“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

Red Hat India P.Ltd, Mumbai vs. DCIT 15(3)(1), Mumbai

In the result, both the appeals of the assessee are allowed for statistical purposes

ITA 1456/MUM/2017[2012-13]Status: DisposedITAT Mumbai29 Apr 2022AY 2012-13

Section 143(3)Section 144C(5)

accordingly, ground No.19 is hereby dismissed as not pressed. 4. The ground No.18 raised by the assessee for A.Y.2012-13 is seeking working capital adjustment to be considered for the difference in working capital levels between the comparable companies and the assessee. With regard to international transaction of provision of marketing ... services to Red Hat US, the assessee is seeking for working capital adjustment. We find that the Co-ordinate Bench of this Tribunal in assessee’s own case for A.Y.2016-17 in ITA No.1379/Mum/2021 dated 25/02/2022 had indeed M/s. Red Hat India Pvt. Ltd., accepted to the plea that working capital

Black Knight India Solutions Private Limited, Hyderabad vs. Assistant Commissioner of Income Tax, Circle-1(1)(2), Bangalore

In the result, the appeal filed by assessee stands allowed on ground no

ITA 230/BANG/2021[2016-17]Status: DisposedITAT Bangalore29 Apr 2022AY 2016-17

Bench: Shri. B.R. Baskaran & Smt. Beena Pillaiit(Tp)A No. 230/Bang/2021 Assessment Year : 2016-17 M/S. Black Knight India Solutions Pvt. Ltd., The Assistant 6-3-1192-2-1, Htc Commissioner Of Towers, Kundanbagh, Income Tax, Begumpet, Circle – 1(1)(2), Hyderabad, Vs. Bangalore. Telangana – 500 016. Pan: Aaccl2956K Appellant Respondent : Shri S.P. Chidambaram, Assessee By Advocate : Shri Sumer Singh Meena, Cit Revenue By Dr Date Of Hearing : 26-04-2022 Date Of Pronouncement : 29-04-2022 Order Per Beena Pillaipresent Appeal Arises Out Of The Final Assessment Order Dated 30.03.2021 Passed By The Ld.Ao In National E-Assessment For Assessment Year 2016-17 On Following Grounds Of Appeal: “1. That On The Facts & Circumstances Of The Case, The Final Assessment Order Dated 30 March 2021 (And Received By The Appellant On 30 March 2021) Passed By The Additional / Joint / Deputy / Assistant Commissioner Of Income Tax/ Income-Tax Officer, National E-Assessment

For Respondent: Shri S.P. Chidambaram

Section 144Section 144C(5)Section 92C

comparable companies selected by the TPO and not allowing risk adjustment as per the provisions of Rule 10B(1)(e) of the Rules. Working capital adjustment 16. That on the facts and circumstances of the case and in law, the TPO/AO/DRP erred in not granting working capital adjustment

Alcon Laboratories India Pvt Ltd, Bangalore vs. Income Tax Officer Ward-1(1)(4), Bangalore

In the result the appeal filed by the assessee stands allowed as indicated herein above

ITA 726/BANG/2017[2012-13]Status: DisposedITAT Bangalore29 Apr 2022AY 2012-13

Bench: Shri. B.R. Baskaran & Smt. Beena Pillaiit(Tp)A No. 726/Bang/2017 Assessment Year : 2012-13 M/S. Alcon Laboratories (India) The Deputy Pvt. Ltd., Commissioner Of 11Th Floor, Rmz Azure, Income Tax, Bellary Road, Hebbal, Circle – 1(1)(1), Bangalore – 560 092. Vs. Bangalore. Pan: Aacca3430F Appellant Respondent : Shri Percy Pardiwala, Sr. Assessee By Advocate : Dr. Manjunath Karkihalli, Cit Revenue By (Dr) Date Of Hearing : 12-04-2022 Date Of Pronouncement : 29-04-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Final Assessment Order Dated 23/01/2017 Passed By The Ld.Ito, Ward-1(1)(4), Bangalore For Assessment Year 2012-13 On Following Revised Grounds Of Appeal: “Based On The Facts & Circumstances Of The Case & In Law, Alcon Laboratories (India) Private Limited (Hereinafter Referred To As "Appellant”), Respectfully Craves Leave To Prefer An Appeal Against The Order Passed By The Learned Assessing Officer [Hereinafter Referred To As The "Learned Ao”] In Pursuance To The Directions Issued By Hon'Ble

