TaxTMI 
TaxTMI 
2018 (5) TMI 1776
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....isfied in the instant case. 1.2 On the facts and in the circumstances of the case and in law, the TPO erred in not demonstrating that the motive of the Appellant was to shift profits outside of India by manipulating the prices charged in its international transactions, which is a pre-requisite condition to make any adjustment under the provision of Chapter X of the Act. 1.3 The order passed by the AO is without jurisdiction, inter alia, insofar as it purports to give effect to an invalid order of the TPO. 2 Determination of arm's length by the TPO/AO in relation to the 'Software development Services' segment 2.1 The TPO/AO erred on facts and in law in conducting a fresh benchmarking analysis using non contemporaneous data and substituting the Appellant's analysis with fresh benchmarking analysis on his own conjectures and surmises. Thus the Appellant prays that the fresh benchmark analysis conducted by the learned TPO is liable to be quashed. The Ld. DRP erred in upholding the actions of TPO/AO. 2.2 The TPO/AO erred on facts in rejecting the comparable companies arrived at in the Transfer Pricing Study without considering the functional and risk analy....
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....he Ld. DRP erred in upholding the actions of the TPO/AO. 4 To provide appropriate adjustments to the comparable companies 4.1 The Ld. DRP erred in disallowing the working capital adjustments under Rule 10B of the Income Tax Rules, 1962 provided by the Ld. TPO which is in line with the OECD guidelines. Additionally, the Ld. DRP erred in not considering various Tribunal judgments which provide guidance on (a) the requirement to grant the benefit of working capital adjustment and (b) the need for adopting certain assumptions while computing the said adjustment for the purpose of transfer pricing. 4.2 The Ld. DRP, by denying on flimsy grounds the benefit of working capital adjustment to the Appellant granted by the TPO, has ignored the principles of computation of the working capital adjustment that has been accepted by various Tribunals till date. 4.3 The Ld. DRP erred in relying on M/s Mobis India Limited in ITA No. 2112/Mds/2011 (A Y: 2007-08) [2013] 38 taxmann.com 231 to reject the benefit working capital adjustment to the Appellant which was granted by the TPO. The Ld. DRP conveniently ignored the arguments placed by the Appellant during the DRP proceedings to differen....
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....ware solutions to financial service providers, globally. As per the assessee it had entered into agreements with Zafin BVI for the provision of software development services and has rendered software development services to its AE and it is remunerated for the services provided by it on the cost-plus basis. In this case, transfer pricing adjustment of Rs. 90,40,492/- was made in respect of international transactions with its AEs. 3.2. The DRP considered the submissions of the assessee against the exclusion of Akshay Software Technologies Limited from the final list of comparables. The TPO rejected this company as a comparable by stating that the company was engaged in providing professional services, procurement, installation, implementation, support and maintenance of ERP products and services. The assessee argued that the company is functionally similar to it. The DRP found that the functions of this company is a mix of different types of services which may or may not include software development. According to the DRP, in its reply to 133(6) notice issued by TPO, it was stated that it is in 'provision of support services', which cannot be interpreted as software development ac....
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....intenance of ERP products and services and providing professional services and so the same is a proper comparable for management services segment. Thus it was differed in its decision in respect of a company considered as a comparable for same assessment year in two different cases. The DRP relied on the decision of the ITAT, Delhi Benches in the case of Agnity India Technologies (P.) Ltd. vs. DCIT (73 taxman.com 102) wherein it was held as under: "Whether a particular company is a comparable or not is an exercise which has to be carried out every year in case of an assessee considering facts of that specific year and not blindly following precedent which has been laid down in earlier or subsequent year." 3.4 Thus, considering the facts as brought out by the TPO and those discussed above, the DRP held that the company cannot be considered as functionally similar to the assessee as although it is operating in multiple segments but segmental data was not available and hence, rejected the objection of the assessee on this count. 3.5 Against this the assessee is in appeal before us. 3.6 The Ld. AR submitted that the revenue of Akshay Software Technologies Limited for the as....
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....over: a) Larsen & Toubro Infotech Rs. 3613.42 crores b) Mindtree Ltd. Rs. 2361.80 crores c) Persistent Systems Ltd. Rs. 996.75 crores 4.2 The Ld. AR submitted that the turnover of the assessee for the assessment year under consideration was Rs. 26.46 crores. He submitted that the turnover of the companies mentioned hereinbelow is very huge and cannot be compared with that of the assessee. Being so, it should be excluded. 4.3 He also relied on the following case laws: 1) XM Software Solution (P.) Ltd. vs. ACIT (2018) 90 taxman.com 318 (Cochin- Trib.) 2) CIT vs. Pentair Water India (P.) Ltd. 69 taxman. Com 180- (HC Bombay) 3) M/s. Obopay Mobile Technology India Private Limited vs. DCIT- (IT(TP)A No. 469/Bang/2015 4) M/s. Logitech Engineering & Design India Private Ltd. vs. DCITIT( TP)A No.287/Bang/2015 5) Dell International Services India Private Ltd. vs. DCIT - IT(TP)A No. 85/Bang/2014 & CO No.21/Bang/2016 in IT(TP)A No. 1838/Bang/2013 6) DCIT vs. Hellosoft India (P) Ltd. - ITA Nos. 645 & 1411/Hyd/2009 and CO No. 40/Hyd/2009. 4.4 We have heard the rival submissions and perused the material on record. In our opinion, there is force in the argument of ....