ground No. 1(e) projects the grievance of the assessee regarding non- granting of working capital adjustment. The assessee submits that that Rule 10B(3) of the Income-tax Rules, 1962, itself categorically provides that an IT(TP)A No. 49/Bang/2019 ... adjustment ought to be provided for any differences in the economic factors between the tested party and the comparables. A working capital adjustment is one such adjustment which is to be applied in order to adjust for the differences between the working capital positions of the tested party

Deputy Commissioner of Income Tax Circle-1(1)(1), Bangalore vs. M/S Altisource Business Solutions India Pvt Ltd, Bangalore

In the result, the appeal filed by assessee stands allowed as indicated hereinabove and appeal filed by revenue stands dismissed

ITA 164/BANG/2018[2012-13]Status: DisposedITAT Bangalore29 Jun 2022AY 2012-13

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 162/Bang/2018 Assessment Year : 2012-13 M/S. Altisource Business Solutions Pvt. Ltd., Pritech Park, 3Rd & 5Th Floors Of Wing A & The Deputy 4Th Floor Of Wing B, Commissioner Of Block No. 12, Pritech Park, Income Tax, Survey No. 51-64/4, Circle – 1 (1)(2), Bellandur Village, Bangalore. Vs. Sarjapur Marathahalli Outer Ring Road, Bangalore – 560 103. Pan: Aaaco9467A Appellant Respondent & It(Tp)A No. 164/Bang/2018 Assessment Year : 2012-13 (By Revenue) : Shri K.R. Vasudevan, Assessee By Advocate : Smt. Susan Dolores George Revenue By Cit (Osd) Date Of Hearing : 30-05-2022 Date Of Pronouncement : 29-06-2022 Order Per Beena Pillaipresent Cross Appeals Filed By The Assessee & The Revenue Against Order Dated 31.08.2017 Passed By The Ld.Cit(A)-1, Bangalore For A.Y. 2012-13 On Following Grounds Of Appeal:

Section 92C(3)(a)

purpose of computation of margin of the comparable companies; 7. The learned CIT (A) has erred in law and facts, in computation of working capital adjustment; 8. Software Development Services: 8.1 The learned AO/ learned TPO/ Hon'ble CIT(A) erred in accepting companies that ought to have been rejected ... Transfer pricing grounds Ground No. 7.1: The learned AO/ learned TPO/ Hon'ble CIT(A) erred in not appreciating the fact that negative working capital adjustment should not be allowed. Page 8 of 26 IT(TP)A Nos. 162 & 164/Bang/2018 Ground No. 8.3: The Hon'ble CIT(A) has given

M/S Tokai Rika Minda India Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Cicle-7(1)(1), Bangalore

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

ITA 1513/BANG/2017[2013-14]Status: DisposedITAT Bangalore29 Jun 2022AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri K.R. Vasudevan, A.RFor Respondent: Dr. Manjunath Karkihalli, D.R

Section 143(3)Section 92CSection 92C(2)

Rika Minda India Pvt. Ltd., Nelamangala Taluk Page 3 of 26 11. The learned AO/learned TPO /Hon'ble DRP erred in not allowing working capital adjustment. 12. The learned AO/learned TPO/Hon'ble DRP erred in not allowing appropriate adjustment to account for the difference in the risks borne ... above order of the Tribunal, we remit the issue to the file of AO/TPO on similar direction. 9. Ground No.11 is with regard working capital adjustment. 9.1 After hearing both the parties, we of the opinion that similar issue came for consideration before this Tribunal in assessee’s own case

Binod Kumar Singh, Mumbai vs. DCIT CC 18 & 19, Mumbai

In the result, appeal of the assessee is allowed and the appeal of the Revenue is dismissed

ITA 1479/MUM/2014[2008-09]Status: DisposedITAT Mumbai27 Jun 2022AY 2008-09

Bench: Shri Vikas Awasthy & Shri M.Balaganeshआअसं.7721/मुं/2012(िन.व. 2008-09) आअसं.1429/मुं/2014(िन.व. 2009-10) Sony Pictures Networks India Pvt. Ltd., (Formerly Known As Multi Screen Media Pvt. Ltd.), Interface Building 7, 4Th Floor, Malad Link Road, Malad (West), Mumbai-400064 Pan: Aabcs1728D ...... अपीलाथ"/Appellant बनाम Vs. The Acit, Central Circle-20, Room No. 402, Aayakarbhavan, M.K. Road, Mumbai-400020. ..... "ितवादी/Respondent आअसं.1178/मुं/2014(िन.व. 2009-10) The Acit, Central Circle-20, Room No. 402, ...... अपीलाथ"/Appellant Aayakarbhavan, M.K. Road, Mumbai-400020 बनाम Vs. Sony Pictures Networks India Pvt. Ltd., (Formerly Known As Multi Screen Media Pvt. Ltd.), Interface Building 7, 4Th Floor, Malad Link Road, Malad (West), Mumbai-400064 ..... "ितवादी/Respondent Pan: Aabcs1728D

For Appellant: Sh. Percy Pardiwala,Sr.Advocate with Sh. HitenChandeFor Respondent: S/Sh. Vijay Kumar-CIT-DR and Tejinder Pal Singh

Section 143(3)Section 144CSection 37(1)

fact that the extension of credit facility is closely and inextricably linked to the sale of content transaction, which is demonstrated by a working capital adjustment and thus the same should not be treated as a separate international transaction under Section 92B(1) of the Act. 7. On the facts ... been considered in the sale price. 11.4 The ld. Counsel contended that if the net margin earned by the assessee is adjusted for working capital adjustment then also the net margin earned by the assessee is higher than the net margin earned by the comparables. The working capital adjustment factors

Multi Screen Media P.Ltd, Mumbai vs. Asst CIT Cen Cir 20, Mumbai

In the result, appeal of the assessee is allowed and the appeal of the Revenue is dismissed

ITA 1429/MUM/2014[2009-10]Status: DisposedITAT Mumbai27 Jun 2022AY 2009-10

For Appellant: Sh. Percy Pardiwala,Sr.Advocate with Sh. HitenChandeFor Respondent: S/Sh. Vijay Kumar-CIT-DR and Tejinder Pal Singh

Section 143(3)Section 144CSection 37(1)