“working capital adjustment”

M/S. Walvoil Fluid Power (India) Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 7(1)(2), Bengaluru

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

Bench: Smt. Beena Pillai & Ms. Padmavathy S

this issue in favour of the assessee. 21. The next issue in ground No.6 raised by the assessee is relating to exclusion of working capital adjustment while computing the ALP. We notice that the this Tribunal in assessee’s own case (supra), has decided this issue in favour ... assessee with the following observations:- “26. In the case of Nagravision India (P.) Ltd., (supra), the Tribunal held that the working capital adjustment should be allowed. For holding so, the Tribunal has followed the decision rendered by another Bench in the case of Huawei Technologies (India

M/S. Outsourcepartners International Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 5(1)(2), Bangalore

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

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

against receivables for the purpose of interest. The ld. AR also submitted that no separate adjustment for interest on receivables is warranted, if working capital adjustment is done. He further submitted that the assessee is a debt free company and hence there is no requirement for interest on receivables ... 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

M/S Altisource Business Solutions Private Limited, Bangalore vs. Income Tax Officer Ward-1(1)(1), Bangalore

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

Bench: Shri N. V. Vasudevan & Ms. Padmavathy Sit(Tp)A No.3368/Bang/2018 Assessment Year : 2014-15 M/S. Altisource Business Solutions Pvt. Ltd., Vs. Ito, Pritech Park, Block Nok.12, 3Rd Floor, 5Th Ward – 1(1)(1), Floor, B-Wing & 4Th Floor, B-Wing, Bengaluru. Bellandur Village, Bengaluru-560 103. Pan : Aaaco 9467 A Appellant Respondent Assessee By : Smt. Rashmi R, Advocate Revenue By : Shri. V. S. Chakrapani, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 21.06.2022 Date Of Pronouncement : 24.06.2022 O R D E R Per N V Vasudevan

distinguished its earlier order in the case of Kusum Healthcare Pvt. Ltd. (supra) and rejected the contention that interest gets subsumed in the working capital adjustment. The Hon`ble Bombay High court in the case of CIT vs. Patni Computer Systems Ltd, (2013) 215 Taxman 108 (Bom) dealt, inter alia

Vmware Software India Private Limited, Bangalore vs. The Deputy Commissioner of Income Tax Circle-7(1)(2), Bangalore

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

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.2127/Bang/2017 : Asst.Year 2012-2013 M/S.Vmware Software India The Deputy Commissioner Of Private Limited, Kalyani Magnum Income-Tax, Circle 7(1)(2) V. Bangalore. Block-I, 3Rd Floor 165/2 Doraisanipalya, Iim Post Bannerghatta Road Bengaluru – 560 076. Pan : Aaccv4573E. (Appellant) (Respondent) Appellant By : Sri.T.Suryanaranayana, Advocate Respondent By : Dr.Manjunath Karkihalli, Cit -Dr Date Of Pronouncement : 17.06.2022 Date Of Hearing : 03.06.2022 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 24.01.2017 Passed U/S 143(3) R.W.S. 144C(13) Of The I.T.Act. The Relevant Assessment Year Is 2012-2013. 2. The Issues Raised In The Appeal Are As Follows:- (I) Validity Of The Impugned Final Assessment Order; (Ii) Transfer Pricing (Tp) Adjustment Of Rs.26,85,43,457 Made By The Transfer Pricing Officer (Tpo) Towards The International Transactions Of Provision Of Contrct Software Development & Information Technology Enabled Services To The Assessee’S Associated Enterprises (Aes); (Iii) Addition Of Rs.7,62,39,388 Being The Alleged Suppressed Income Of The Assessee; & 2 It(Tp)A No.2127/Bang/2017. M/S.Vmware Software India Private Limited.

issued by the learned DRP with respect to the Transfer Pricing matter while passing the final Assessment order such as erroneous computation of working capital adjustment and treatment of foreign exchange gain / loss as operating in nature for the Appellant and the comparable companies; 18. On the facts and circumstances ... inaccuracies by taking the correct figures for trade payables and receivables for the assessee as well as all the comparables while computing the working capital adjustment in respect of both service segments (refer pages 21-22 of the DRP’s directions). However, despite the above, in the final assessment order

M/S. Citrix R & D India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 2(1)(1), Bangalore

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

Bench: Shri Chandra Poojari & Shri George George K.

with the learned AO in pursuance of the directions of the learned Panel erred in law and on facts in not providing the Working Capital Adjustment to the Appellant. 5. The learned TPO along with the learned AO in pursuance of the directions of the learned Panel erred ... Ground Nos.1 to 3 are general in nature, which do not require any adjudication. 6. Ground No.4 is with regard to the working capital adjustment. The contention of Ld. A.R. is that TPO/DRP erred in not providing appropriate adjustments towards the difference in the working capital between the assessee

