TaxTMI 
TaxTMI 
2015 (4) TMI 911
X X X X Extracts X X X X
X X X X Extracts X X X X
....International Transactions of Provision of IT Enabled Services. 2.1 Briefly stated the facts of the case are that the assessee is in the business of providing Information Technology Enabled Services and operations and back end operations. The return of income for the year under consideration was filed by the assessee declaring the total income of Rs. 19,92,500/-. The return was selected for scrutiny assessment. The assessee is registered under the Software Technology Parks of India Scheme. The assessee company is a captive unit of the Paternoster Group in India and performs a broad range of back end operations for Paternoster UK Limited, which includes actuarial finance and information technology support operation. 3. While scrutinizi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed updated margins of the comparable companies. The mean average of which worked out at 12.42%. The TPO noticed that search process of the assessee does not capture many market players close to the functions of the company. Secondly, as this industry segment is having very positive growth including the assessee, the inclusion of the heavy loss making companies does not reflect the actual scenario prevailing. 4. The TPO undertook fresh search on Capitaline Plus and Prowess Databases.The TPO listed 21 comparables. The average of which was determined at 29.25%. The assessee was asked to show cause as to why the Arm's Length Mark up may not be held to be 29.25% for provision of IT services. The assessee replied that the comparables selected ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 2.20% 24 vCustomer Serices India Private Limited 11.62% 25 Vishal Information technologies Ltd 51.79% Average 27.8% The average was determined at 27.8%. (1) While using these comparables, the important filters applied by the TPO were (1) use of relevant Financial Year Data; (2) the companies with the turnover of less than Rs. 1 crore were rejected; (3) the companies having more than 75% of the operating revenue from ITES have been selected; (4) Companies with less than 75% earning from export were rejected; (5) companies having more than 25% of related party transactions were rejected. 5. The assessee strongly raised objections before the Dispute Resolution Panel (DRP). The main obje....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ces Ltd as per the audit report of this company exhibited at page 258 to 337 and in particular page 273, it is noticed that Eclerx Services Ltd had acquired UK based Igentica Travel Solutions Limited (ITS) on 27.7.2007. It is stated that this acquisition is consistent with company's strategy of looking for inorganic growth via "bolt on" acquisitions which fit well with the existing strengths of the company. The ITS has provided the company with a set of 28 large customers, primarily in Europe, this strengthening the company's presence in that geography. It has also given the company an entry platform into a new vertical-travel and hospitality, besides consolidating the company's position in the retail and manufacturing space. 7. In our c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the scheme of arrangement involving amalgamation between Tech-men Tools Private Limited (TTPL), which is the Transferor Company and Mold/Tek Technologies Limited(MTL), which is the Transferred company and the demerger between MTL, the demerged company and Moldtek Plastic Limited (MPL) has sanction of the Hon'ble Andhra Pradesh High Court. The appointed date for amalgamation and the demerger were 1.10.2006, and 1.4.2007 respectively. The business and the assets and liabilities of Tech-men Tools Private Limited stand transferred to and vested in Mold Tek Technologies Limited w.e.f.1.10.2006. In our considered opinion, this is definitely an extraordinary event which make this company excluded from final list of comparables on similar lines a....