For Respondent: Shri Percy Pardiwala, Sr

Section 143(3)Section 144C

data: 19. The learned AOTTPO and the learned DRP have erred. in law and in facts, by incorrectly computing the working capital adjustment benefit: 20. The learned AO/TPO and the learned DRP have erred in incorrectly computing the operating margin of some of the comparable companies; 21. The learned

Novell Software Development (India) Private Limited, Bangalore vs. ITO, Bangalore

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

ITA 319/BANG/2016[2011-12]Status: DisposedITAT Bangalore29 Apr 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 280/Bang/2016 Assessment Year : 2011-12 M/S. Micro Focus Software India Pvt. Ltd. (Earlier Known As Novell Software Development The Income Tax (India) Pvt. Ltd.), Officer, Bagmane Tech Park ‘D’ Ward – 4 (1)(3), Block, Bangalore. ‘Laurel’ 65/2, Vs. C V Raman Nagar, Byrasandra, Bangalore – 560 093. Pan: Aaacn6992K Appellant Respondent & It(Tp)A No. 319/Bang/2016 Assessment Year : 2011-12 (By Assessee) : Smt. Tanmayee Rajkumar, Assessee By Advocate : Dr. Manjunath Karkihalli, Cit Revenue By (Dr) Date Of Hearing : 03-03-2022 Date Of Pronouncement : 29-04-2022 Order Per Beena Pillaipresent Cross Appeals Has Been Filed By Revenue As Well As Assessee Against Order Dated 29.12.2015 Passed By Ld.Ito Ward 5(1)(1)

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

Appellant and the comparable companies. b) That the AO/TPO grossly erred in law and on facts in arbitrarily applying upper caps to the working capital adjustments allowable to the Appellant while determining the arm's length prices of its international transactions without there being any legal basis or rationale ... limiting the working capital adjustments to the said percentages, and thus erred in not granting the entire adjustments allowable under Rule 10B of the Rules to account for the differences in the working capital positions of the Appellant and of the comparable companies. c) That, despite the binding directions

ITO Ward - 5(1)(1), Bangalore vs. M/S Novell Software Development (India) Pvt. Ltd., Bangalore

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

ITA 280/BANG/2016[2011-12]Status: DisposedITAT Bangalore29 Apr 2022AY 2011-12

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

Godrej Consumer Products Ltd, Mumbai vs. DCIT Cir 14(1)(1), Mumbai

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

ITA 1579/MUM/2017[2012-13]Status: DisposedITAT Mumbai28 Apr 2022AY 2012-13

Bench: Shri Pramod Kumar & Shri Pavan Kumar Gadalegodrej Consumer Vs. Dcit, Cc-14(1)(1) Products Ltd., Aayakar Bhavan, Kalyaniwalla & Mistry 4Th Floor, Mk Road, Llp, Esplanade House, Mumbai-400020. 2Nd Floor, 29, Hazarimal Somani Marg, Fort, Mumbai – 400 001. "थायी लेखा सं./जीआइआर सं./Pan/Gir No.: Aabcg3365J Appellant .. Respondent Appellant By : Mr.Farrokh.V. Irani.Ar Respondent By : Dr.Yogesh Kamat. Cit Dr & Mr.Satya Pinisetty.Dr Date Of Hearing 27.01.2022 Date Of Pronouncement 05.04.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Order U/S 143(3) R.W.S 144(C)(13) Of The Income Tax Act, 1961 Passed In Pursuance To Directions Of The Drp.The Assessee Has Raised The Following Grounds Of Appeal.

