By Geeta Jani, Dhishat B. Mehta
Chartered Accountants
TS-346-ITAT-2017(Bang)-TP
Insilca Semiconductors India Pvt. Ltd vs. ITO
A.Y.: 2007-08, Date of Order: 15th March, 2017
Facts
Taxpayer was an Indian company.
During the course of assessment proceedings, TPO made certain transfer pricing
adjustments in relation to income from software development services. Taxpayer
contended that the charging provisions u/ss. 4 and 5 do not refer to Chapter X
dealing with transfer pricing provisions. Hence, any addition made under
Chapter X cannot be subjected to tax under the Act.
However, AO rejected the contentions of the Taxpayer.
Aggrieved by the order of AO, Taxpayer appealed before the CIT(A) who upheld
the order of AO. Subsequently, Taxpayer appealed before the Tribunal.
Held
– Section
4 of the Act levies tax on Total Income. Further, section 5 of the Act
provides that total income includes all income received or deemed to be
received in India or accrues or arises or is deemed to accrue or arise in India
or income accrues or arises to him outside India.
– Income under consideration is taxable in
India as the same is falling within the scope of sections 4 and 5 of the Act. Moreover, income is to be
computed after deducting various expenses incurred for earning taxable revenue.
– Chapter X provides the manner of computation
of income from international transaction. No dispute can be raised about
applicability of Chapter X in computing the total income, unless the
international transaction in respect of which addition is made is exempt from
tax.
– Section 5 provides that total income is to be
computed subject to the provisions of this Act. Hence the total income u/s. 5
is inclusive of various incomes. Chapter X is part of the Act. Therefore, the
same has to be applied wherever applicable. Accordingly, the contention that
income computed under Chapter X is not taxable under the Act is not tenable.
