The Tax Publishers2020 TaxPub(DT) 4822 (Del-Trib)

INCOME TAX ACT, 1961

Section 92C

Accentia Technologies Ltd. was engaged only in one activity, namely healthcare receivable management and therefore, it was not at all engaged in any other business. Also, merged company was not carrying on any different business from Accentia Technologies Ltd. and hence, there was no impact of any extraordinary event during the year on financials or operating margins of the company. Further, with respect to significant intangible, in annual accounts of standalone balance sheet only goodwill amalgamation/merger was accounted for, therefore, it could not have any impact as was merely an accounting entry. Accordingly, Accentia technologies Ltd. was rightly taken as comparable to assessee engaged in back office medical transcription services.

Transfer pricing - Determination of ALP - Selection of comparables - No business diversity, impact of extraordianry event and intangibles as pleaded by assessee

Assesee rendered back office medical transcription services to its AE abroad. TPO considered Accentia Technologies Ltd. as comparable to assesse's case. Assessee challenged this on the ground that in case of said company there was no segmental data available from new ventures like legal process outsourcing data process outsourcing and high-end software services delivery and TPO considered profitability at an overall entity level. Further, there was extraordinary event of amalgamation in case of Accentia Technologies Ltd. company owned significant intangible assets, which impacted profitability. Held: Accentia Technologies Ltd. was engaged only in one activity namely healthcare receivable management and therefore, it was not at all engaged in any other business. Also, merged company was not carrying on any different business from Accentia Technologies Ltd. and hence there was no impact of any extraordinary event during the year on financials or operating margins of the company. Further, with respect to significant intangible, in annual accounts of standalone balance sheet only goodwill amalgamation/merger was accounted for, therefore, it could not have any impact as was merely an accounting entry. Accordingly, Accentia technologies Ltd. was rightly taken as comparable to assessee's case.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2010-11


INCOME TAX ACT, 1961

Section 92C

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