TaxTMI 
TaxTMI 
TaxTMI 
2018 (7) TMI 473
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....tion prescribed under the provisions of Section 10A? (2) Whether on the facts and in the circumstances the Tribunal is right in directing the Transfer Pricing Officer to exclude the companies as comparables namely, Bodhtree Consulting Ltd. Exensys Software Solutions Ltd. Sankhya Infotech Ltd. Foursoft Ltd., Thirdware Solutions Ltd. Tata Elxi Ltd. Infosys Technologies Ltd. Flextronics Ltd. and Geometric Software Solutions company Ltd. even when the TPO has chosen the said comparables as all the required tests are satisfied? (3) Whether on the facts and in the circumstances of the case, the Tribunal is rejecting the comparables chosen by TPO by not appreciating specific information collected under Section 133(6) of the I.T. Act from companies chosen as comparables by TPO and ignoring that the principle that comparability of the comparables depends in transfer pricing on assessee specific FAR analysis and specific facts brought out on record by the TPO in the case of the assessee?" 3. The learned counsel for the appellants- Revenue, Mr. E.I. Sanmathi, by way of a Memo has proposed an additional substantial question of law, which is quoted below for ready r....
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.... was introduced to give effect to the Exim Policy, the supplies made from one STP to another STP has to be treated as 'deemed export' because Clause 6.19 specifically provides for export through Status Holder. It provides that an EOU/EHTP/STP/BTP unit may export goods manufactured/software developed by it through other exporter or Status holder recognized under this policy or any other EOU/EHTP/STP/BTP unit. What follows from this provision is that to be eligible for exemption from payment of income tax, export should earn foreign exchange. It does not mean that the undertaking should personally export goods manufactured / software developed by it outside the country. It may export out of India by itself or export out of India through any other STP Unit. Once the goods manufactured by the assessee is shown to have been exported out of India either by the assessee or by another STP Unit and foreign exchange is directly attributable to such export, then Section 10A of the Act is attracted and such exporter is entitled to benefit of deduction of such profits and gains derived from such export from payment of income tax. Therefore, ....
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....es excluded from export turnover have to be excluded from total turnover also. Otherwise, any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well". 7. In so far as the second substantial question of law is concerned, the learned ITAT in its Order dated 18/03/2016 has given the following findings, the relevant portion of which is quoted below for ready reference:- "Satyam Computers Ltd: 10.1. Out of the above comparables, Satyam Computer Services Ltd. was excluded by CIT(A) on the basis of non-reliability of financial data. Revenue has accepted the same and has not contested. So, the said company has been rightly excluded. Infosys Technologies Ltd.. Exensys Software Solutions Ltd." 10.2. Ld.CIT(A) has excluded Infosys and Exensys, on the basis of functional dissimilarity and having extraordinary event during the year Exensys was having extraordinary profits by way of amalgamation of companies during the year. Infosys was excluded having different functionality of products, having high turnover and brand name. Following the decision of Agnity Techno....
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....es is as under: 10.6. ... ... ... Four Soft Ltd. 10.7. The objection by Assessee is that this company is a product company was analysed and accepted in the case of ITO Vs. M/s. Sunquest Information Systems (India) Private Limited, in IT (TP)A No.1302/Bang/2011 dt.11-06-2015 (supra)para 22. It was held that the said company has derived income from software license and AMCs. Since functionality was already analysed, respectfully following the Co-ordinate Benches also, the same was to be excluded. i. Intoto Software India Pvt. Ltd. ITA No.1196/Hyd/2010; ii. Cordys Software India P. Ltd. ITA No.1451/Hyd/2010 Geometric Software Solutions Company Ltd. 10.8. Even though this company was accepted as comparable in ITO Vs. M/s. Sunquest Information Systems (India) Private Limited, in IT(TP) A No.1302/Bang/2011 dt.11-06-2015 (supra) and Cordys Software India P.Ltd. in ITA No.1451/Hyd/2010 dt.13- 06-2014 (supra) and was not objected to, we find that the Co-ordinate Bench at Banalore in the case of DCIT Vs. Toshiba embedded Software (I) Pvt.Ltd. in IT (TP) A No.1/Bang/2012 dt.10-05-2013 has considered that this is in product development. We have perused the TPO's....
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....ed proviso, as interpreted by various authorities does permit standard deduction of (+) or (-) 5% to Assessee. The order of Ld.CIT(A) is confirmed. The revenue's ground is rejected accordingly." 9. However, this Court in a recent judgment in I.T.A.No.536/2015 c/w. I.T.A.No.537/2015 (Pr. Commissioner of Income Tax, Bangalore and Another Vs. M/s. Softbrands India P. Ltd.,) rendered on 25-06-2018, has held that in these type of cases, unless an ex-facie perversity in the findings of the learned Income Tax Appellate Tribunal is established by the appellant, the appeal at the instance of an assessee or the Revenue under Section 260-A of the Act is not maintainable and the relevant portion of the said judgment is quoted below for ready reference: "Conclusion: 55. A substantial quantum of international trade and transactions depends upon the fair and quick judicial dispensation in such cases. Had it been a case of substantial question of interpretation of provisions of Double Taxation Avoidance Treaties (DTAA), interpretation of provisions of the Income Tax Act or Overriding Effect of the Treaties over the Domestic Legislations or the questions like Treaty Shopping, Base ....