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03-06-2019, Amdocs Development, Section 80IA(10), 234B, 41(1), Tribunal Pune

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3 months 2 weeks ago #9650 by amit
Section - 80IA(10), 234B, 41(1), 391, 394, 292
Order Date - 03-06-2019
Favouring - Assessee
Court - Tribunal Pune
Appellant - Amdocs Development Centre India LLP
Respondent - DCIT
Justice - D. KARUNAKARA RAO, AM & VIKAS AWASTHY, JM
Citation - 619Taxpundit66
Appeal No. - ITA No. 376/PUN/2017
Asstt. Year - 2011-12

Order

PER : VIKAS AWASTHY, JM

These cross appeals by the assessee and the Revenue are directed against the order of Commissioner of Income Tax (Appeals)-1, Pune dated 22.11.2016 for the assessment year 2011-12

2. The brief facts of the case as emanating from records are: The assessee is engaged in produ t development as well as marketing, customization, on-going support, warranty services, etc. The assessee during the period relevant to the assessment year under appeal had entered into certain international transactions with ‘Associated Enterprises’. For benchmarking international transactions, reference was made to Transfer Pricing Officer (TPO) u/s.92CA(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The Assessing Officer after receiving the order dated 10.09.2014 from TPO made adjustment in the international transactions as proposed and also made certain other additions/disallowances.

3. Aggrieved against the assessment order dated 27.03.2015, the assessee filed appeal before the Commissioner of Income Tax (Appeals) inter alia challenging validity of assessment order on the ground that it was passed in the name of non-existent entity. The Commissioner of Income Tax (Appeals) vide impugned order dismissed the grounds raised by the assessee challenging validity of assessment order. On the merits of the addition, the Commissioner of Income Tax (Appeals) granted part relief to the assessee. Against the findings of Commissioner of Income Tax (Appeals), both, the assessee and the Revenue are in appeal before Tribunal.

4. The assessee in appeal before the Tribunal has raised three grounds.

Ground No.1 of appeal is against the assessment order made in the name of non-existent entity.

Ground No.2 of appeal is against the adjustment made u/s.10A(7) read with section 80IA(10) of the Act.

Ground No. 3 of the appeal is against levy of interest u/s.234B of the Act.

5. The Department in appeal before the Tribunal has challenged the findings of Commissioner of Income Tax (Appeals) in granting part relief to the assessee by adopting profit margin at 20% instead of 12.95% computed by the Assessing Officer for working of disallowance of excess profit u/s.10A(7) r.w.s. 80IA(10) of the Act. The Department has also assailed the manner of computing deduction u/s.10A of the Act.

6. Before adverting to the merits of the addition, it would be imperative to first decide the legal issue raised by assessee challenging validity of assessment order purportedly made in the name of non-existent entity.

7. Shri P.J. Pardiwalla appearing on behalf of the assessee narrating the sequence of events submitted that the initial name of the assessee-company was “Amdocs Business Services Private Limited”. Thereafter, the said company was merged with “Amdocs Development Centre India Private Limited” w.e.f.1st April, 2012 vide order of Hon'ble Bombay High Court dated 10th May, 2013. The assessee vide communication dated 23rd July, 2013 intimated the Assessing Officer regarding merger of “Amdocs Business Services Private Limited” with “Amdocs Development Centre India Private Limited”. Thus, from the date of merger as per order of the Hon'ble Bombay High Court, “Amdocs Business Services Private Limited” ceases to exist. However, despite an intimation of merger by the assessee to the Assessing Officer, the Assessing Officer issued notice u/s.143(2) of the Act in the name of erstwhile “Amdocs Business Services Private Limited” on 8th August, 2013. The assessee again vide communication dated 17th September, 2013 intimated the Assessing Officer regarding merger of the company. The Assessing Officer without taking notice of the repeated intimations by the assessee finalized the assessment u/s.143(3) r.w.s.92CA of the Act on 27.03.2015 in the name of erstwhile “Amdocs Business Services Private Limited” that was not in existence on the date of finalization of assessment order. The ld. AR submitted that during assessment proceedings, various communications were made by the assessee to Assessing Officer and all the communications were made in the name of “Amdocs Development Centre India Private Limited”. In all such communications, it was specifically mentioned in title that it is a successor of “Amdocs Business Services Private Limited”. The ld. AR referred to one such communication dated 12.03.2015 at page 53 of the paper book.

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