TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 1618
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts ,intra-corporate accounting like debit and credit records, vendor payables, fixed asset tracking and non- finance operations like data processing & other IT enabled services, freight cost management and order processing for certain geographies. There is no change in the ownership structure from the preceding year. During the FY 2006-07, Global-e Business Operations Pvt. Ltd, the assessee, provided data processing and other IT enabled services to its AEs located in various parts of the world. It is registered under the Software Technology Parks of India Scheme and is claiming tax holiday benefit in respect of the profits earned by it from the research and development services. It filed its return for ay 2007-08 on 30.10.2007 declaring an income of Rs. 1,84,82,610/-. On a reference, the TPO decided the adjustments to Arms Length Price at Rs. 85,93,91,410/- to its international transactions. On the Corporate Tax front, the AO excluded Rs. 20,51,19,242/, the expenditure incurred in foreign currency on travel, from export turn over for the purpose of computing deduction u/s10A. The AO found that the assessee has debited Rs. 2,62,94,302/ towards foreign exchange loss and reduced it f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....imited could not be treated as comparable to it on the grounds of functional dissimilarity and the presence of peculiar business circumstances" owing to business restructuring respectively. The AR submitted that several rulings of this Honourable Tribunal, pronounced subsequent to the assessee finalizing its TP study, have rejected the above mentioned companies as not comparable for benchmarking ITeS businesses . It has further been held that both Maple eSolutions Limited and Triton Corporation Limited cannot be considered as comparables due to their financial statements being unreliable owing to their directors' involvement in fraudulent activities and pleaded that these rulings should equally apply to its case as well. The TPO has therefore erred in finalizing the TP Order by retaining them as comparable to the assessee. Thus, the AR submitted that admission of the additional grounds of appeal raised would be necessary to assess the appropriate Arm's Length Price of the international transactions undertaken by it, being the subject matter of appeal and to render substantial justice. We have considered rival contentions, find that the above submissions are meritorious an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ny formed another company by name Learnsmart (India) Private Limited and expenditure of Rs. 2.89 crores and Rs. 1.09 crores has been debited to this company which has resulted in growth of Bodhtree profits 3. The revenue of the company grew at 91.63 percent C. Absence of segmental results The company operates in only one segment - software development D. Intangibles The company has incurred trade mark expenses E. Segmental information obtained under 133(6) contrary to the Annual Report F. Fluctuating margins Relied on : 1. Magma Design Automation India P. Ltd [IT(TP)A No.1214/Bang/2011 - A. Y. 2007-08] 2.AOL Online India P. Ltd [IT(TP)A.1036/Bang/2011 - A. Y. 2007-08] 4.eClerx Services Ltd : A. Functionally different 1. The company provides industry specialized services like Data Analytics, Operations Management and Audits & Reconciliation services which cannot be compared to a BPO or an IT offshoring company 2. The company is categorized as a KPO Relied on : 1. Magma Design Automation India P. Ltd [IT(TP)A No.1214/Bang/2011 - A. Y. 2007-08] 2. AOL Online India P. Ltd [IT(TP)A.1036/Bang/2011 - A. Y. 2007-08] 5. HCL Comnet SYSTEMS & Services Ltd (seg) : A. Functionall....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... company provides engineering design services for construction of building by using design tools like CAD/CAM, stadd pro by employing highly skilled software engineers B. Abnormal growth Growth of 204 percent in sales over previous year after C. Extraordinary event during the year The company acquired Cross Road Detailing Inc an engineering services KPO in USA Relied on : 1. Magma Design Automation India P. Ltd [IT(TP)A No.1214/Bang/2011 - A. Y. 2007-08] 2. AOL Online India P. Ltd [IT(TP)A.1036/Bang/2011 - A. Y. 2007-08] 11. Spanco Ltd (seg) : A. Functionally different The company is Involved in telecom business, BPO services B. low employee cost The company has a employee to sales ratio of 7.20 percent suggesting outsourcing of services Relied on : 1. Magma Design Automation India P. Ltd [IT(TP)A No.1214/Bang/2011 - A. Y. 2007-08] 2. AOL Online India P. Ltd [IT(TP)A.1036/Bang/2011 - A. Y. 2007-08] 12. Triton Corp Ltd : A. Unreliable financials Director involved in fraud B. Functionally different C. Trading of IT peripherals, providing call centre services and support services D. Absence of segmental information E. Extraordinary event during the year The company acquired 10....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... copy of it along with the information obtained u/s133(6) to the assessee and after affording due opportunity to the assessee , decide its comparability afresh. With regard to the comparable Accurate Data Converters Ltd, the assessee pleaded exclusion on the ground of employee cost filter. This matter is remitted back to the TPO for fresh decision after affording due opportunity to the assessee. Thus, the corresponding appeal grounds are allowed and treated as allowed for statistical purposes. 08. The next issue is on the adjustments made in respect of computation u/s 10A. The AO excluded Rs. 20,51,19,242/, the expenditure incurred in foreign currency on travel, from export turn over for the purpose of computing deduction u/s.10A . The assessee pleaded that it is rendering BPO Services and ITES. Since it is not engaged in rendering technical services, the expenditure incurred in foreign currency on travel should not be excluded from the export turnover for the purpose of computing deduction u/s.10A. Further, the assessee has debited Rs. 2,62,94,302/ towards foreign exchange loss and reduced it from the export turnover as well as from the total turnover . The AO held that it shou....