For Appellant: Mr.Farrokh.V. Irani.ARFor Respondent: Dr.Yogesh Kamat. CIT DR

Section 1Section 115Section 143(3)Section 14ASection 36(1)(iii)Section 801CSection 80ISection 921

actual borrowed amount and re- compute the Aim's Length Price accordingly. 3. Further, TPO has granted working capital adjustment in respect of the interest on delayed debtors and determined the ALP of international transactions of Rs.32,62,50,223/- dealt at page 24 Para 8.0 as under: M/s Godrej

Tarkett Flooring India Private Limited, Bengaluru vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal is partly allowed

ITA 201/BANG/2021[2016-17]Status: DisposedITAT Bangalore21 Apr 2022AY 2016-17

Bench: Shri N. V. Vasudevan & Ms. Padmavathy Sit(Tp)A No.201/Bang/2021 Assessment Year : 2016-17 M/S. Tarkett Flooring India Pvt. Ltd., Acit, Vs. No.460, 2Nd Cross, Circle – 7(1)(1), Krishna Temple Road, Bengaluru. Binnamangala 1St Stage, Bengaluru-560 038. Pan : Aadct 9947 R Appellant Respondent

For Appellant: Shri. Sumeet Khuranna, CAFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 92Section 92C

assessee claimed that the international transaction has been carried at ALP. In determining the ALP, the assessee also claimed working capital adjustment which was not granted by the TPO. 3. The TPO to whom the AO referred the question of determination of ALP under section 92CA of the Act, rejected ... Event Management Private Limited  MCI Management India Private Limited   Competent Automobiles Co. Limited - Services & Spares segment MIG Media Neurons Limited  4.4 Not providing working capital adjustment for determining the arm's length price while relying on the judicial precedents based on a fact pattern, which is not applicable

Netapp India Marketing and Services Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-5(1)(1), Bangalore

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

ITA 181/BANG/2021[2016-17]Status: DisposedITAT Bangalore13 Apr 2022AY 2016-17

Bench: Shri B. R. Baskaran & Smt. Beena Pillai

For Appellant: Sri G.C. Srivastava, A.RFor Respondent: Sri Manjunath Karkihalli, D.R

Section 143(3)

sales support services. IT(TP)A No.181/Bang/2021 NetApp India Marketing and Services Pvt. Ltd., Bangalore Page 2 of 6 b) Non-granting of working capital adjustment. c) TP adjustment made in respect of outstanding receivables by charging notional interest thereon. 2. The assessee herein is a subsidiary of NetApp ... restored to the file of the TPO for examining the contentions of the assessee. He further submitted that the TPO has not granted working capital adjustment which may kindly be directed to be granted. 6. We heard Ld. D.R. on this issue and perused the record. We notice that

M/S. Biocon Research Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle- 1(1)(2), Bangalore

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

ITA 2612/BANG/2019[2015-16]Status: DisposedITAT Bangalore11 Apr 2022AY 2015-16

Bench: Shri B. R. Baskaran & Smt. Beena Pillai

For Appellant: Shri Padamchand Khincha, A.RFor Respondent: Sri Manjunath Karkihalli, DR

Section 10ASection 143(3)

adjustment by imputing notional interest on the said receivables. The Ld. A.R. submitted that the TNMM method adopted by the assessee combined with working capital adjustment would take care of loss, if any arising from extended credit given to the A.E. Accordingly, he contended that the credit given ... assessee and hence he did not carry out comparison of PLI (Profit level indicator) with any comparable company. He submitted that the working capital adjustment is made to the margins of comparable companies only. However, in the instant case, the assessee has given extended credit to its AE and hence

Xerox Business Services India Private Limited, Bangalore vs. Asst.C.I.T., Bangalore

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

ITA 361/BANG/2016[2011-12]Status: DisposedITAT Bangalore08 Apr 2022AY 2011-12

Bench: Shri Chandra Poojari, Am & Smt. Beena Pillai, Jm

For Appellant: Shri Nageshwar Rao, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT-DR

Section 143(3)Section 144Section 144C(5)Section 144C(6)Section 92C

Economic Co-operation and Development 4 IT(TP)A No. 361 & 202/Bang/2016 M/s. Conduent Business Services India LLP ("OCED") to carry out working capital adjustment to the operating profit margins of the comparable companies. 21. The learned AO/DRP/TPO has failed to appreciate the appellant's commercial judgment about the application ... following companies: (a) ICRA Online Limited (b) Mindtree Limited 32. The learned AO/TPO/DRP have erred, in law and in facts, by making negative working capital adjustment In relation to the services provided by the Appellant without appreciating the fact that the Appellant Is a captive service provider and does

M/S.Tokai Rika Minda India Pvt. Ltd., Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

