The Tribunal dismissed the appeal and cross-appeal of
Revenue Authorities and the Taxpayer respectively as the matter in
dispute was resolved in MAP proceedings
Facts of the Case
Northern Operating Services Private Limited ["the
taxpayer"] is an Information Technology Enabled Services
provider. For assessment year 2010-11, appeal and cross appeal were
filed by the Revenue and the taxpayer respectively against the
order of the Assessing Officer ["AO"] before Income-tax
Appellate Tribunal ("the Tribunal").
Following grounds were raised by the Revenue before the
That the Dispute Resolution Panel ("DRP") erred
in rejecting certain comparable companies citing that size and
turnover of any company are reliable factors for treating it as an
appropriate comparable; and
That the DRP erred in excluding companies on the basis of
turnover being more than 200 crores.
The taxpayer, on the other side filed a cross-appeal against the
order of the Revenue and raised the following objections:
That the lower tax authorities erred in objecting the
application of upper limit of the turnover filter while selecting
comparable companies without providing any empirical analysis;
That the DRP erred in not excluding a comparable company
based on functionally dissimilar function.
Ruling of the Tribunal
Whilst the course of hearings before the Tribunal, the taxpayer
submitted it had filed a Mutual Agreement Procedure
["MAP"] Application pursuant to the provisions of Indo-US
DTAA with respect to its transfer pricing ["TP"]
adjustments made by Indian tax authorities. It was also
submitted that the matter covered in MAP Application is the subject
matter of the appeal before by the Tribunal. I the light of
the same, the Tribunal held that since the taxpayer agreed to the
order passed by the Joint Commissioner Of Income Tax giving effect
of the MAP order (passed based on the mutually agreed between the
competent authorities of India and US), the grounds raised by the
taxpayer as well as the Revenue before the Tribunal are infructuous
and accordingly, dismissed.
Appeal: DCIT Vs M/s Northern Operating Services Private
Limited [ITA (TP)A No. 112/Bang/2015]
Cross Appeal: M/s Northern Operating Services Private
Limited Vs DCIT [IT(TP)A No. 210/Bang/2015 & Co.
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Cummins Inc. is a foreign company, rendering services in respect of desktop/laptop software license and internet mail facilities to its Indian associated enterprises, i.e. CIL and CSSL which were paying IT charges provided by the taxpayer.
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