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“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
85
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
84
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
74
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
67
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
60
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
57
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 Pvt Ltd, Mumbai vs. Aadl/Jt/Dy/ACIT/ITO, Mumbai

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

ITA 801/MUM/2022[2017-18]Status: DisposedITAT Mumbai28 Feb 2025AY 2017-18

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 143(3)Section 144Section 144C

Computing Private Limited 8.40 2 Innovana Thinklabs Limited 13.45 3 Virtual Galaxy Infotech Private 14.17 Limited Mean 12.01 2.11 The Ld.TPO rejected the working capital adjustment to assessee. The Ld.TPO thus proposed an adjustment of Rs.14,35,88,058/- being the shortfall in the revenue. B. Payment of royalty ... India Private Limited Initiatives Pvt. Ltd. 35th Percentile 18.06 Median 21.69 65th Percentile 24.3 2.14 The Ld.TPO rejected the working capital adjustment to assessee. The Ld.TPO thus proposed an adjustment of Rs.1,63,93,614/- being the shortfall in the revenue. C. Provision of Software Development Service 2.15 The Ld.TPO

Tmeic Industrial Systems India Private Limited, Hyderabad vs. DCIT, Circle -2(1), Hyderabad

In the result, both the Writ Petitions are allowed by setting aside the impugned assessment orders dated

ITA 422/HYD/2022[2018-19]Status: DisposedITAT Hyderabad24 Feb 2025AY 2018-19

Bench: Shri Vijay Pal Rao, Vice-A N D Shri Madhusudan Sawdiaआ.अपी.सं /Ita No.422/Hyd/2022 (िनधा"रण वष"/Assessment Year: 2018-19) Tmeic Industrial Systems Vs. Dy. Cit India Private Limited Circle 2 ( 1 ) Hyderabad Hyderabad Pan:Aadct5493J (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Cas, Kranthi Palivela & Mrudulatha Devdas राज" व "ारा/Revenue By:: Shri B Balakrishna, Cit(Dr) सुनवाई की तारीख/Date Of Hearing: 17/12/2024 घोषणा की तारीख/Pronouncement: 24/02/2025 आदेश/Order

For Appellant: CAs, Kranthi Palivela and Mrudulatha DevdasFor Respondent: : Shri B Balakrishna, CIT(DR)
Section 143(3)Section 144(13)Section 144B

interest rate instead of LIBOR plus as prevalent in the international market for foreign exchange loans. 10. Working Capital Adjustment Making appropriate adjustments to account for differences in working capital employed by the appellant vis-å-vis comparable companies in respect of the subject transaction. 11. The Appellant craves leave

Natco Pharma Limited, Hyderabad vs. ACIT., Circle-5(1), Hyderabad

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

ITA 853/HYD/2024[2020-21]Status: DisposedITAT Hyderabad19 Feb 2025AY 2020-21

Bench: Shri K. Narasimha Chary & Shri G. Manjunatha

For Appellant: Shri A V Raghuram, AdvocateFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 143(2)Section 143(3)Section 144C(5)Section 35Section 41Section 80Section 92CSection 92D(3)

treatment of delayed payments as unsecured loans advance to AE. 4. International transactions are held at arm's length price. 5. Benefit of working capital adjustment. 6. Consider the credit period as 180 days. 7. Credit period allowed as per policy of RBI. 8. LIBOR should be considered. 9. Calculation ... whether 'receivables' is a separate International transaction, ii) whether re-characterization of receivables permitted, iii) whether separate adjustment for receivables is required once working capital adjustment has been allowed, iv) whether adjustment on account of receivables is not warranted unless profitability of comparable companies is higher after adjustments

Vvf (India) Limited, Mumbai vs. Income Tax Department National Faceless Assessment Centre, Mumbai

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

ITA 4840/MUM/2024[2020-21]Status: DisposedITAT Mumbai14 Feb 2025AY 2020-21

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 143(3)Section 144C(13)Section 2Section 92B

observing as under: 28. We do not approve the reasoning given by the DRP about the subsuming of such interest in the working capital adjustment. It is axiomatic that the working capital adjustment is in respect of international transaction of rendering services to the AE. Interest for the credit period ... realization of invoice value beyond the stipulated period is a separate international transaction, whose ALP is required to be determined. Granting of working capital adjustment is confined to the international transaction of rendering of services, whose ALP is separately determinable. On the 33 ITA 4840/Mum/2024 A.Y. 2020-21 other hand