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

ITA 2327/BANG/2016[2012-13]Status: DisposedITAT Bangalore08 Apr 2022AY 2012-13

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.2327/Bang/2016 : Asst.Year 2012-2013 M/S.Tokai Rika Minda India The Deputy Commissioner Of Private Limited Income-Tax, Circle 7(1)(1) V. Bangalore. Plot No.365, Sompura 1St Stage Kiadb Industrial Area Dobbaspet, Nelamangala Taluk Bangalore Rural Dist – 562 111. Pan : Aadct0271C. (Appellant) (Respondent) Appellant By : Sri.K.R.Vasudevan, Advocate Respondent By : Sri.Pradeep Kumar, Cit-Dr Date Of Pronouncement : 08.04.2022 Date Of Hearing : 22.03.2022

For Appellant: Sri.K.R.Vasudevan, AdvocateFor Respondent: Sri.Pradeep Kumar, CIT-DR

Section 143(3)

Ground 6) 2 IT(TP)A No.2327/Bang/2016. M/s.Tokai Rika Minda India Private Limited. (v) Adjustment towards capacity utilisation (Grounds 7) (vi) Adjustment towards working capital adjustment (Grounds 8) (vii) Restricting adjustment towards AE transactions (Ground 9) [This addition was unilaterally added by the DRP] 3. Brief facts of the case ... case of Pact Closure Systems India Ltd IT(TP)A No 6801Bang/2017 (Bangalore) (order dated 14.09.2021).  The assessee submitted that the working capital adjustment should be granted and placed reliance on the Bangalore Tribunal decision in the case of Huawei Technologies India Private Limited reported in 101 taxmann.com

Asst.CIT, Bangalore vs. M/S Xerox Business Services of India Pvt. Ltd., Bangalore

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

ITA 202/BANG/2016[2011-12]Status: DisposedITAT Bangalore08 Apr 2022AY 2011-12

Bench: Shri Chandra Poojari, Am & Smt. Beena Pillai, Jm

For Appellant: Shri Nageshwar Rao, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT-DR

Section 143(3)Section 144Section 144C(5)Section 144C(6)Section 92C

Anz Support Services India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-1(1)(1), Bangalore

In the result, the appeal of the assessee is allowed

ITA 185/BANG/2021[2015-16]Status: DisposedITAT Bangalore06 Apr 2022AY 2015-16

Bench: Shri N V Vasudevan & Ms. Padmavathy S

For Appellant: Shri. Chavali Narayanan, C.AFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)

Section 143(3)Section 92Section 92(1)Section 92BSection 92B(1)Section 92C

approach IT(TP)A No.185/Bang/2021 Page 6 of 11 (iii) Outstanding receivables from AEs cannot be characterized as loan advanced to AEs (iv) Working capital adjustment appropriately takes into account the delayed outstanding receivables hence separate adjustment is unwarranted (v) No interest cost to the assessee (vi)The commercial wisdom

M/S. Infineon Technologies India Pvt Ltd, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bengaluru

In the result the appeal filed by assessee stands allowed partly

ITA 2870/BANG/2017[2013-14]Status: DisposedITAT Bangalore31 Mar 2022AY 2013-14

Bench: Shri B. R. Baskaran & Smt. Beena Pillaiit(Tp)A No.2870/Bang/2017 Assessment Year: 2013-14 M/S. Infineon Technologies India Pvt. Ltd. Deputy Commissioner 9Th Floor Prestige Of Income-Tax Thirulakshmi Vs. Circle-3(1)(1) No.11 M.G. Road Bengaluru Bengaluru 560 001 Pan No : Aabcs6967N Appellant Respondent Appellant By : Shri K.R. Vasudevan, A.R. Shri Sumer Singh Meena, Respondent By : D.R. Date Of Hearing : 13.01.2022 Date Of Pronouncement : 31.03.2022 O R D E R Per Beena Pillai: Present Appeal Is Filed By Assessee Against The Order Dated 16/10/2017 Passed By The Ld.Dcit Under Section 143(3) R.W. Section 144C(13) For Assessment Year 2013-14 On Following Grounds Of Appeal: “The Grounds Mentioned Hereinafter Are Without Prejudice To One Another.

