Saba Software India P.Ltd, Mumbai vs Assessee

PER B.R.BASKARAN (AM) The assessee has filed this appeal challenging the assessment order dated 24.9.2012 passed by the AO in conformity with the direction issued by Dispute Resolution Panel-II, Mumbai (DRP). The assessee has challenged the transfer pricing adjustment made by AO as per the direction of the DRP.

2. We heard the parties and perused the record. The assessee company is engaged in the business of providing software development services and it is a subsidiary of M/s Saba Software, Inc. USA. The assessee company is a 100 percent export oriented Unit having undertakings in Mumbai and Pune. The assessee entered into international transactions with its Associated Enterprises exceeding 15 crores. In the ITA No.6953/Mum/2012 2

Transfer Pricing Study, the assessee submitted 15 comparables. However, the TPO rejected 11 comparables and accepted only four comparables submitted by the assessee. Further, the TPO included 19 more comparables and thus, the TPO considered 23 comparables in total to determine the ALP of the international transactions.

3. Before the DRP, the assessee challenged 8 comparables included by TPO and also contested exclusion of 4 comparables submitted by the assessee. The DRP accepted the contentions of the assessee in respect of two comparables, viz., M/s Infosys Technologies Ltd and M/s Wipro Ltd out of the 12 comparables (8 included by TPO and 4 excluded by TPO) that were contested by the assessee. With regard to the remaining 10 items of comparables, the DRP did not pass any speaking order.

4. The Ld A.R contended that the DRP was not justified in not considering the objections of the assessee with regard to the 10 items of comparables. Before us, the Ld D.R could not contradict the contentions of the assessee. Under these circumstances, in the interest of natural justice, we are of the view that the issue relating to the 10 items of comparables that were objected by the assessee needs to be examined afresh by the DRP. Accordingly, we set aside the order of the AO/DRP in respect of the T.P. adjustment and restore the same to the file of the AO/DRP with the direction to examine the same afresh by duly considering the objections raised by the assessee with regard to the 10 comparables and pass a speaking order thereon.

5. At the time of hearing, the Ld A.R submitted that the DRP did not address the objection raised by the assessee with regard to the use of information obtained by the department u/s 133(6) of the Act without confronting the same with the assessee. Hence, we direct the AO/concerned tax authority to furnish the said information to the assessee and duly consider the explanations that may be furnished by the assessee in that regard.

ITA No.6953/Mum/2012 3 6. In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.

The above order was pronounced in the open court on 29th May, 2015.

th घोषणा खल ु े यायालय म दनांकः 29 May, 2015 को क गई ।

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( वजय पाल राव/VIJAY PAL RAO) (बी.आर. बा करन,/ B.R. BASKARAN) या यक सद य / Judicial Member लेखा सद य/Accountant Member मुंबई Mumbai: 29th May,2015. व. न.स./ SRL , Sr. PS

आदे श क त ल प अ े षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आयु त(अपील) / The CIT(A)- concerned

4. आयकर आयु त / CIT concerned

5. वभागीय त न ध, आयकर अपील य अ धकरण, मुंबई / DR, ITAT, Mumbai concerned 6 गाड फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, True copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai