2018 (12) TMI 1070

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Ground No. 2, with its sub grounds, relates to the addition of Rs. 6.87 crores to the income of assessee, allegedly on account of difference in the arm's length price of the international transaction of provision of software development services. 4. Briefly stated, the facts of the case are that the appellant company is a subsidiary of Pitney Bowes Software Inc., USA and is engaged in the business of providing end-to-end business solutions in location Intelligence, which combines technology, data and services with domain expertise to enable an organization to measure, compare, visualize its business data. 5. The international transactions undertaken by the assessee company with its AEs, as reported are as under: Nature of International ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....luded other comparables. The comparables finally used by the TPO are as under: S. No Name of the Company OP/OC (%)  1 Ace Software Exports Ltd -0.58% 2. Acropetal Technologies Ltd 1.83% 3. Akshay Software Technologies Ltd 0.44%  4. Alcatel-Lucent India Ltd 10.71%  5. Birlasoft (India) Ltd 32.83% 6 CG- VAK Software & Exports Ltd 10.16%  7. Larsen & Toubro Infotech Ltd 26.76%  8. Mindtree Ltd 19.42%  9. Persistent Systems Ltd 34.48%  10, Sasken Technologies Ltd 6.46% 11. Tata Elxsi Ltd 15.78% 12. Tata Technologies Ltd 34.38% 13. Technosoft Engineering Projects Ltd 27.34% 14. Thirdware Solution Ltd 49.19% 15. Wipro Ltd 26.24%   Average ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....of the total sales. These facts are clearly in contradiction to the filter applied by the TPO and, therefore, this company deserves to be excluded from the final set of comparables. WIPRO Ltd. 16. The finances of this company shows that it is engaged in the provision of IT services, including Business Process Outsourcing [BPO] and I.T. products. Moreover, the Annual Report of this company states that segmental account have been prepared at consolidated level. Moreover, even within the I.T. Services segment [consolidated] this company has included revenue from BPO services. The balance sheet of this company shows that it owns significant intangibles in the form of brand, trademarks, patents and technical know-how etc. 17. The Hon'ble....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....pted as the company is having unallocated expenses. For similar reasons, in assessee's own case in assessment year 2013-14, the Tribunal has excluded this company at the threshold in ITA No. 7034/DEL/2017. Considering the peculiarity of the facts of this company in the light of the findings of the co-ordinate bench, we direct for exclusion of this company. TATA TECHNOLOGIES LIMITED 22. As mentioned elsewhere, the TPO has adopted filter of related party transaction which is more than 25%. The accounts of this company shows total sales of 886 crores and the Revenue from related party transaction is Rs. 777 crores which comes to about 87% and is, therefore, hit by the filter adopted by the TPO himself. This company deserves to be excluded a....