Ametek Instruments India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-1(1)(1), Bengaluru

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

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.432/Bang/2021 : Asst.Year 2016-2017 M/S. Ametek Instruments India The Assistant Commissioner Private Limited Of Income-Tax, Circle 1(1)(1) V. Benguluru. Plot No.1, Epip Industrial Area, Divyashree Nr Enclave, 4Th Floor Block A, Whitefield Bengaluru – 560 066. Pan : Aahca2869B. (Appellant) (Respondent)

assessee limited the submission to the following grounds:- (i) Upper Turnover filter (Ground 14) (ii) Exclusion of companies (SWD Segment) Ground 21 (iii) Working capital adjustment (Ground 19) (iv) Interest on outstanding receivable (Ground 24-31) We shall adjudicate the above grounds as under:- Ground 14 (Upper Turnover Filter ... case of BORQS Software Solutions Pvt. Ltd. v. ITO (supra) and recompute the margins accordingly. It is ordered accordingly. Ground 19 (Working Capital Adjustment) 8. The above ground is dealing with working capital adjustment. The assessee has submitted that the TPO did not allow any adjustment on working capital. Further

M/S Applied Materials India Private Limited, Bangalore vs. Income Tax Officer Ward-1(1)(1), Bangalore

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

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

delayed receivables, if at all, would have to be aggregated with the principal transaction of rendering SWD services. On aggregation, if a working capital adjustment is determined, it would take into account the impact of the delayed receivables on the margin of company, and therefore a separate adjustment on that ... 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

M/S. L G Soft India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 4(1)(1), Bengaluru

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

Bench: Shri Chandra Poojari & Smt. Beena Pillai

hearing the parties, we direct the AO/TPO to grant appropriate adjustments towards working capital as directed by Ld. DRP. In other words, actual working capital adjustment to be given. Directed accordingly. 16. With regard to ground No.16, no argument was put forth on this ground. Accordingly, this ground

M/S. Maxim Integrated Products India Sales Private Limited, Bengaluru vs. Deputy Commissioner of Income-Tax, Circle-4(1)(1), Bengaluru

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

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

treat it as a separate international transaction and benchmark it separately. 10. He further submitted that interest on receivables is subsumed in the working capital adjustment and hence there is no requirement for a separate adjustment. Alternatively, the ld. AR prayed for consideration of interest at LIBOR + 2% by placing ... 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

M/S. Te Connectivity Services India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

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

Bench: Shri Chandra Poojari & Smt. Beena Pillaiit(Tp)A No.300/Bang/2021 Assessment Year : 2016-17

Appellant would be at arm's length, without any further adjustments in relation to the inclusion/exclusion of comparable companies and grant of working capital adjustment. 20. The ld. DR submitted that amortization of goodwill is an operative expenditure and it could not be removed while calculating PLI of the company ... pass the final assessment order in conformity with the directions of the DRP. Ordered accordingly. 44. Ground No.2.10 is with regard to working capital adjustment for determining the ALP. 45. The ld. AR submitted that the Appellant reserved the option to make an adjustment for the difference in the levels

M/S. Ge Be Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 3(1)(2), Bangalore

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

Bench: Shri Chandra Poojari & Shri George K. George

circumstances of the case, the learned DRP erred in upholding the action of the learned AO/ learned TPO in not allowing the working capital adjustment for determining the arm's length price. 5. That on the facts and circumstances of the case, the learned DRP erred in upholding the action ... Ground Nos.1 to 3 are general in nature which do not require any adjudication. 3. Ground No.4 is with regard to allowing working capital adjustment while determining the ALP. After hearing both the IT(TP)A No.2615/Bang/2019 M/s. GE BE Pvt. Ltd., Bangalore Page 5 of 24 parties

Deputy Commissioner of Income Tax, Circle- 6(1)(2), Bengaluru vs. M/S. Symbol Technologies India Private Limited, Bengaluru

In the result, appeal by the assessee and that by the Revenue are treated as partly allowed

Bench: Shri N. V. Vasudevan & Shri Laxmi Prasad Sahu

facts and circumstances of the case, the learned CIT(A) erred in upholding the learned TPO's approach of not providing appropriate working capital adjustment towards difference in level of working capital of the Appellant vis-a-vis the comparable companies; 9. On the facts and circumstances of the case ... taxpayer to its AE(s) is computed as under: SOFTWARE DEVELOPMENT SERVICES Arm's Length Mean Margin on cost 24.82% Less: Working Capital Adjustment (As per Annex. C) 1.63% Adjusted margin 23.19% Operating Cost 5969,34,645 Arms Length Price(ALP) 123.19% of Operating Cost) 7353,63,789 ITA Nos.2057

M/S. Symbol Technologies India Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 6(1)(2), Bengaluru

In the result, appeal by the assessee and that by the Revenue are treated as partly allowed

