TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 1213
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....., Sasken Communication Technologies Ltd., Tata Elxsi Ltd. and Wipro Ltd. as com parables. 2.The learned CIT(A), in the facts and circumstances of the case, erred in excluding the comparable company M/s. Celestial Biolabs Ltd. on the basis of high profit margin. 3.The Ld. CIT (A) erred in rejecting the diminishing revenue filter used by the TPO to exclude companies that do not reflect the normal industry trend. 4. The Ld. CIT(A) erre1 in not appreciating that the different year ending filter applied by the TPO is necessary to exclude companies which do not have the same or comparable financial cycle as the tested party. 5. The Ld. CIT(A) erred, in rejecting the employee cost filter applied by the TPO to select companies which are predominantly into software development services and thereby including !MIs Indus Networks ltd as a comparable. 6. The learned CIT(A), i~ the facts and circumstances of the case, erred in holding that M/s. Avani Cincom Technologies, cannot be taken as a comparable. 7.The learned CIT(A), in the facts and circumstances of the case, erred in holding that M/s. Bodhtree Consulting Ltd. being functionally different, cannot be taken as a comparable. ....
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....ding the rejection of the Respondent's TP documentation on the basis that the data used in the computation of the arm's length price was not reliable. 2. That the learned CIT(A) erred in upholding the learned TPO's approach of using data as at the time of assessment proceedings, instead of that available as on the date of preparing the TP documentation for comparable companies while determining the arm's length price, ignoring the fact that this data was not available to the Respondent at the time of complying with the TP documentation requirements. 3. That the learned CIT(A) erred in upholding the learned TPO's approach of disregarding application of multiple year/prior year data as used by the Respondent in the TP documentation and holding that current year (i.e. Financial Year 2007-08) data for companies should be used for comparability. 4.That the learned CIT(A) erred in upholding the learned TPO's approach of collecting selective information of the companies by exercising powers granted to him under section 133(6) of the Act that was not available to the Respondent in the public domain and relying on the same for comparability purposes. 5. That ....
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....Limited on the ground that it had a negative operating margin. 14. That the learned CIT(A) has erred in upholding the learned TPO's approach of not considering the one- time adjustment made under AS-IS with respect to valuation of leave encashment and long term service benefit in arriving at the operating profit margin of the Respondent. 15. That the learned CIT(A) erred in upholding the learned TPO's approach of not considering the recovery of payment of FBT made on behalf of the AEs in arriving at the operating margin of the Respondent. 16. That the contention of the learned AO is bad in law and on facts while stating that the deletion of the addition on account of adjustments in arm's length price of the international transactions are not base on correct facts and circumstances and established principals of law and procedures in this regard. That the Respondent craves leave to add to and/or to alter, amend, rescind, modify the grounds herein above or produce further documents before or at the time of hearing of this appeal". 4. The ld. DR of the revenue supported the assessment order whereas the ld. AR of the assessee supported the order of the ld. CIT(A) in con....
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....nd the turnover of the assessee company is Rs. 90.00 Crores approximately and therefore, the turnover of this company is less than 1/10th of the turnover of the assessee company. Hence, by applying this turnover filter of 1/10th or 10 times of the turnover of the assessee company, this company is to be excluded from the list of final comparables. We uphold the order of the ld. CIT(A) regarding this comparable. 9. The second comparable is M/s Bodhtree Consulting Ltd. This company was excluded by the ld. CIT(A) on this basis that services provided are in the nature of ITES and no break-up of segmental data is available and also for this reason that this is functionally different and we find that exclusion of this company is squarely covered in favour of the assessee by the Tribunal order rendered in the case of GXS India Technology Centre Pvt.Ltd. Vs ITO in IT(TP)A No.1444/Bang/2012 dated 31-07-2015 for the same assessment year 2008-09, copy of which is available on pages 38 to 86 of the case laws paper book. Respectfully following this Tribunal order, we decline to interfere in the order of the ld. CIT(A) about exclusion of this comparable. . 10. The third comparable as per the ch....
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....The Ninth comparable as the chart is M/s LGS Global Ltd. this comparable was retained by the ld.CIT(A) and we find no reason to interfere with the order of the ld. CIT(A) regarding this comparable. 17. The tenth comparable as per the chart is M/s Mindtree Ltd.(Seg.). The ld. AR of the assessee fairly conceded that this company has to be included in the final list of comparable because this company was excluded by the ld.CIT(A) by applying turnover filter of Rs. 200 Crores. But if we apply the turnover filter of 10 times of the turnover of the assessee company, this company is a good comparable. Accordingly, we reverse the order of the ld. CIT(A) regarding exclusion of this company and direct the TPO/AO to include this company in the list of final comparables. 18. The eleventh comparable in the chart is M/s Persistent Systems Ltd. As per the chart, the ld. AR of the assessee submitted that that the ld. CIT(A) excluded this company by applying the turnover filter of Rs. 200 Crores but turnover of this company at Rs. 383.41 Cores is less than 10 times of the assessee company's turnover and therefore, by applying this turnover filter, this company cannot be excluded but this company ....