Recently, the ITAT Delhi Bench , in the case GE Energy Parts Inc.  Vs.  Addl. Director of Income-tax (ITAT Delhi), ITA No. 671/Del/2011, Dated: 04-07-2014, accepted Linkedin Profile as additional evidence produced before them by the Department.

Vide letter dated 14.11.2008, the AO asked the assessee to provide information and state, whether any support services were provided by any entity in India, if yes, to provide copy of agreement, details of year wise payment, names of employees of the entity working for the assessee and the nature of services provided by such person. It also asked to state whether such persons were in any way connected with the negotiation of prices or in the finalization of contracts/purchase orders.

In regard to this query, the assessee vide letter dated 23.12.2008 submitted their clarification wherein nature of support services provided by GEIIPL was explained in detail. Furthermore, as required by your Honour details of employees of GEIIPL who were providing such services were also provided. Details relating to financial years 2003-04 to 2005-06 were enclosed. The AO commented on this part submission information and stated that the assessee did not provide information for assessment years 2001-02 to 2003-04. Additionally, it did not provide information that which employee is working for which entity. It did not provide information on year wise payments made by all overseas entities to GEIIPL. As discussed elsewhere, GEIIPL has also not identified any of the overseas entity in its transfer pricing documentation other than GEIOC.

With reference to above specific information, called for by the assessing officer, ld. CIT(DR) submitted that for proper adjudication of the issue it is necessary that the entire information regarding employees be available before the ITAT.

Ld. CIT(DR) further submitted that Linkedin profile contains information on person’s education, details of employment, a summary of person’s job profile/ experience etc.Ld. CIT(DR) pointed out that these informations are necessary to dislodge the assessee’s claim that such employees are worth nothing and they act as a communication channel only and perform very limited functions as mentioned in the agreement between GEIIPL and GEIOC. He pointed out that these Linkedin profile establish that these individuals are very highly qualified, they have international experience, they have worked 12 at high positions in the GE in India and outside India and they were responsible for sale of GE products in India. He submitted that the Linkedin profile also shows with which they were working.

It further stated that the basic ingredient for exercising powers under Rule 29 for admission of additional evidence is that Tribunal should come to the conclusion that a particular document would be necessary for consideration to enable it to pass orders or for any other substantial cause. The document can be brought to the notice of Tribunal by either party. The Tribunal is final fact finding body and, therefore, the powers have been conferred on it u/s 131 and Rule 29 to enable it to record a factual finding after considering the entire evidence. For dispensation of justice wide powers have been given to Tribunal.

CIT(DR) pointed out that the information in the Linkedin profile cannot be said to be hearsay. The information in the Linkedin profile is neither false nor modest. Under such circumstances there is no harm in relying on the information contained in the Linkedin profile so far as it relates to education, experience, employment profile and also nature of job performed by persons.CIT(DR) further pointed out that on account of non production of documents and relevant information, the assessing officer could not carry out the correct analysis for the purpose of determination of ALP and, therefore, the assessee’s one of the alternate claim that the payment had been made at arm’s length to different entities cannot be verified. He submitted that for computing the arm’s length price comparison with a realistic and correct data is to be carried out which had not been done by the assessee. For proper analysis all the functions performed by persons it is necessary that details regarding functions carried out by employees are available on record for which Linkedin profile will be very useful.

 

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