SABA SOFTWARE INDIA P.LTD, MUMBAI V. ITO 8(3)-1, MUMBAI

ITA 6953/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92606 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Next Hearing Date: 19-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 16-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N PADMANABAN
• Keywords: Transfer pricing; Principle of natural justice; International transaction
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI BEFORE HONBLE S/SHRI VIJAY PAL RAO ( JM ) , AND B.R.BASKARAN (AM) , . . , ./ I.T .A. NO . 6953 / MUM/20 1 2 ( / ASSESSMENT YEAR : 2008 - 09 ) SABA SOFTWARE INDIA P VT L TD , PSIR BUILDING, 90/8,MIDC CROSS ROAD, A ANDHERI (E), MUMBAI - 400093 / VS. INCOME TAX OFFICER 8 ( 3 )(1), AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AADCS8646N / : ASSESSEE BY SHRI A RUN CHHABRA / REVENUE BY : SHRI N PADMANABAN / DATE OF HEARING : 2 6 .0 5 . 201 5 / DATE OF PRONOUNCEMENT : 29. 5. 2015 / O R D E R 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 TH E 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 U NIT HAVING UNDERTAKING S IN MUMBAI AND PUN E. THE ASSESSEE ENTERED INTO INTERNATIONAL TRANSAC TION S WITH ITS ASSOCIATED ENTERPRISES EXCEEDING 15 CRORES . I N THE ITA NO. 6953 /MUM/201 2 2 TRANSFER PRICING STUDY , T HE AS SESSEE SUBMITTED 15 COMPARABLES. H OWEVER, THE TPO REJECTED 11 COMPARABLES AND ACCEPTED ONLY FOUR COMPARABLES SUBMITTED BY THE ASSESSEE. FURTHER, THE TPO INCLUD ED 19 MORE COMPARABLES AND THUS, T HE TPO CONSIDERED 23 COMPARABLES IN TOTAL TO DETERMINE THE ALP OF THE INTERNATIONAL TRANSACTIONS. 3 . BEFORE THE DRP, THE ASSESSEE CHALLENGED 8 COMPARABLES INCLUDE D BY TPO AND ALSO C ONTEST ED EXCLUSION OF 4 COMPARABLES SUBM ITTED BY THE ASSESSEE . THE DRP ACCEPTE D 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 ASSE SSEE. WITH REGARD TO THE REMAIN ING 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, T HE 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 EXAMIN E 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 TH E 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/201 2 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 . 29 TH MAY , 2015 SD SD ( / VIJAY PAL RAO ) ( . . , / B.R. BASKARAN ) / JUDICIAL MEMBER / ACCO UNTANT MEMBER MUMBAI: 29TH MAY, 201 5 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. 6 , , / DR, ITAT, MUMBAI CONCERNED / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI