TaxTMI 
TaxTMI 
2014 (9) TMI 1163
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.... therefore, the same are dismissed in limine. Grounds No.1 to 4 are general in nature. Now, the effective grounds which remain for consideration in this appeal are grounds No.5, 8, 9 & 10, which relate to the TP addition made by the AO. 3. Rival contentions have been heard and record perused. Facts in brief are that the assessee is engaged in software development/export and IT enabled services. The total receipts for the year has been shown at Rs. 278.50 crores as against Rs. 172.35 crores in the preceding year. Besides the assessee has shown other income of Rs. 223.59 lakhs as against Rs. 178.38 Iakhs in the preceding year. The assessee has claimed expenses of Rs. 234.24 crores as against Rs. 133.99 crores in the preceding year. The net....
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.... and reasoning given by the TPO is as under :- Sl .No Name of the Company Margin per TP report (%) Remarks/reasons for non-comparability as per TPO 1. Akshay Software Technology Limited 6.60 The company is a predominantly onsite company. It fails the onsite revenue filter as 100% of its revenues are from onsite operations. Thus the company is not considered as a comparable. 2. Azlecsoft Limited 18.16 Export earnings are only to the extent of 25% of revenue. It fails export earning filter. 3. Goldstone Technologies Limited 11.50 As per the information available in the AR, the exports (in terms of foreign exchange earnings) constitute only 2.97% of the revenues. As per the information available ....
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..... Melstar information Technologies Limited 3.46 The assessee itself withdrew it as a comparable based on the updated margins 11. Mindtree Limited (Segmental) 16.98 Updated margin 17.51 12. Persistent Systems Private Limited 24.34 The assessee itself withdrew it as a comparable but chosen by the TPO 13. Quintegra Solutions Limited 15.18 Updated margin 21.48 14. RS Software (India) limited 14.11 Updated margin 6.71 15. SIP Technologies and Exports Limited 18.37 Updated margin -33.20. Rejected being loss making. 16. Sasken Communication Technologies Limited (Segmental) 17.88 Updated margin 17.30 17. Satyam Computers Services Limited 29.43 The assessee ....
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....ucting his own comparability analysis. However, in the comparability analysis the employee cost to sales filter was taken by TPO at 25%. We, prima facie, found that four comparables out of 26 introduced by TPO even failed on account TPO's own filter of employee cost to sales at 25% as pointed out by learned AR. (i) In case of Celstial Biolabs Ltd., the total employee cost of the company as a percentage of total sales is only 20.05% of the total turnover and hence the company fails the employee cost to sales filter of 25% applied by the TPO himself. The extracts of the profit and loss account of the company substantiating the same is given in page 307 of the paper book. The relevant extract of search process conducted by the TPO evide....
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....red growth of more than 100% in the net margin indicating exception year of operations. (iii) In case of 3K Technologies Limited, we found that the total employee cost of the company is only 5.56% of the total turnover and hence the company fails the employee cost to sales filter of 25% applied by the TPO himself. The relevant extracts of the same are provided in page 334 & 338 of the paper book. The relevant extract of search process conducted by the TPO evidencing that this filter was applied by him is provided in page No.132 & 133 of the paper book. (iv) In case of Acropetal Technologies Limited , we found that the total employee cost of the company is only 8.20% of the total turnover and hence the company fails the employee cost t....
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....re Solutions Ltd. 18.01% 18.01% 13. Tata Elxsi Ltd.(Seg) 18.97% 18.97% 14. Bodhtree Consulting Ltd.(Seg) 19.14% 19.14% 15. Quintegra Solutions Ltd. 21.74% 21.74% 16. Avani Cincom Technologies Ltd. 25.62% 25.62% 17. LGS Global Ltd. 26.64% 26.64% 18. Persistent Systems Ltd. 27.70% 27.70% 19. Wipro Ltd. (Seg.) 28.45% 28.45% 20. 3K Technologies Ltd. 28.90% 21. E-zest Solutions Ltd. 28.95% 28.95% 22. Acropetal Technologies Ltd.(Seg) 40.03% 23. Infosys Technologies Ltd.(Seg) 40.41% 40.41% 24. Kals Information Systems Ltd. 41.94% 41.94% 25. Softsol India Ltd. 42.15% 42.15% ....