Solvay Specialities India Private Limited, Mumbai vs. The Assistant Commissioner of Income Tax, Circle 16(2) / Assessment Unit, NFAC, Mumbai

In the result, the appeal filed by the assessee is dismissed

ITA 6686/MUM/2024[2021-22]Status: DisposedITAT Mumbai07 Feb 2025AY 2021-22

Bench: MS. KAVITHA RAJAGOPAL (Judicial Member), SHRI. GIRISH AGARWAL (Accountant Member)

For Appellant: Shri. DhavalFor Respondent: Shri. Pravin Salunkhe, Sr. DR
Section 143(3)Section 153Section 92CSection 92C(3)

considering companies which are functionally not comparable to the manufacturing activity of the appellant. 2.11. not considering the impact of economic adjustments i.e., working capital adjustments while computing the operating margin of comparable companies for the purpose of determination of the arm’s length price of the impugned international transaction

Fujitsu India P.Ltd, New Delhi vs. DCIT, New Delhi

The appeal of the assessee is allowed

ITA 693/DEL/2022[2013-14]Status: DisposedITAT Delhi24 Jan 2025AY 2013-14

Bench: Shri S. Rifaur Rahman & Shri Anubhav Sharmaassessment Year: 2013-14 Fujitsu India P. Ltd., Vs National Faceless Assessment Rectangale-1, D-4, Centre, District Centre, New Delhi. Saket, New Delhi – 110 019. Pan: Aaacf4170D (Appellant) (Respondent) Assessee By : Shri K.M. Gupta, Advocate, Ms Shruti Khimta, Ar & Shri Kaskaran Singh, Ca Revenue By : Shri S.K. Jadhav, Cit-Dr Date Of Hearing : 07.01.2025 Date Of Pronouncement : 24.01.2025 Order

For Appellant: Shri K.M. Gupta, AdvocateFor Respondent: Shri S.K. Jadhav, CIT-DR
Section 143(3)

distribution segment. While doing the above, the Ld. TPO concluded the characterization of the Assessee. Further, the Ld. TPO did not allow the working capital adjustment to the operating profit margins of the comparables. Thus the Ld. TPO, vide order dated October 21, 2016, enhanced the income of the Assessee ... benchmarking the international transactions of the Assessee. The Dispute Resolution Panel (‘DRP’) upheld the approach followed by the Ld. AO/TPO, however allowed working capital adjustment to the Assessee in its the directions dated September 21, 2017. Additionally, the DRP also directed the Ld. TPO/AO to compute adjustment on account

Lokesh Kumar Aggarwal, Delhi vs. ITO, Ward-45(5), Delhi

In the result, all appeals of the assessee are partly allowed

ITA 1575/DEL/2023[2012-13]Status: DisposedITAT Delhi20 Jan 2025AY 2012-13

Bench: Shri Vikas Awasthy & Shri Brajesh Kumar Singh

Section 10Section 143(2)Section 143(3)Section 144C(13)Section 144C(5)Section 2Section 92C

receivable as at the end of the financial year on 31st March. As such, this receivable would not have an impact on the working capital adjustment in any manner, but would call for addition on account of the late realization of invoice value for a period of six months ... case and in law, CIT(4) ought to have appreciated that since operating margin of the appellant is higher than the working capital adjusted margin of the comparable companies, no adjustment on account of interest on receivables is warranted. Without prejudice, that on the facts and circumstances of the case

Greenland Finance and Leasing P. Ltd., Delhi vs. ITO, New Delhi

In the result, the appeal of the Assesse in ITA No

ITA 1295/DEL/2019[2010-11]Status: DisposedITAT Delhi06 Jan 2025AY 2010-11

Bench: Shri Vikas Awasthy & Shri Manish Agarwalm/S Wrigley India Private Dcit, Limited Circle-27(2), 206, Okhla Industrial Vs. New Delhi. Estate, Phase Iii, New Delhi-110020 Pan-Aaacw1789P (Appellant) (Respondent) Joint Cit (Osd), M/S Wrigley India Private Circle-27(2), Limited, New Delhi Vs. 206, Okhla Industrial Estate, Phase Iii, New Delhi-110020 Pan-Aaacw1789P (Appellant) (Respondent)

