TaxTMI 
TaxTMI 
2015 (8) TMI 3
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....ess of software development and its export. The issue that arises for our consideration is the transfer pricing adjustment made by the A.O. 3. The grounds raised by the assessee are as follows. "That on the facts and circumstances of the case, and in law; 1. The assessment order passed by the Ld. AO in partial pursuance to the directions issued by the Hon'ble DRP is a vitiated order as the Hon'ble DRP erred both on facts and in law in confirming of the Transfer Pricing ('TP') additions made by the Ld. AO / Ld. Additional Commissioner of Income Tax, Transfer Pricing Officer, Noida ('Ld. TPO). 1.1. That the assessment order passed by the Ld. AO is bad in law in as much as the same was passed in complete disrega....
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....Length price (ALP') of the international transaction pertaining to software development services in compliance with section 92D of the Act read with Rule 10 D of the Income-tax Rules, 1962 ('Rules') in the Transfer Pricing ('TP') documentation; 5.2 by disregarding multiple year/ prior years' data as used by the Appellant in the TP documentation and holding that current year (i.e. FY 2009-10) data for comparable companies should be used despite the fact that the same was not necessarily available to the Appellant at the time of preparing its TP documentation; 5.3 by rejecting comparability analysis in the TP documentation/Fresh search and in conducting a fresh comparability analysis based on application of the foll....
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....cost plus basis, undertakes minimal business risks as against comparable companies that are full-fledged risk taking entrepreneurs, and by not allowing a risk adjustment to the Appellant on account of this fact; and 5.8 by disregarding judicial pronouncements in India while computing an adjustment to the transfer price of the international transaction entered into by the Appellant. 5.9 The Ld. AO has erred by not limiting the amount of adjustment to the lower end of the arithmetic mean as envisaged under second proviso to section 92C sub section 2 of the Act. 6. That the learned AO, on the facts and in the circumstances of the case and in law, has erred in levying an interest u/s 234A, B C & D of the Act. 7. Ignoring the fact th....
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....The issue about exclusion of above list of comparables while making the TP adjustments in assessees case has been settled by Hon'ble Delhi High court. It has been unequivocally held that those companies ( like Infosys and others) are full fledged risk bearing companies and are functionally dissimilar as a comparable to assessee who is a captive software service provider by following observations: "8. It is a common case that Satyam Computer Services Ltd. should not be taken into consideration. The Tribunal for valid and good reasons has pointed out that Infosys Tchnologies Ltd. cannot be taken as a comparable in the present case. This leaves L&T Infotech Ltd. which gives us the figure of 11.11%, which is less than the figure of 17% m....