Income Tax Appellate Tribunal Delhi Adobe Software India Pvt. Ltd., Noida vs Assessee on 20 January, 2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'I1', NEW DELHI Before Smt. Diva Singh, JM And Sh. N. K. Saini, AM ITA No. 2454/Del/2013 : Asstt. Year : 200607 Adobe Software India Pvt. Ltd. Vs Joint Commissioner of Income (now amalgamated with Adobe Tax, Range1, Systems India Pvt. Ltd.), Plot No. Noida 11A, City Centre, Sector25A, Noida (U.P)201301 (APPELLANT) (RESPONDENT) PAN No. AACCA2982J Assessee by : Sh. Deepak Chopra & Rohan Khare, Advs. Revenue by : Sh. Amrendra Kumar, CIT DR Date of Hearing : 27.10.2015 Date of Pronouncement : 20.01.2016 ORDER Per N. K. Saini, AM: This is an appeal by the assessee against the order dated 28.03.2013 passed by the AO u/s 143(3)/144C of the Income Tax Act, 1961 (hereinafter referred to as the Act). 2. Following grounds have been raised in this appeal: "1. The order passed by the Joint Commissioner of Income Tax, Range1, Noida ("AO") is bad in law and void abinitio. 2 ITA No. 2454/Del/2013 Adobe Software India Pvt. Ltd. 2. The order of the AO is beyond the limitation vested in the AO under section 153(2A) of the Act and hence barred by limitation. 3. That without prejudice the directions of the Dispute Resolution Panel are also barred by limitation since the same were not passed within the period prescribed under section 144C of the Act and consequently the final assessment order passed is bad in law on this count also. 4. The AO grossly erred in making the assessment on the basis of return of income ("ROI") of Adobe Systems India Pvt. Ltd. and not on the basis of ROI of Adobe Software India Pvt. Ltd. (now amalgamated with Adobe Systems India Pvt. Ltd.) in gross violation of the provisions of section 170 of the Act. 5. That the orders of the AO and the DRP are also erroneous since the original assessment had been made on a company, which was no longer in existence and such defect is not curable under the provisions of section 292B of the Act. 6. The learned AO and TPO have erred in not following the directions issued by the Hon'ble DRP. 7. The order passed by the learned TPO is bad in law and void abinitio as the learned TPO has violated the principal of natural justice by not providing the appellant an opportunity of being heard before giving effect to the DRP's directions. 8. The learned AO/DRP has erred in making an addition of Rs.91,728,060 to the total income of the Appellant on account of adjustment in the arm's 3 ITA No. 2454/Del/2013 Adobe Software India Pvt. Ltd. length price ("ALP") of the international transaction related to software development services entered into by the Appellant with its associated enterprises. 9. The learned AO/DRP has erred by not accepting the economic analysis undertaken by the Appellant in accordance with the provisions of the Act read with the Income Tax Rules, 1961. 10. The learned AO/DRP has erred in: a. Using data for single year i.e. for FY 200506 only instead of multiple year data; and b. Determining the arm's length margin/price using data pertaining only to financial year 200506 which was not available to the assessee at the time of complying with the Transfer Pricing documentation requirements. 11. The learned AO/DRP has erred by rejecting certain comparable companies identified by the assessee using turnover less than Rs. 1 Crore as a comparability criterion. 12a. The learned AO/DRP has erred by rejecting certain comparable companies identified by the assessee for having different accounting year (i.e. companies having accounting year other than March 31 or companies whose financial statements were for a period other than 12 months). 12b. Without prejudice, certain companies proposed as comparable by the learned AO do not pass the different financial year end filter proposed by the learned AO. 4 ITA No. 2454/Del/2013 Adobe Software India Pvt. Ltd. 13a. The learned AO/DRP has erred in rejecting certain comparable companies identified by the Appellant on the ground that they do not meet the filter of employee cost greater than 25 per cent of the total cost. 14a. The learned AO/DRP has erred by rejecting certain comparable companies identified by the assessee as having economic performance contrary to the industry behavior (e.g companies which showed a diminishing revenue trend). 14b. Without prejudice, certain companies proposed as comparable by the learned AO do not pass the diminishing revenue filter proposed by