Section 250(6)Section 92CSection 92C(3)Section 92D

disregarding the fresh search conducted by the Appellant in line with the quantitative and qualitative filters proposed by the Ld. TΡΟ; 3.8. denying working capital adjustment to the operating profit margins of the comparables, and in doing so have grossly erred in: 3.8.1. concluding that the Appellant has not been

Greenland Finance and Leasing P. Ltd., Delhi vs. ITO, New Delhi

In the result, the appeal of the Assesse in ITA No

ITA 1294/DEL/2019[2009-10]Status: DisposedITAT Delhi06 Jan 2025AY 2009-10

Bench: Shri Vikas Awasthy & Shri Manish Agarwalm/S Wrigley India Private Dcit, Limited Circle-27(2), 206, Okhla Industrial Vs. New Delhi. Estate, Phase Iii, New Delhi-110020 Pan-Aaacw1789P (Appellant) (Respondent) Joint Cit (Osd), M/S Wrigley India Private Circle-27(2), Limited, New Delhi Vs. 206, Okhla Industrial Estate, Phase Iii, New Delhi-110020 Pan-Aaacw1789P (Appellant) (Respondent)

Section 250(6)Section 92CSection 92C(3)Section 92D

disregarding the fresh search conducted by the Appellant in line with the quantitative and qualitative filters proposed by the Ld. TΡΟ; 3.8. denying working capital adjustment to the operating profit margins of the comparables, and in doing so have grossly erred in: 3.8.1. concluding that the Appellant has not been

Uber India Systems Private Limited (As Successor to Uber India Research and Development Private Limited), Hyderabad vs. DCIT., Circle-8(1), Hyderabad

In the result, the appeal of the assessee is allowed

ITA 581/HYD/2022[2018-19]Status: DisposedITAT Hyderabad30 Dec 2024AY 2018-19

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri Jehangir D MistriFor Respondent: : Ms. M.Narmada, CIT-DR
Section 144B(1)Section 144C(13)Section 92D

Point One') - Softage Information Technology Limited ('Softage') Your Appellant prays that such companies be included as comparables. Non-allowability of appropriate economic adjustments Working Capital Adjustment Disallowed 12. On the facts and in circumstances of the case and in law, the learned TPO erred, and Hon'ble DRP further erred ... upholding/confirming the action of the learned TPO in not allowing working capital adjustment in accordance with under Rule 10B(1)(e)(iii) to account for difference between the working capital ITA No.581/Hyd/2022 5 position of the Appellant and that of alleged comparable companies selected by the learned TPO. Risk Adjustment

Biocon Biologics Limited, Bangalore vs. The Assistant Commissioner of Income Tax, Circle 2(1)(1), Bangalore

ITA 1590/BANG/2024[2020-21]Status: DisposedITAT Bangalore23 Dec 2024AY 2020-21

Bench: Shri Prashant Maharishi & Shri Prakash Chand Yadavit(Tp)A No.1590/Bang/2024

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri D.K. Mishra, CIT(DR)(ITAT), Bengaluru
Section 115JSection 143(3)Section 92Section 92C

length, the need for a separate adjustment in account of interest on delayed receivables is unwarranted as also unjustified 6.7 Working capital adjustment subsumes the delay in receivables and payables and hence, no separate adjustment on outstanding receivables is required. 6.8 By ignoring the fact that the Appellant ... from such business operations, they are inter-linked and could not have been separately benchmarked. ii. He further submitted that even otherwise, if working capital adjustment is granted to the assessee, it would have resulted into a better margin in favour of assessee and therefore even otherwise this adjustment could

