Itta/310/2011 Of The Commissioner Of Income Tax-1 v. M/S Convergys Information Management India [P] Limited

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI I.T.T.A.No.310 of 2011 DATED: 2.7.2013 Between:The Commissioner of Income Tax-I,Hyderabad. … Appellant And M/s. Convergys Information Management (India)Pvt. Ltd.,Hyderabad. … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI I.T.T.A.No.310 OF 2011 Judgment:(per the Hon’ble the Chief Justice Sri Kalyan JyotiSengupta) This appeal is sought to be admitted on thefollowing suggested questions of law: i) Whether in the facts and circumstances of thecase, the I.T.A.T. is justified in granting total relief tothe assessee ignoring the arms length principleaccording to which both the enterprises are to betreated as independent enterprises for the purpose ofdetermining the arms length price with respect to thetransactions with the Associated Enterprise ? ii) In the facts and circumstances of the case,whether the Tribunal ignored the concept of transferpricing that the transactions with AE are to beconducted at market price or comparable price thattoo given the fact that the assessee company is a100% subsidiary ? iii) In the facts and circumstances of the case, giventhe fact that the assessee company is a captive service provider to its Associated Enterprise, whetherthe ITAT is justified in holding that no services wererendered for part of the previous year ? iv) In the facts and circumstances of the case,whether the ALP cannot be determined for the pre-agreement period ? This appeal is preferred against the judgment andorder of the learned Tribunal dated 31.1.2011 in relation toassessment year 2004-05. We have heard the learned counsel for theappellant and gone through the impugned judgment andorder of the learned Tribunal. In our considered view, in this matter, no questionof law is involved as both the learned Tribunal as well asCommissioner of Income Tax (Appeals) came to factfinding as follows: “The assessee/respondent has incurredexpenditure from 1.1.2004 to 14.3.2004, i.e., afterentering into agreement with AE on 1.1.2004 atRs.2,54,17,576/- and this amount is liable formark up at 10% because no customer would paymark up before entering into agreement and theexpenditure incurred only after the agreementhas to be made out. Accordingly, theCommissioner of Income Tax (Appeals) isjustified in considering the expenditure incurredafter 1.1.2004 to 14.3.2004 to make adjustmentsat 10% of these expenses at Rs.24,41,757/-. Therevenue has not brought any material on recordto show that the assessee has incurred any expenditure before entering into serviceagreement on the impugned issue.” In view of the same, we do not like to interfere withthe impugned judgment and order. The appeal isaccordingly dismissed. ________________________ K.J. SENGUPTA, CJ ______________________ G. ROHINI, J 02.07.2013pnb