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of <h1>Tribunal Upholds DRP's Decision, Dismisses Revenue Appeal, Citing Business Model Differences and Judicial Precedents.</h1> <h3>Asst. Commissioner of Income Tax, Circle 16 (2), Hyderabad. Versus M/s. Parexel International (India) Pvt. Ltd.</h3> Asst. Commissioner of Income Tax, Circle 16 (2), Hyderabad. Versus M/s. Parexel International (India) Pvt. Ltd. - TMI Issues Involved:1. Appeal against ACIT's assessment order under Section 144C(5) of the Income Tax Act, 1961.2. Transfer Pricing Officer's exclusion of comparable entities leading to arm's length price adjustment.3. Dispute Resolution Panel's directions regarding exclusion of certain comparables.4. Revenue's challenge of DRP's directions.5. Assessee's defense of DRP's directions.6. Tribunal's analysis of comparables and judicial precedents.7. Decision on Revenue's appeal and assessee's cross-objection.Analysis:1. The appeal and cross-objection arose against the ACIT's assessment order under Section 144C(5) of the Income Tax Act, 1961, based on the directions of the Dispute Resolution Panel-1 in Bangalore.2. The main issue revolved around the Transfer Pricing Officer's exclusion of eight out of thirteen comparable entities, resulting in a reduction of the arm's length price adjustment by Rs.4,64,59,132. The Revenue contended that the DRP erred in law by excluding these entities.3. The Revenue challenged the DRP's directions to exclude entities such as M/s. Acropetal Technologies Ltd., Cosmic Global Ltd., Eclerx Services Ltd., Infosys BPO, Informed Technologies Ltd., Jeevan Scientific Technologies Ltd., Mastiff Tech P. Ltd., and TCS E-serve Ltd. from the list of comparables.4. The assessee supported the DRP's directions and provided extensive documentation on each comparable entity along with relevant judicial precedents.5. The Tribunal analyzed the facts and found no merit in the Revenue's grievance. It noted that certain entities had already been excluded in a previous assessment year due to different business models and functional dissimilarities. The Tribunal also found flaws in the remaining comparables based on turnover filters and profit margins.6. The Tribunal considered various factors such as revenue filters, turnover, profit margins, and business models to support the exclusion of certain comparables. It highlighted the importance of judicial precedents in making its decision and rejected the Revenue's substantive grievance and appeal.7. The Tribunal dismissed the Revenue's appeal and the assessee's cross-objection as rendered infructuous due to the decision on the main appeal.Overall, the Tribunal's detailed analysis of the comparables, along with reference to judicial precedents, led to the dismissal of the Revenue's appeal and the assessee's cross-objection. The decision was based on a thorough examination of the facts and legal aspects involved in the case.
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