Ramboll India Private Limited, New Delhi vs. ACIT, Circle-19(1), Delhi

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

ITA 1468/DEL/2022[2018-19]Status: DisposedITAT Delhi18 Dec 2024AY 2018-19

Bench: Shri M. Balaganesh & Shri Anubhav Sharmaramboll India Pvt. Ltd, Vs. Acit, 30, Mohan Singh Palace, Circle-19(1), Connaught Place, New Delhi Delhi (Appellant) (Respondent) Pan:Aahcp8488M

For Appellant: Shri K. M. Gupta, AdvFor Respondent: Shri Zafarul Haque Tanveer, CIT DR
Section 92C

with the borrowing or lending of money and not with sale. The Learned AR also observed that the Learned TPO did not grant working capital adjustment in the provision of services segment. Had the working capital adjustment been given, there would be no need to impute any interest on outstanding ... receivables as the same would get subsumed in the working capital adjustment itself. In fact, the Learned DRP had directed the Learned TPO to grant working capital adjustment, but the same was not given by the Learned TPO. He placed reliance on the decision of Hon’ble Jurisdictional High Court

Concur Technologies (India) Private Limited, Bengaluru vs. Assistant Commissioner F Income Tax Circle 2(2)(1), Bengaluru

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

ITA 1925/BANG/2024[2020-2021]Status: DisposedITAT Bangalore05 Dec 2024AY 2020-2021

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: Shri Chavali Narayan, CAFor Respondent: Ms. Neera Malhotra, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 144C(5)Section 92B

transaction as per provisions of section 92B of the Act. 4. The learned AO/ TPO erred in law and facts by not granting working capital adjustment which was sought for and contended by the Appellant before the learned TPO. 5. Without prejudice to Appellant contentions that the outstanding receivables should ... computed on TNM Method, the above adjustment of outstanding receivable subsumes and there cannot be any separate international transaction, (iii) assessee requested for working capital adjustment, but same was not granted to assessee and if working capital adjustment is granted, then the above adjustment could not be made

Benu Networks Packet Switch Private Limited, Hyderabad vs. DCIT, Circle -1 (2), Hyderabad

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

ITA 86/HYD/2022[2017-18]Status: DisposedITAT Hyderabad25 Nov 2024AY 2017-18

Bench: Shri Vijay Pal Rao, Vice-A N D Shri Manjunatha, G. & आ.अपी.सं /Ita No.86/Hyd/2022 (िनधा"रण वष"/Assessment Year: 2017-18) Benu Networks Packet Switch Vs. Dy. Commissioner Of Income Tax, Circle 1(1) Private Ltd, Hyderabad Hydrabad Pan:Aaecb4902B (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri Ashish Jain, Ca राज" व "ारा/Revenue By:: Shri B Balakrishna, Dr सुनवाई की तारीख/Date Of Hearing: 13/11/2024 घोषणा की तारीख/Pronouncement: 25/11/2024 आदेश/Order

For Appellant: Shri Ashish Jain, CAFor Respondent: : Shri B Balakrishna, DR
Section 143(3)Section 144C(5)Section 92B

erred in confirming the same. Ground No.6 Without the prejudice to the ground number 5, the learned TPO has erred in not providing working capital adjustment which itself takes the impact of outstanding receivable on profitability. Accordingly, no separate adjustment is warranted on deferred receivable and the learned Assessing Officer

DCIT, Circle-4(2), New Delhi vs. Coforge Ltd (Formerly Niit Technologies Ltd), New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 1263/DEL/2022[2016-17]Status: DisposedITAT Delhi20 Nov 2024AY 2016-17

Bench: Shri Pradip Kumar Kedia & Shri Pradip Kumar Kedia & Shri Pradip Kumar Kedia & Shri Anubhav Sharmashri Anubhav Sharma

Section 14ASection 92B

that of comparables after allowing working is better than that of comparables after allowing working is better than that of comparables after allowing working capital adjustment ignoring the fact that the receivables capital adjustment ignoring the fact that the receivables capital adjustment ignoring the fact that the receivables were outstanding

Cognizant Technology Solutions India Private Limited(Erstwhile Excellence Data Research Private Limited), Chennai vs. Asst. Commissioner of Income Tax, Central Circle-17(1), Hyderabad

