TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 1193
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....ief to the assessee. 2. Whether on the facts and in the circumstances of the case, the Hon'ble DRP was justified in rejecting companies on the ground of functional difference when the taxpayer has not considered the verticals & horizontals (categorizing companies into BPO and KPO of the ITES sector while selecting the comparables. The TPO has also not gone into the verticals / horizontals of the comparable companies. The DRP failed to coinsider that the main search strategy of the taxpayer as well as the TPO has been to identify the companies which are engaged in the ITES. 3. Whether on the facts and in the circumstances of the case, the Hon'ble DRP was justified in rejecting Infosys BPO on ground of High turnover and brand value since ....
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....the companies that are appropriate comparables. Therefore, he rejected the TP study and conducted an independent analysis using TNMM and arrived at ALP for ITES segment at 21.99%and proposed the adjustment of Rs. 2,33,48,502/-. The TPO has arrived at 13 companies as comparable to the assessee-company. Assessee objected to the said companies but, the assessee's objections were rejected by the TPO by holding that the assessee is also a KPO (Knowledge Process Outsourcing). Aggrieved, assessee preferred objections before the DRP, who granted relief to the assessee by directing the following companies to be excluded from the final list of companies i.e., (1) Accentia Technologies Limited (Accentia); (2) Acropetal Technologies Limited (Acropetal)....
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..... In view of the above statement of the Ld Counsel for the assessee, we direct the AO to consider this company as comparable to the assessee by adopting the correct margin of the said company. Thus, Ground no.4 is considered as allowed for statistical purposes. 5. As regards Grounds no.2, against the exclusion of the 5 companies from the final list of comparables, we find that the main objection of the Revenue is that the assessee is also a high end KPO service provider and therefore, the other companies which are also KPO companies ought not to have been directed to be excluded. In reply to the arguments of the Ld DR, Ld Counsel for the assessee submitted that the TPO himself has considered the assessee to be engaged in IT Enable Services....
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....rx Services Limited:- This company is engaged in providing KPO services and the comparability of company to ITES companies has been considered by various Benches of ITAT i.e., Hyderabad and Bengalore, wherein, on similar set of facts, this company was directed to be excluded. The Hon'ble Delhi High Court in the case of Rampgreen Solutions Pvt Ltd (ITA No. 102/2015) has also directed for exclusion of this company. (4) TCS e-Service Limited:- From the annual report of this company, it is seen that this company provides technical services involving software testing, verification and validation of software at the time of implementation and data centre service management activities, which makes the company functionally different from the servic....
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.... and directed the AO to take into consideration the average prime lending rate of SBI for computing the working capital adjustments. While the Ld DR supported the order of the TPO, the Ld Counsel for the assessee placed reliance on the decision of "B" Bench of the ITAT, Pune in the case of Income Tax Officer vs. Nevis Network (India) (P.) Ltd [2015] 55 taxmann.com 519 (Pune - Trib), wherein it was held that the Prime Lending Rate (PLR) is be to be adopted for computing the interest on receivables. 8. Having considered the rival contentions and the relevant material on record, we find that the Tribunal at Pune in the case of Income Tax Officer vs. Nevis Network (India) (P.) Ltd (supra) has considered the issue at length and at para 11 of it....