The Tribunal held that the companies selected by the TPO were from different verticals and functioning lines. The Tribunal dismissed the Department’s appeal. That the Tribunal in the assessee’s own case for the assessment year 2009-10 had directed the Assessing Officer to compute the margin in respect of the comparables and the assessee after excluding the depreciation from the cost. The facts being the same as in the assessment year 2009-10, there was no infirmity in adopting the consistent view in computing the margin in respect of the comparables after excluding the depreciation from the cost. The Tribunal remanded the matter and held that the assessee was to provide all relevant information and evidence to substantiate its claim and proper opportunity of being heard must be granted to the assessee in accordance with law. (AY.2011-12)
ITO v. Micro Focus Software India Pvt. Ltd. (2022)97 ITR 1 (Bang) (Trib)
S. 92C : Transfer pricing-Arm’s length price-Transactional net margin method-Comparables-Assessee engaged in business of software development service and Information Technology service-Company with turnover of more that 200 crores-Company having less than 75% revenue from software development services-Company providing high end services-To be excluded-Profit level indicator-Assessee depreciating at a higher rate than comparables-Margin to be adopted after excluding depreciation-Resale Price Method-Rejection of assessee’s application for resale price method-TPO to consider application as per transfer pricing study-Matter Remanded.[S.92CA]