ITAT dismisses appeal, excludes Infosys Ltd. as comparable for transfer pricing. Other comparables left open for future assessment.

The ITAT dismissed the appeal, upholding the exclusion of Infosys Ltd. as a comparable for transfer pricing analysis. The issue of other comparables was considered academic, with their comparability left open for future assessment years.

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Issues involved:
The core issue pertains to the rejection of certain comparables, specifically Infosys Ltd., for transfer pricing analysis.

Issue 1: Comparability of Infosys Ltd.
The assessee, engaged in software development services, benchmarked its international transactions using TNMM. The TPO rejected some comparables, including Infosys Ltd., resulting in a transfer pricing adjustment. The CIT(A) upheld the exclusion of Infosys Ltd. based on previous tribunal decisions and the company's characteristics such as high turnover, diversified operations, and intangible assets. The ITAT affirmed the CIT(A)'s decision, noting consistent exclusion of Infosys Ltd. in prior assessments.

Issue 2: Other comparables disputed by the Revenue
The assessee argued that rejecting Infosys Ltd. alone would keep its margin within tolerance range. The ITAT agreed with this submission, rendering the issue of taxability of other comparables academic. The ITAT left the question of comparability of these other disputed comparables open for future consideration if disputes arise in subsequent assessment years.

Conclusion:
The ITAT dismissed the appeal, upholding the exclusion of Infosys Ltd. as a comparable based on past decisions and the company's characteristics. The issue of other comparables was deemed academic, with their comparability left open for future assessment years.

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