TaxTMI 
TaxTMI 
2018 (12) TMI 1764
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....9, the same are dismissed as not pressed. 03. Before we deal with ground nos.10 to 16 and 18, we may give a brief background of the assessee's profile and the history of the assessment proceedings. The assessee filed a return of income declaring total income of Rs. 3,39,98,201/-. Notice u/s.143(2) of the Act was issued and thereafter the assessee was called upon to file the response. It was noticed by the AO that the assessee has also undertaken the international transactions during the year under consideration. Accordingly the matter was referred to the TPO for the purpose of determining the ALP of the international transactions vide communication dt.12.11.2013. The TPO in the TP order records the functions of the assessee in para.2 as under : 04. The TPO further mentioned that the financial results as per the P & L account for FY 2010-11 as under : 05. As per the 92CA report, the international transactions reported by the assessee was as under : 06. During the TP proceedings, the tax payer was issued a show cause notice and in reply the assessee had filed reply and submitted the objections. After considering the reply and submissions made the TPO has rejected the TP s....
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.... comparables are available, then 15% RPT filter should be applied, but if the comparables after applying the 15% RPT filter is less than six, then the RPT filter should be brought up from 15% to 25%. " As the assessee has not pressed for exclusion of ICRA Techno Analytics P. Ltd, accordingly ground no.12 in the revised grounds is dismissed as not pressed. 07. Now we are left with the following comparables which are now agitated by the assessee before us, namely, 1. Acropetal Technologies Ltd (seg) 2. E-infochips Ltd 3. Infosys ltd 4. Persistent Systems Ltd 5. Sasken Communication Technologies Ltd 6. Tata Elxsi Ltd (seg) 08. WITH regard to exclusion of these six comparables our attention was drawn by the Ld. AR to the decision of the coordinate bench in the matter of M/s. AT & T Global Business Services India P. Ltd (supra), wherein the Tribunal after considering the annual report and functional profile of this company had directed to exclude these companies . For ready reference, we are reproducing para 5 & 6 of the order : 5. We have considered the rival submissions, gone through the orders of the lower author....
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....the case of Saxo India Pvt. Ltd. vs. A CIT in ITA No, 6148/Del/2015 dated 05.02.2016 Para 10.1 & 10.2 available at pages 221 to 223. Respectfully following the same, we uphold its exclusion. In this manner, we uphold the exclusion of six comparables excluded by DRP out of 9 comparables excluded by DRP and exclude 4 omparables retained by DRP and we have already held that out of 9 comparahies excluded by DRP, 3 have to come back being 1) Evoke Technologies Pvt. Ltd., 2) Mindiree Ltd. (Seg) and 3) R S Software (India) Ltd. Now, we decide about LGS Global Ltd. As per the tribunal order rendered in the case of Applied materials India Pvt. Ltd. vs. ACIT (Supra), this is a good comparable and therefore, we direct the A.O. and TPO to include this comparable. So, there should be 4 comparables in the final list of comparable and on the basis of that, the AO/TPO should work out the ALP." 6. Respectfully following this tribunal order, we exclude these 10 comparables i.e.1) Accropetal Technologies Ltd. (Seg.), 2) E Zest Solutions Ltd. , 3) F - Infochips Ltd., 4) ICRA Techno Analytics Ltd., 5) Infosys Ltd., 6) Larsen & Toubro Infotech Ltd., 7) Persistent System & Solutions Ltd., 8) Per....
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....IT(TP)A No. 384/Bang/2016] AY 2011-12 m) Saxo India Pvt Ltd - ITA No. 6148/Delhi/2015 AY 2011-12 13. On the other hand the Ld. DR submitted that the assessee has not given any detailed working to the lower authorities. In the absence of the necessary details / data, it is not possible for the lower authorities to adjudicate the claim of working capital adjustment. 14. We have heard the rival contentions and perused the record. The TPO has adopted the TNMM for the purpose of determining the ALP and as per the mandate of law and Rules framed the assessee is required to work out the working capital adjustment with a view to weed out the dissimilarity between the assessee and the comparables. The Rules provide that the working capital adjustment is required to be made on the basis of the actual so as to remove abrasion or distortion in the profit earned by the assessee. 15. In the present case lower authority had worked out working capital adjustment on hypothetical figure of 1.63% instead of on actual basis. Hence we direct the TPO to grant working capital adjustment on actual basis, subject to availability of the workings made available by the assessee to TPO in ear....
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....icting the working capital of the company to 1.63% and thus not providing the full adjustment in relation to the working capital position of the company as against the comparable companies selected; (g) Upholding the TPO's approach of not providing Risk Adjustment and thus ignored the limited risk nature of the services provided by the Appellant and in not providing an appropriate adjustment towards the risk differential, even when full-fledged entrepreneurial companies are selected as comparables. Document 2 1. 2. That the order of the learned Deputy Commissioner of Income Tax, Circle 6(1)(1), Bangalore ("Assessing Officer" or "AO") pursuant to the direction of the learned Dispute Resolution Panel ('learned Panel') to the extent prejudicial to the Appellant, is bad in law and liable to be quashed. [corresponding to ground no. 1] That the learned AO and the learned Panel erred in upholding the rejection of Transfer Pricing (TP) documentation by the learned Deputy Commissioner of Income tax, Transfer Pricing - Range 2(1)(1) ('learned TPO') and in upholding the adjustment to the transfer price of the Appellant in respect of software deve....
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....for the services rendered by the Appellant, on rejecting/not considering FCS Software Solutions Ltd that is otherwise functionally comparable to the Appellant. [corresponding to ground no. 3(d)] 10. That on the facts and circumstances of the case, the learned AO/learned Panel erred in arbitrarily arriving at a set of companies as comparable for the services rendered by the Appellant, on inclusion of Acropetal Technologies Limited that otherwise fails the test of comparability. [corresponding to ground no. 3(d)] 11. That on the facts and circumstances of the case, the learned AO/learned Panel erred in arbitrarily arriving at a set of companies as comparable for the services rendered by the Appellant, on inclusion of E-Infochip Ltd. that otherwise fails the test of comparability. [corresponding to ground no. 3(d)] 12. That on the facts and circumstances of the case, the learned AO/learned Panel erred in arbitrarily arriving at a set of companies as comparable for the services rendered by the Appellant, on inclusion of ICRA Techno Analytics Ltd. that otherwise fails the test of comparability. [corresponding to ground no. 3(d)] 13. That on t....