In the result, appeal of the assessee is partly allowed

ITA 13/HYD/2018[2013-14]Status: DisposedITAT Chennai08 Nov 2024AY 2013-14

Bench: Shri Aby T. Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita No.13/Hyd/2018 िनधा"रण वष"/Assessment Year: 2013-14 V. M/S. Cognizant Technology- The Acit, Solutions India Pvt. Ltd., Circle-17(1), 9Th Floor, (As Successor In Interest Of Erstwhile Excellence Data Signature Towers, Opp: Botanical Garden, Research Pvt. Ltd.), 6Th Floor, New No.165, Old No.110, Kondapur, Hyderabad. Menon Eternity Building, St. Mary’S Road,Alwarpet, Chennai-600 018. [Pan: Aabce 4933 C] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Mr. S.P.Chidambaram, AdvFor Respondent: Ms. C. Vatchala, CIT
Section 143(3)Section 144C(5)Section 92C

AO/DRP erred in rejecting the use of multiple year data and using data for FY 2012-13 only. Negative working capital adjustment 13 That on the facts and circumstances of the case or in law, AO/DRP has erred in making negative working capital adjustment in the Appellant's case ... year data i.e., AY 2013-14. And thereafter, TPO proposed 7 new comparables with a margin of 22.30% and further TPO computed negative working capital adjustment at minus 8.13% and increased arm’s length margin of comparable companies to 30.43% and proposed adjustment of Rs.1

Deputy Commissioner of Income Tax, Corporate Circle-3(1), Chennai vs. Triumph International (India) Private Limited, Kancheepuram

In the result, both the appeal filed by the Revenue and the cross objection filed by the assessee are dismissed

ITA 1657/CHNY/2024[2012-13]Status: DisposedITAT Chennai18 Oct 2024AY 2012-13

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita No.: 1657/Chny/2024 िनधा"रण वष"/Assessment Year:2012-13 & C.O No.64/Chny/2024 [In I.T.A. No.1657/Chny/2024] The Deputy Commissioner Triumph International Of Income Tax, Vs. (India) Pvt. Ltd., Corporate Ward 3(1), 240-B, Sengundram Village, Chennai – 600 034. Singaperumal Koil, Kanchipuram – 603 204. Pan: Aabct 5775D (अपीलाथ"/Appellant) (""यथ"/Respondent/Cross Objector) राज"व क" ओर से /Revenue By : Shri A. Sasikumar, Cit िनधा"रती क" ओर से/Assessee By : Shri S.P. Chidambaram, Advocate सुनवाई क" तारीख/Date Of Hearing : 10.10.2024 घोषणा क" तारीख/Date Of Pronouncement : 18.10.2024

For Appellant: Shri S.P. Chidambaram, AdvocateFor Respondent: Shri A. Sasikumar, CIT
Section 143(3)Section 92C

preceding paragraphs would mutatis-mutandis apply to this issue. No interference would be required in the final list of comparable entities. The working capital adjustment, as granted by Ld. DRP in AY 2010-11, would be allowed to the assessee if the assessee is able to demonstrate the same

Red Hat India Pvt Ltd, Mumbai vs. Dy CIT Circle- 15 (3)(1), Mumbai

ITA 215/MUM/2020[2015-16]Status: DisposedITAT Mumbai09 Sept 2024AY 2015-16

Bench: Shri Gagan Goyal & Shri Raj Kumar Chauhanm/S. Red Hat India Pvt. Ltd., A-201, Supreme Business Park, Supreme City, Hiranandani Gardens, Powai, Mumbai – 400 076, Pan No. : Aabcr7091N. ….. Appellant

For Appellant: Shri Ajit Jain, Ms. Nikhila Bhalla and Archita Bhalla Ld. ARsFor Respondent: Shri Yogesh Kamat Ld. CIT-DR
Section 143(3)Section 144C(10)

this regard Ld. AR confined his arguments to Ground No. 1.5(c) in relation to granting of working capital adjustment and submitted that Hon'ble Mumbai ITAT in assessee’s own case for A.Y. 2016-17 – ITA No. 1379/Mum/2021 on identical facts has granted the working capital adjustment ... hearing. The relevant extract is reproduced as under: “64… So we are of the considered view that the assessee is entitled for working capital adjustment. The Ld. TPO is directed to verify the computation furnished by the Assessee and accordingly provide the working capital adjustment to the Assessee in view

