Symantec Software Solutions (P) Ltd. v. ACIT

INCOME TAX ACT, 1961

--Transfer pricing --Computation of ALPTransfer pricing adjustments vis-a-vis comparable financial information--The assessee was engaged in the business of providing technical and marketing, pre-sale and after sales support of Veritas group products in India. The assessee filed its return of income on 29-11-2006 declaring total income of Rs. 75,88,386. Since the assessee had international transaction the reference was made under section 92CA(1) to the transfer pricing officer for computation of Arm's Length Price in relation to international transactions vide order dated 18-8-2008. The transfer pricing officer made transfer pricing adjustment of Rs. 2,54,27,043 vide order dated 15-10-2009. The AO prepared the draft order under section 143(3)(ii) read with section 144C dated 27-11-2009, whereby proposed disallowance/addition including transfer pricing adjustment of Rs. 2,54,27,043. The assessee filed its objections along with Form No. 35A in respect of various additions and disallowance made by the AO in the draft order before the Dispute Resolution Panel (DRP). The DRP after considering the contention of the assessee passed the direction dated 27-7-2010. Pursuant to the direction of the DRP, the AO passed the consequential order dated 30-9-2010. Held: It is not the case of the assessee that the data were not available in the public domain but the objection of the assessee is that the data was not accessible to the assessee at the time of TP study when there is no bar in using the complete data of the comparables for determining the ALP in relation to the international transaction, then the objection raised by the assessee is baseless and without any substance. Further, it appears that the assessee raised the objection of using the data because it turns out to be unfavourable to the assessee and when the correctness and authenticity is not doubted, the objection of the assessee is not sustainable. When the assessee has not made out a case taking the data for only current financial year does not present the correct and fair financial result of the comparables, then there is no mistake in considering the data for the financial year in which the international transaction has been entered into. There is a rationale for using the data of the comparables pertaining to the same period during which the international transactions took place because it will rule out the effect of difference in economic and market conditions prevailing/exist at different time period. Therefore, there is no error or illegality by taking into consideration only the data of the financial year in which the international transaction has been entered into.