2014 (12) TMI 337

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..... 1.2 and 1.3 independently. The Tribunal held that the decision of the Tribunal for A.Y. 2004-05 holds good. 3. By M.A. No. 46/Hyd/2013 the applicant submitted that the grounds 1.2 and 1.3 are as follows: 1.2 The learned CIT(A) as well as learned AO/TPO have erred in selecting and using certain companies as comparables to determine the arm's length price (ALP) by not appreciating the fact that the comparable companies selected are not comparables to the appellant and hence, cannot be used in the instant case. 1.3 Both the learned CIT(A) and as well as AO/TPO erred in rejecting the loss making comparables, in violation of OECD guidelines, instead, summarily without any basis concluded that the comparables shall be of those comp....

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.... some of the comparables to the list of comparables proposed by the TPO. During the course of passing the consequential order, the assessee was given an opportunity. In response to the same the assessee filed its reply on 28.02.2013. It was stated in the consequential order that the companies i) Allsec Technologies Limited, ii) Nucleus Netsoft & GIS (India) Ltd and iii) Maple Esolutions Limited be excluded in view of the findings of the ITAT for the A.Y. 2004-05 that super profit companies need to be excluded. The contention of the assessee was not accepted by the TPO-II on the reason that in A.Y. 2004-05 the ITAT has specifically deleted Ultramarine & Pigment Limited being super profit company, but nowhere it laid down as to what consti....

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....e ITAT in its order dated 26.11.2012 had not laid down any criteria for deletion of the same: S. No. Name of the comparable PLI% (OP/OC%) 1. Allsec Technologies Ltd. 29.85 2. Saffron Global Ltd. 24.88 3. Tulsyan Technologies Ltd. 17.02 4. Transworks Information Services Ltd. 2.81 5. Maple Esolutions Ltd. 28.75 6. Nucleus Net Soft & GIS India Ltd. 40.06 7. Ace Software Exports Ltd. 14.50 11. The learned counsel submitted that out of the above comparables item No. 3 i.e., Tulsyan Technologies Ltd., was not considered as comparable for the reason that it was noticed from the annual accounts that the company outsourced a considerable portion of the business. The learned counsel relied on the de....

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.... International Services P. Ltd. (supra), it is held with reference to this company as under- "18. We are unable to uphold the contention raised by the learned Departmental Representative. It is apparent from two orders passed - one by the Delhi Bench and the other by the Hyderabad Bench of the Tribunal - that the case of Maple eSolutions Limited has been directed to be excluded from the list of comparables. As the assessment year under consideration is 2006-2007 and the Delhi Bench of the Tribunal has also considered the same assessment year while directing the exclusion of the case of Maple e Solutions Limited from the list of comparables, we are unable to accept the contention of the ld. DR in this regard. It is more so because no cont....

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....udicature of Bombay, on 22.2.2006 and in view of amalgamation, the financials have changed and the business model also changed. Referring to the annual report placed on record, it was submitted that as against Rs. 24.02 lakhs of employee costs for the year ending 31st March, 2005, the employee cost has increased to Rs. 132.59 lakhs. Further, the data processing charges is also to the extent of Rs. 1.04 crores, which indicates that the assessee is outsourcing the work. Accordingly, it cannot be selected as a comparable. Due to amalgamation during the year, the assessee's business model has changed and because of employee cost filter also, this comparable has to be excluded." 17. We have gone through the objections filed by the assesse....