For Appellant: Shri K.R. Vasudevan, A.R

Section 133(6)Section 143(3)Section 144C(13)Section 40Section 92C

fact that the Appellant does not have any working capital risk as it does not have any finance cost, therefore, no negative working capital adjustment should be made. 13. The learned AO/learned TPO/Hon'ble DRP erred in not allowing appropriate adjustment towards the risk differential existing between the Appellant ... operating expenses. Accordingly Ground no.11 raised assessee stands allowed. 29. Ground no. 12 This ground is raised by assessee with regard to negative working capital adjustment carried out by the Ld.TPO which was confirmed by the DRP. It is the plea of the assessee that though the TPO has observed

M/S Tyco Fire & Security India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle-7(1)(1), Bangalore

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

ITA 3363/BANG/2018[2014-15]Status: DisposedITAT Bangalore30 Mar 2022AY 2014-15

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 3363/Bang/2018 Assessment Year : 2014-15 M/S. Tyco Fire & The Assistant Security India Pvt. Ltd., Commissioner Of D-601, Rmz Contennial, Income Tax, Kundalahalli Main Road, Circle – 7 (1)(1), Bangalore – 560 048. Vs. Bangalore. Pan: Aabct0087C Appellant Respondent Assessee By : Shri Rajan Vora, Ca : Shri Sumer Singh Meena, Cit Revenue By Dr (Osd) Date Of Hearing : 05-01-2022 Date Of Pronouncement : 30-03-2022 Order Per Beena Pillaipresent Appeal Has Been Filed By Assessee Against The Final Assessment Order Dated 26.10.2018 Passed By The Ld.Acit, Circle – 7(1)(1), Bangalore For Assessment Year 2014-15 On Following Grounds Of Appeal. “Based On The Facts & Circumstances Of The Case & In Law, Tyco Fire & Security India Private Limited (Hereinafter Referred To As "The Appellant"), Respectfully Craves Leave To Prefer An Appeal Against The Appeal Order Passed By The Learned Assessing Officer (Hereinafter Referred To As The "Learned Ao") Dated October 26, 2018 Under Section 143(3) Read With Section 144C Of The Income-Tax Act, 1961 ("The Act") Pursuant To The Directions Dated September 20, 2018 Issued By The Dispute Resolution Panel (Hereinafter Referred To As The "Drp") U/S 144C (5) Of The Act (`The Impugned Order') Inter-Alia On The Following Grounds: That On The Facts & Circumstances Of The Case & In Law:

For Appellant: Shri Rajan Vora, CA

Section 133(6)Section 143(3)Section 144C

considered by the Ld.AO/TPO. Before us, Ld.AR submitted that it is an accepted principle upheld in various decisions of this Tribunal that working capital adjustment should be allowed on actual. It has been submitted that all relevant details for computation of working capital was provided to AO/DRP which ... Reasonably accurate adjustments should be made to eliminate effect of any such differences Paragraphs 13 to 16 of OECD guidelines, emphasizes need for working capital adjustment in terms of receivables and payables as under: "13. In a competitive environment, money has a time value. If a company provided

M/S Continental Automotive Components India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-2(1)(1), Bangalore

In the result, the appeal is partly allowed

ITA 129/BANG/2019[2014-15]Status: DisposedITAT Bangalore29 Mar 2022AY 2014-15

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranassessment Year :2014-15 M/S. Continental Automotive Vs. Dcit, Components India Pvt. Ltd., Circle – 2(1)(1), Plot No.53B, Bommasandra Industrial Bengaluru. Area, Hosur Road, Attibele Hobli, Anekal Taluk, Bengaluru–560 099. Pan : Aakcs 9578 C Appellant Respondent Assessee By : Shri. T. Suryanarayana, Senior Advocate Revenue By : Shri. Mudavathu Harish Chandra Naik, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 21.03.2022 Date Of Pronouncement : 29.03.2022 O R D E R

For Appellant: Shri. T. Suryanarayana, Senior AdvocateFor Respondent: Shri. Mudavathu Harish Chandra Naik, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 92

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B. R. BASKARAN

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

In the result, appeal of the assessee is partly allowed

ITA 2436/BANG/2019[2015-16]Status: DisposedITAT Bangalore28 Mar 2022AY 2015-16

For Appellant: Shri. Sandeep Huilgol, AdvocateFor Respondent: Shri. Mudavathu Harish Chandra Naik, CIT(DR)(ITAT), Bengaluru

