INCOME TAX ACT, 1961

Section 92C

Transfer pricing - Computation of arm's length price - Selection of comparables -

Assessee was a wholly-owned subsidiary and was primarily engaged in rendering software development services to its associate enterprises. In the assessment year 2009-10 realised net profit margin of 15.45% in respect of international transactions with its associate enterprises. Assessee had international transactions with its associate enterprises. Therefore, AO referred the case of assessee to TPO to determine the ALP. TPO, after examining the details furnished by assessee, passed an order under section 92CA by making an adjustment in respect of software development services. AO thereafter passed an order of assessment incorporating the transfer pricing adjustment. CIT(A) by an Order excluded Infosys Ltd. on account of its enormous size and bulk and partly allowed the appeal. Held: It is the cardinal principle of law that Tribunal is fact finding authority and a decision on facts rendered by the Tribunal can be gone into by the High Court only if a question has been referred to it, which says the finding of Tribunal is perverse. The issue as to whether Infosys Ltd was comparable to assessee and is functionally dissimilar is a finding of fact. Order passed by CIT(A) it was evident that he had dealt with the findings recorded by TPO and the same was approved by Tribunal by assigning cogent reasons. The aforesaid findings are finding of facts. No element of perversity was either pleaded or demonstrated before the court. Thus, appeal of Revenue was dismissed.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10

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