Copal Research India Pvt. Ltd. , Gurgaon vs Assessee

M/s Copal Research India Pvt.Ltd. vs. ITO, Ward 3(4) 6th floor, Vatika Atrium New Delhi Sector 53, Gurgaon

PAN: AACCC1159 R

(Appellant) (Respondent)

Appellant by:- S/Sh: Kanchan Kaushal, C.A. Rohit Tiwari, C.A. Anubhav Rastogi, C.A.

Respondent by:- Sh.Judy James, Standing Counsel, D.R.

ORDER

PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER

Both these appeals are filed by the assessee and are directed against separate orders of the Assessing Officer (A.O.) passed u/s 143(3) r.w.s. 144C of the Income Tax Act, 1961 (the 'Act') on 21.7.2010 pertaining to the Assessment Year ('A.Y.') 2006-07 and on 27.10.2011 for the A.Y. 2007-08. As the issues arising in both the appeals are common, for the sake of convenience they are heard together and are disposed of by way of this common order.

2. Facts in brief:- Copal Research India Private Ltd. (the assessee) was incorporated in India in December, 2002. During the FY 2005-06, the assessee was engaged in provision of Information Technology enabled back office support services ITeS) to its group companies. In return for rendering these services, the assessee was remunerated on cost plus basis i.e. it was compensated for all its costs, plus a mark up of 12.20% thereon. In respect of its services, the assessee acts as a routine ITeS provider that employees routine tangible assets and assumes less than normal risks associated with carrying out such business. Accordingly, the assessee operates on a risk insulated basis in carrying out this activity. In respect of the profits earned by it from the provision of the above services, the assessee is entitled to a tax holiday u/s 10A of the Act and makes the necessary statutory filings with the Software Technology Park of India (STPI).

During the relevant financial year, the assessee undertook the following international transactions with the Associated Enterprises(AEs).

International Transactions for FY 2005-06 (For the AY 2006-07) Particulars Amount (in Rs.Crores) Provision of Information Technology 12.02 enables Services (ITeS)

International Transactions for FY 2006-07 (For the AY 2007-087) Particulars Amount (in Rs.Crores) Provision of Information Technology 32.99 enables Services (ITeS)

3. The assessee filed a Transfer Pricing Study Report for both the Assessment Years. The A.O. referred the same to the Transfer Pricing Officer ('T.P.O.' for short) for computation of arm's length price ('A.L.P.') of the said international transaction. The T.P.O.-I, New Delhi passed orders u/s 92 CA(3) of the Act proposing certain adjustments. The A.O. passed a draft assessment order. The assessee filed objections before the Dispute Resolution Panel (D.R.P.). Thereafter the D.R.P. passed its order u/s 144C(5) of the Act. Thereafter the A.O. passed order u/s 143(3) read with section 144C of the Income Tax Act, 1961 (the 'Act') for both the A.Ys. Aggrieved the assessee is in appeal before us.

2 4. We have heard Shri Kanchan Kaushal, CA and Shri Rohit Tiwari, CA along with Shri Anubhav Rastogi, CA, the Ld.Counsels for the assessee and Sri Judy James, Standing Counsel, on behalf of the Revenue.

5. On a careful consideration of the facts and circumstances of the case, on perusal of material on record, orders of the authorities below, case laws cited, we hold as follows.

6. We find that the D.R.P. has not passed a speaking order in this case for both the A.Ys. The assessee has raised a number of contentions before the D.R.P. and none of these contentions were considered by the D.R.P. Under these circumstances we have no other alternative but to remand the matter back to the file of the D.R.P., with a direction that D.R.P. shall pass a speaking order on each and every contention raised by the assessee. It shall also give its views on various case laws cited by the assessee. In the result both these appeals are set aside to the file of the A.O. . and are treated as allowed for statistical purposes.

7. In the result both the appeals of the assessee for the AY 2006-07 and 2007-08 stand allowed for statistical purposes.

Order pronounced in the Open Court on 08th May, 2015.

Sd/- Sd/-

(H.S. SIDHU) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated: the 08th May,2015

*manga

Copy of the Order forwarded to:

3 1.Appellant; 2.Respondent; 3.CIT; 4.CIT(A); 5.DR; 6.Guard File

By Order

Asst. Registrar

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