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

Larsen & Toubro Infotech Ltd (e) Persistent Systems Ltd. R.S.Software Ltd., (f) (g) Cybage Software Pvt Ltd. (h) Nihilent Ltd. (ii) Non grant of working capital adjustment (Grd.No.20). 8. As far as exclusion of companies chosen by the TPO and confirmed by DRP is concerned, the relevant provisions ... pressed for IT(TP)A No.2436/Bang/2019 M/s. Capco Technologies Pvt. Ltd., Page 14 of 18 adjudication was only with regard to grant of working capital adjustment. On the issue of non granting of working capital adjustment, the DRP gave its decision by observing that (i) The Assessee has not demonstrated

M/S Verifone India Technology Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(2), Bangalore

In the result, appeals filed by assessee stands allowed

ITA 3089/BANG/2018[2012-13]Status: DisposedITAT Bangalore25 Mar 2022AY 2012-13

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2011-12 M/S. Verifone India Technology Pvt. Ltd., A 101, 1St Floor, Cyber The Income Tax Park, Plot No. 76, 77 & 78, Officer, Doddathogur Village, Ward – 7 (1) (3), Begur Hobli, Bangalore. Bangalore South Taluk, Vs. Bangalore – 560 100. Pan: Aaccv1683K Appellant Respondent & Assessment Year : 2012-13 M/S. Verifone India Technology Pvt. Ltd., A 101, 1St Floor, Cyber The Deputy Park, Plot No. 76, 77 & 78, Commissioner Of Doddathogur Village, Income Tax, Begur Hobli, Circle – 7 (1)(2), Bangalore South Taluk, Vs. Bangalore. Bangalore – 560 100. Pan: Aaccv1683K Appellant Respondent Assessee By : Shri K.R. Vasudevan, Advocate : Shri Priyadarshi Mishra, Addl. Revenue By Cit (Dr) Date Of Hearing : 22-02-2022 Date Of Pronouncement : 25-03-2022

For Appellant: Shri K.R. Vasudevan, Advocate

Section 92C

Software India Ltd. 16.37% 12 Sasken Communication Technologies 24.13% Ltd. 13 Tata Elxsi Ltd. 20.91% AVERAGE 24.82% 3. The Ld.TPO restricted the working capital adjustment at 1.63%, however while computing the ALP, Ld.TPO took the Working Capital adjustment as (-) 1.48%. The Ld.TPO proposed an adjustment at Rs.2 ... ICRA Techno Analytics Ltd d) Persistent Systems & Solutions Ltd. The Ld.AR submitted that assessee wish to argue Ground no.9 relating to negative working capital adjustment. No other grounds have pressed for adjudication except the relief with regard to exclusion and inclusion of comparables raised in Ground no.7 and additional ground

M/S Verifone India Technology Pvt Ltd, Bangalore vs. Income Tax Officer Ward-7(1)(3), Bangalore

In the result, appeals filed by assessee stands allowed

ITA 3088/BANG/2018[2011-12]Status: DisposedITAT Bangalore25 Mar 2022AY 2011-12

For Appellant: Shri K.R. Vasudevan, Advocate

Section 92C

M/S Quest Global Engineering Services Pvt Ltd, Bangalore vs. Assistant Commissioner of Income Tax Circle-5(1)(1), Bangalore

In the result, the appeal filed by the assessee is treated as allowed

ITA 978/BANG/2018[2013-14]Status: DisposedITAT Bangalore23 Mar 2022AY 2013-14

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(Tp)A No.978/Bang/2018 Assessment Year : 2013-14

For Appellant: Shri K.R. Pradeep/Smt. Girija G.P., A.RsFor Respondent: Shri Mudavathu Harish Chandra Naik

nature. At the time of hearing, the Ld A.R sought relief on following items:- (a) Exclusion of three comparables (b) Deletion of Negative working capital adjustment, as the assessee is a captive service provider. Accordingly, we confine ourselves with regard to the above said two items ... Services (P) Ltd., Bangalore Page 4 of 7 4. The next issue urged by the assessee in software development segment relates to negative working capital adjustment made by the TPO. The Ld A.R submitted that the co-ordinate bench in the assessee’s own case relating