The Income Tax Appellate Tribunal (ITAT), Bangalore directed to apply MAP rate on transactions, thereby granting relief to M/s Conduent Business Services India LLP.
The assessee, M/s Conduent Business Services India LLP filed return of income declaring a total income of Rs.77,56,32,720. Subsequently, the assessee revised his return of income at Rs.77,73,32,230. The case was selected for scrutiny under CASS and other statutory notices were issued to the assessee. The assessee is engaged in the business of software development, IT enabled services and market support services to its group companies.
The assessee had undertaken deemed international transaction in the nature of BPO support services with non-US AE’s and unrelated parties amounting to Rs.25,09,87,512. In this regard, the assessee has filed additional ground as per rule 29 of the Income-tax Rules and as per written synopsis requested that total transaction which consists of 4.42%.
Considering the argument of the Departmental Representative that the margins may be affected because of the geographical risks, the transaction undertaken by the assessee consisting of 4.42% was made in the European countries.
Considering the objections of the Departmental Representative, the lower authorities have not given any findings in regard to margin will affect as per the geographical area.
A Division Bench consisting of N V Vasudevan, President and Laxmi Prasad Sahu, Accountant Member observed that “We accept the prayer of the assessee and MAP rate shall be applied by the AO/TPO for the rest of the transitions of Rs.25,09,87,512 which is 4.42% of the total transactions. Accordingly, the AO is directed to apply the MAP rate on the rest of the transactions for determination of the margin on the international transactions.”
Nageswar Rao, appeared for the assessee and Praveen Karanth, appeared for the Revenue.
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