TaxTMI 
TaxTMI 
2016 (10) TMI 1144
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.... the following grounds: That on the facts and circumstances of the case and in law, 1. the order of the learned AO, based on directions of the Hon'ble DRP, erred in assessing the total income at Rs. 2,86,60,019 as against returned income of NIL computed by the Appellant; Grounds of appeal relating to corporate tax matters 2. On the facts and in the circumstances of the case and in law, based on the directions of the DRP, the learned AO has erred in law and in fact by holding that the foreign currency expenses are towards technical services rendered outside India and should be reduced from "export turnover" while computing the profits eligible for deduction under Section 1O A of the Act. 3. On the facts and I the circumstances of the case and in law, based on the directions of the DRP, the ld. AO has erred in law by no considering that, if the telecommunication expenses (i.e. internet and ISDN service charge) and foreign currency expenses are reduced from export turnover, an equal amount should also be from total turnover for computing the deduction u/s 10 A of the Act. 4. On the facts and in the circumstances of the case and....
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....rred in rejecting certain comparable companies identified by the Appellant where consolidated results had been used for analysis. The Appellant had considered the consolidated results in only those cases where the medical transcription services related income of the Indian operations constituted more than 75 percent of the consolidated company-widel segmental revenues; 10. the learned TPO erred in obtaining information which was not available in public domain by exercising powers u/s 133(6) of the Act and relying on the information for comparability analysis; 11. the learned AOITPO erred by accepting certain companies using unreasonable comparability criteria; 12. the learned AOITPO erred by not providing the Assessee any opportunity of being heard in certain cases and accepting some companies without communicating the reasons thereof; 13. the learned AOITPO erred in not considering the foreign exchange fluctuation gain (loss) as part of the operating income while computing the operating margin; 14. the learned AOITPO erred in not making suitable adjustments on account of differences in the risk profile of the Appellant vis-a-vis the com....
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....ard, he submitted a chart before us and pointed out that the TPO had considered total 28 comparables out of which, the assessee is requesting for exclusion of 13 comparables which are divided in to four separate groups. First such group is of 3 comparables i.e. 1)M/s Bodhtree consulting Ltd.,(Seg.), 2)M/s Eclerx Services Ltd., and 3) Mold Tek Technologies Ltd., (Seg.). Regarding exclusion of this group, he submitted that these companies are functionally different because these companies are performing functions in the nature of KPO and therefore, should be excluded from the list of final comparables. Reliance was placed on the Tribunal order rendered in the case of First Advantage Offshore Services Pvt. Ltd., in IT(TP)A No.1086(Bang.)/2011 dated 30-04-2013, copy available on pages 527 to 564 of the paper book and in particular, our attention was drawn to para-36 & 37 of this Tribunal order which are as under; "36. As far as 3rd group is concerned, the learned counsel for the assessee submitted that this group consists of - 1) Bodhtree Consulting Ltd. 2) Eclerx Services Ltd. 3) Mold Tek Technologies Ltd. 37. According to the learned couns....
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....22.64 Crores whereas the turnover of each of these three companies is more than 10 times of the assessee's turnover and therefore, these companies should be excluded from the list of final comparables, even as per the latest Tribunal orders wherein instead of applying turnover filter of 1- 200 Crores, the turnover filter of 1/10th or 10 times of the turnover of the assessee company is being applied. Thereafter, he submitted that the third group of which exclusion is being requested by the assessee consists of five companies i.e. 1) M/s Vishal Information Technologies Ltd., 2) M/s Informed Technologies India Ltd., 3) M/s Accentia Technologies Ltd., (Seg.), 4) M/s Spanco Ltd., (Seg.) & 5) M/s Asit C Mehta Financial Services Ltd. He submitted that exclusion of this group of five companies is being requested by the assessee on account of employees' cost filter. He placed reliance on the Tribunal order rendered in the case of First Advantage Offshore Services Pvt. Ltd., (Supra) and our attention was drawn to para-35 of this Tribunal order available on page nol.554 of the paper book. Thereafter, he submitted that the assessee is seeking exclusion of one more group of companies consists o....
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.... companies is more than Rs. 200 Crores. Now, the Tribunal is adopting a different turnover filter i.e. those companies are excluded which have turnover less than 1/10th or more than 10 times of the assessee company's turnover. In the present case, these three companies are having turnover in excess of 10 times of the turnover of the assessee company and hence, we direct the AO/TPO to exclude these three companies also from the list of final comparables by applying this turnover filter. 12. Regarding third group consisting of five companies i.e. 1) M/s Vishal Information Technologies Ltd., ,2) Informed Technologies Ltd., 3) Accentia Technologies Ltd., (Seg.) 4) M/s Spanco Ltd., (Seg.) and 5) M/s Asit C Mehta Financial Services Ltd., We find that the exclusion of this group is being requested by applying the employees' cost filter. In para-35 of the same Tribunal order rendered in the case of M/s First Advantage Offshore Services Pvt. Ltd., (Supra), the Tribunal had considered three companies out of these five companies in the present case, i.e. 1) M/s Vishal Information Technologies Ltd., 2) Informed Technologies Ltd., 3) Accentia Technologies Ltd.(Seg.) and it was held by the Tr....