IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER ITA No.2586/Bang/2024 Assessment Year: 2021-22 MMSH Clinical Research Pvt. Ltd.

2/1, Dr. Rajkumar Road Rajaji Nagar DCIT Bengaluru 560 010 Vs. Circle 2(2)(1)

Karnataka Bengaluru PAN NO : AAFCM3316D APPELLANT RESPONDENT Appellant by : Sri Vibhor Ghai V.G., A.R.

Respondent by : Dr. K.J. Divya, D.R. Date of Hearing : 12.06.2025 Date of Pronouncement : 30.06.2025

O R D E R

PER PRAKASH CHAND YADAV, JUDICIAL MEMBER:

Present appeal of the assessee is arising from the order of ld. AO dated 29.10.2024 and relates to assessment year 2021-22.

2. Brief facts of the case as coming out from the order of the authorities below are that the assessee Company, primarily engaged in rendering back end support services with writing task (Medical writing) and quality checks along with programming effort to the customers residing in U.S. and Europe. For the impugned assessment year, it has filed its return of income on 3.6.2022 declaring total income of Rs.65,87,390/-. The case of the assessee was selected for scrutiny as there were international transactions reported in Form 3CEB, a reference was made to the ld. TPO after obtaining approval of the appropriate authority. The TPO passed order u/s 92CA(3) of the Act on 28.10.2023, whereby the ld. TPO has proposed an adjustment of Rs.5,04,48,986/-. Thereafter, the AO passed draft assessment order on 5.12.2023 making the adjustment proposed by the ld. TPO.

3. Aggrieved with the order of TPO, assessee filed its objection before ld. DRP and the ld. DRP after considering the objections of the assessee passed an order on 23.9.2024. Thereafter, the AO passed the final order on 29.10.2024. Here it is pertinent to mention that the ld. DRP, without granting any relief to the assessee, has affirmed the adjustments made by the TPO.

4. Aggrieved with the order of the ld. DRP, the assessee has come up in appeal before us. The assessee vide application dated 11.6.2025 has also filed an application for the admission of additional evidences, which basically contains the annual reports of certain comparable companies that were selected by the TPO for the purpose of computing the Arm’s Length Price. It is the submission of the ld. Counsel for the assessee that these evidences goes to the root of the matter and hence may be admitted in the interest of justice.

5. Ld. D.R. could not object to the prayer of the assessee. However, requested that the matter may be restored to the file of TPO for computing the ALP afresh.

-: Finding of the Bench:-

6. After considering the rival submissions, we are of the view that all these evidences goes to the root of the mater therefore, required to be admitted for adjudicating the matter. Further the issue whether the same are to be restored to the file of TPO or not would be dealt in subsequent paragraphs.

7. The assessee has raised following grounds of appeal:

1. “That the reference made by the Ld. Assessing Officer ('AO') to the Transfer Pricing Officer ('TPO') under section 92CA of the Income-tax Act, 1961 ('the Act') is void ab initio and bad in law, as the AO has not recorded any reasons in the order passed under section 143(3) of the Act read with section 144C of the Act, based on which the AO concluded that it was 'expedient and necessary' to refer the matter to the TPO for computation of Arm's Length Price ('ALP'), as is required under section

92CA (l ) of the Act.

2. The Ld. AO / Ld. TPO erred in fact and in law by disregarding the working capital adjustment proposed by the Assessee, which is critical for ensuring a fair and accurate determination of the arm's length price thus making an addition of Rs. 5,04,48,986.

3. The Ld. AO / Ld. TPO erred in rejecting the filters applied by the Assessee in the transfer pricing documentation and arbitrarily applying additional filters, leading to the exclusion of appropriate comparable companies and thus maki