Comparex India P.Ltd, New Delhi vs. ITO, Circle-4(2), New Delhi

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

ITA 2151/DEL/2022[2018-19]Status: DisposedITAT Delhi09 Sept 2024AY 2018-19

Bench: SHRI S.RIFAUR RAHMAN (Accountant Member), SHRI YOGESH KUMAR U.S. (Accountant Member)

For Appellant: Shri Ajit Jain, ARFor Respondent: Shri Rajesh Kumar, CIT DR
Section 143(2)Section 143(3)Section 144C(10)Section 144C(13)Section 144C(8)Section 92CSection 92C(3)

adjustment is revised. Rs.NIL/- (*Detailed computation given below). (iii) The DRP directed to Revenue- verify the filters and allow the working capital adjustment on the Rs.1,85,52,925/- issue of payment of sourcing fee/purchase & sale of software. Accordingly, the amount of the adjustment is revised. Further, he brought

M/S Emerson Automation Solutions Intelligent Platforms Pvt. Ltd, Bangalore vs. DCIT, C-3(1)(2), Bangalore

In the result, the Ground Nos

ITA 9/BANG/2019[2014-15]Status: DisposedITAT Bangalore30 Aug 2024AY 2014-15

Bench: Shri Prakash Chand Yadav & Shri Waseem Ahmedm/S Emersion Automation Solutios The Deputy Commissioner Intelligent Platforms Private Limited Of Income Tax, Circle- (Formerly M/S Ge Intelligent 3(1)(2), Bmtc Building, Platforms Private Limited), Velankani Vs. Koramangala, Bangalore Tech Park, Building 9, First Floor, 43 Hosur Road, Bangalore-560100 Pan – Aaacg7573K (Appellant) (Respondent) Assessee By: Sri. Sachit Jolly & Sri. Rishabh Malhotra, Advocates Revenue By: Sri. Subramanian. S, Jcit Date Of Hearing: 13.08.2024 Date Of Pronouncement: 30.08.2024 O R D E R Per: Prakash Chand Yadav,J.M. Present Appeal Of The Assessee Is Arising From The Order Of Ld. Ao / Drp Dated 30Th October, 2018. The Assessee Has Raised 19 Grounds Of Appeal Out Of Which Ground Nos. 1 To 5 Are General In Nature & Hence Not Required Specific Adjudication. Ground No. 6 Related To The Grievance Of The Assessee With Respect To The Adjustment Of Custom Duty, Base Cost, Working Capital Not Granted By The Ao While Completing The Assessment. Ground No. 7 Is With Respect To The Applicability Of Tnmm Method Instead Of Rpm Method Applied By The Assessee For Its Trading Segment Transactions. Ground Nos. 8, 9 & 10 Are Related To The Rejection Of Comparability Analysis Conducted By The Tpo As Affirmed By The Drp & Followed By Ao. Ground No. 11 Is With Respect To The Adjustment Of Working Capital Denied By Tpo Affirmed By Drp & Followed By Ao. Ground No. 12 Is With Respect To The Disallowance Of Foreign Exchange Fluctuation & Ground Nos. 13 & 14 Is With Respect To The Payments Made To Headquarters In Lieu Of Services Obtained By Applying

For Appellant: Sri. Sachit Jolly & Sri. RishabhFor Respondent: Sri. Subramanian. S, JCIT
Section 115JSection 142(1)Section 143Section 143(1)Section 143(2)Section 143(3)Section 144Section 144CSection 271(1)(b)Section 5

No.11 is concerned, the contention of the assessee is that the TPO as well as DRP have erred in law in not granting working capital adjustment for manufacturing and trading segment. Ld. counsel for the assessee has argued that it is settled position of law that difference between the working ... profits of the tested parties. Ld. TPO has also observed that the assessee failed to file any data to support the contention of working capital adjustment. We further observed that the ld. DRP in its order at page no. 13 in para 2.7.1 has principally accepted that Rule 10B provides