The Delhi High Court has admitted appeal in the case of Headstrong Services India Private Limited Vs Deputy Commissioner of Income Tax and allowed the parties to file additional papers which are part of the assessment record or were filed before the ITAT within eight weeks.

In this appeal the following questions have been framed for determination:

1. Whether Section 92C read with Rule 10 B (l)(e) clause (iii) could be interpreted as permitting adjustment only to profit margin of comparable companies and not that of the tested party.

2. Whether the Tribunal erred in rejecting adjustment to profit margin by considering subsequent period projected profit margins while determining Profit Level Indicator for Appellant's international transaction of software development services.

3. Whether the Tribunal erred in rejecting the applicability of Comparable Uncontrolled Price Method.

4. Whether Tribunal erred in not deleting transfer pricing adjustment on grounds of tax neutrality.

Previously in the matter the Tribunal observed that TPO had computed TP adjustment qua all the transactions carried out by the assessee under 'Provision of software development services' with reference to the base of 'total costs', also inclusive of costs relevant for transactions with non-AEs. The Tribunal vacated the impugned order to this extent and restored the matter to the file of the TPO for recalculating the amount of addition of TP adjustment by taking into consideration the international transactions only under this segment, to the exclusion of transactions with non-AEs. Appeal of the assessee was partly allowed by the Tribunal