Bench: Shri N. V. Vasudevan & Shri Laxmi Prasad Sahu

facts and circumstances of the case, the learned CIT(A) erred in upholding the learned TPO's approach of not providing appropriate working capital adjustment towards difference in level of working capital of the Appellant vis-a-vis the comparable companies; 9. On the facts and circumstances of the case ... taxpayer to its AE(s) is computed as under: SOFTWARE DEVELOPMENT SERVICES Arm's Length Mean Margin on cost 24.82% Less: Working Capital Adjustment (As per Annex. C) 1.63% Adjusted margin 23.19% Operating Cost 5969,34,645 Arms Length Price(ALP) 123.19% of Operating Cost) 7353,63,789 ITA Nos.2057

M/S Unisys India Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore

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

Bench: Shri N.V Vasudevan & Ms. Padmavathy Sassessment Year : 2010-11

Techno Analytics Ltd. in SWD segment against which the revenue is in appeal before the Tribunal. The revenue raised further grounds relating to working capital adjustment (Ground No. 7 to 10) allowed by the CIT(A) and the computation of 10A (Ground No. 11 & 12). 6. The revenue filed revised ... comparables as ITA Nos.2024 & 2027 /Bang/2017 Page 6 of 32 given in the below table and worked out the revised TP margin post working capital adjustment at 21.19%. Comparables selected by Ld. TPO Particulars Pre WC Post WC ICR.A. Techno Analytics Ltd. (seg) 24.62% 24.94% Infosys Ltd. 44.98% 44.43% Kals

Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore vs. M/S Unisys India Pvt Ltd, Bangalore

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

Bench: Shri N.V Vasudevan & Ms. Padmavathy Sassessment Year : 2010-11

Techno Analytics Ltd. in SWD segment against which the revenue is in appeal before the Tribunal. The revenue raised further grounds relating to working capital adjustment (Ground No. 7 to 10) allowed by the CIT(A) and the computation of 10A (Ground No. 11 & 12). 6. The revenue filed revised ... comparables as ITA Nos.2024 & 2027 /Bang/2017 Page 6 of 32 given in the below table and worked out the revised TP margin post working capital adjustment at 21.19%. Comparables selected by Ld. TPO Particulars Pre WC Post WC ICR.A. Techno Analytics Ltd. (seg) 24.62% 24.94% Infosys Ltd. 44.98% 44.43% Kals

M/S. Ocwen Financial Solutions Private Limited, Bengaluru vs. Joint Commissioner of Income Tax, Special Range - 5, Bangalore

In the result appeal filed by the assessee stands partly allowed

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 2411/Bang/2019 Assessment Year : 2015-16 M/S. Ocwen Financial Solutions Pvt. Ltd., Pritech Park, Block 12, The Joint Commissioner Unit 2, 5B & 6A Floors, Of Income-Tax, Bellandur Village, Special Range-5, Sarjapur Marathahalli Bangalore. Ring Road, Vs. Bangalore – 560 103. Pan: Aaaco3764E Appellant Respondent : Shri K.R. Vasudevan & Assessee By Ms. Rashmi, Advocates : Dr. Manjunath Karkihalli, Revenue By Cit-Dr Date Of Hearing : 02-03-2022 Date Of Pronouncement : 13-05-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Final Assessment Order Dated 24/09/2019 Passed By The Ld.Jcit, Special Range-5, Bangalore Under Section 143 (3) R.W.S 144C (13) Of The Act, For Assessment Year 2015-16 On Following Grounds Of Appeal: “I. Transfer Pricing The Grounds Mentioned Hereinafter Are Without Prejudice To One Another.

margin computed in respect of Cosmic Global Ltd by the Ld.TPO. 9. And in Ground No.16, the assessee is seeking appropriate working capital adjustment, to iron out the differences, existing between the assessee and the comparable companies. 10. Before we undertake the compatibility analysis, it is sine ... assessee stands allowed for statistical purposes. Page 17 of 24 IT(TP)A No. 2411/Bang/2019 16. Ground No.16 16.1 The assessee is seeking working capital adjustment to iron out the differences, existing between the assessee in the comparables. 16.2 Before us, the Ld.AR placed reliance on the decision

Xchanging Solutions Limited, Bangalore vs. The Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, grounds 20 to 23 are allowed for statistical purposes

March 2016. 18.Without prejudice to our grounds above, the learned DRP/AO/TPO have erred, in law and in facts, by not considering that working capital adjustment will appropriately take into account the delayed /outstanding receivable and separate TP adjustment thus will be unwarranted. 19.Without prejudice to our grounds above, the learned ... accept the assessee’s contention that trade receivables are not separate international transaction and impact if any, gets subsumed by way of working capital adjustment. The TPO has proceeded to re-characterize the trade receivable from AEs as loan to AEs and imputed interest on trade receivables (invoice-wise) during