Income Tax Appellate Tribunal - Delhi
Agilent Technologies (International) ... vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "A" NEW DELHI
BEFORE SHRI R.P. TOLANI AND SHRI K.G. BANSAL
ITA No. 5352/Del/11
A.Y. 2007-08
Agilent Technologies (International) Vs. ACIT, Gurgaon Circle,
Pvt. Ltd. Plot no. 11, Sector-8, Gurgaon.
MT Manesar, Gurgaon.
PAN/ GIR No.AAACB8891K
( Appellant ) ( Respondent )
Appellant by : Shri Vijay Iyer Adv. &
Shri Manoneet Dalal Adv.
Respondent : Shri Peeyush Jain CIT DR
ORDER
PER R.P. TOLANI, J.M::
This is assessee's appeal against the order of ACIT, Circle-1(1), Gurgaon dated 31-10-2011 passed u/s 143(3)/r.w.s. 144C of the I.T. Act, 1961 (pursuant to DRP directions dated 10-08-2011), relating to A.Y. 2007-
08.
2. Assessee has raised as many as 17 grounds of appeal to challenge the determination of arms length price ("ALP") of the international transactions, held out by the assessee. The main challenges are:
(i) rejecting certain comparables, economic performance data;
(ii) TPO's exercising power s u/s 133(6) of the Act to obtain information which is neither in the public domain nor the details whereof were provided to assessee to meet the contents/data.
(iii) Adopting the data of certain companies on ad hoc basis.2
3. Learned counsel for the assessee contends that the assessee is engaged in providing routine IT-enabled and software development services to its associated enterprises ("AES"). The assessee filed necessary transfer pricing report ("T.P. report") which was based on data available in public domain, AO did not accept the same.
3.1. In arriving at the set of comparable companies, the TPO has relied on this information gathered for non public domain by using powers u/s 133(6). It is pertinent to note that this information is neither contained in the annual reports nor in the public domain data base and is not accessible to the appellant. It is further submitted that in many instances, information gathered by 133(6) notices was the appellant nor any opportunity was given to present its arguments. In other instances, the information gathered was very sketchy and incomplete, insufficient to decide the comparability of data.
3.2. Such data is collected from following companies"
- Accel Transmatic Ltd. (Seg.)
- Avani Cimcon Technologies Ltd.
- Celestial Labs Ltd.
- Datamatics Ltd.
- E-Zest Solutions Ltd.
- Geometric Ltd. (Seg.)
- Helios & Matheson Information Technology Ltd.
- Ishir Infotech Ltd.
- KALS information Systems Ltd. (Seg.)
- Lucid Software Ltd.
- Mediasoft Solutions Ltd.
- Megasoft Ltd.3
- Mindtree Ltd.
- Persistent Systems Ltd.
- Quintegra Solutions Ltd.
- R.S. Software (India) Ltd.
- Sasken Communication Technologies Ltd. (Seg.)
- Tata Elxsi Ltd. (Seg.)
- Thirdware Solutions Ltd.
3.3. Ld. counsel thus contends that the TPO has gathered the information from non-public domain and contrary to methodology as prescribed by Rule 10B(2) Thus the comparability analysis arrived at by TPO is erroneous and untenable. It is vehemently argued that the T.P. adjustment may be deleted or alternatively the issue may be restored back to the file of TPO to examine the same afresh after providing the assessee the material being used against it. Reliance is placed on M/s Genisys Integrating Systems (India) Pvt. Ltd. [ITA no. 1231/Bang/2010], for the proposition that in order to use the information gathered by using sec. 133(6), it is incumbent on TPO to furnish such information to the assessee and arrive at the ALP after considering the objections raised by the assessee in that behalf. Further reliance is placed on M/s Kodiak Networks (India) Pvt. Ltd. [ITA no. 1413/Bang/2010] for the same purpose.
4. Ld. DR is heard who supports the order of AO.
5. We have heard rival contentions and gone through the relevant material available on record. From the material placed before us it emerges that TPO has utilized information for comparability from the companies which are not in public domain. The information has been obtained by issuing notices u/s 133(6) and the gathered information is not supplied to assessee to enable it to meet the objections. The principle of natural justice 4 enunciate that before proceeding to use some material against assessee, the same should be supplied and the issue should be decided after hearing the objections in this behalf. This view is supported by the coordinate benches of the ITAT in the cases of M/s Genisys Integrating Systems (India) Pvt. Ltd.; and M/s Kodiak Networks (India) Pvt. Ltd. (supra). Consequently, we are of the view that such information gathered by the TPO u/s 133(6) should be provided to the assessee to enable it to verify the comparable figures with a right to file objection/ apply thereon. The TPO shall arrive at the ALP after providing the assessee adequate opportunity of being heard in accordance with law. Consequently, we set aside the matter back to the file of AO/TPO accordingly.
6. In the result, assessee's appeal is allowed for statistical purposes only. Order pronounced in open court on 15-6-2012.
Sd/- Sd/-
( K.G. BANSAL ) ( R.P. TOLANI )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 15-6-2012.
MP
Copy to :
1. Assessee
2. AO
3. CIT
4. CIT(A)
5. DR
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