TaxTMI 
TaxTMI 
2020 (2) TMI 259
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.... the assessee has raised many grounds, the learned AR restricted her arguments in respect of ground No.4, ground No.5.12 and ground No.5.13. In ground No.5.12 also, the learned AR canvassed for inclusion of only two comparable companies, viz., Powersoft Global Solutions Limited and Evoke Technologies Private Limited. The learned AR made a statement at bar that the assessee is not pressing other grounds. The ground pressed by the learned AR, viz., ground no.4, 5.12 and 5.13 read as under:- "4. Determination of Net Cost Margin of the Appellant The Ld.AO/Ld.TPOhad erred on facts and in law in not acknowledging that the sub-contracting charges incurred by the Appellant represents arm's length consideration and was thereby r....
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....d adopted TNMM method as the most appropriate method and operating cost by total cost as profit level indicator. The TPO accepted the TNMM method as well as profit level indicator of the assessee. The assessee had computed arithmetical mean of 12.52 % in respect of comparables owing PLI of the assessee was 18.16%. Accordingly, the claim that its international transactions relating to software development services is at arm's length. 5. Rejecting the TP study of the assessee, the TPO selected following 10 comparables:- Sl. No. Name of the Company Mark-up on Total costs (WC-unadj) (in %) Mark-up on Total costs (WC-adj) (in %) 1. Datamatics Global Services Ltd. 14.57 15.25 2. Genesys International Corporation L....
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....ting charges incurred by the assessee should be given pass-through status and hence, should be excluded from the operating cost and income while computing arm's length price. The learned AR fairly admitted that the assessee made identical claim in the immediately preceding assessment year, i.e., assessment year 2011-2012 and it has been rejected by the Tribunal. 10. We heard the learned Departmental Representative on this issue and perused the record. We noticed that identical issue was considered by the co-ordinate Bench of the Tribunal in assessee's own case for assessment year 2011-2012 in IT(TP)A No.17/Bang/2016 dated 21.09.2016 and the same has been decided against the assessee with the following observations:- "7. We have ....
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.... any value addition. It is pertinent to note that outsourcing cost in software development services activity is part and parcel of cost of providing the service to the AE and cannot be separated from the operating cost and operating revenue of the said segment of services. Accordingly, the cost of software development services cannot be treated in this fashion as claimed by the assessee. Hence we do not find any merit or substance in the contention raised by the assessee on this issue." 10.1 Since there is no change in facts relating to this claim, consistent with the view taken by the co-ordinate Bench, we also reject this ground of the assessee. 11. In ground No.5.12, the assessee seeks inclusion of only two companies, viz.....
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....les by the Tribunal in the case of M/s.CGI Information Systems and Management Consultants Pvt. Ltd. v. ACIT [IT(TP)A Nos.586/Bang/2015 & 183/Bang/2017 for assessment year 2010-2011 and 2011- 2012 - order dated 11.04.2018]. 15. We heard the learned DR and perused the record. We noticed that M/s.CGI Information Systems and Management Consultants Pvt. Ltd. (supra) is also engaged in the business of providing contract software development services and information technology enabled services to its holding company, as captive service provider. We noticed that the coordinate Bench, in the above said case, has followed the decision rendered by the Delhi Bench of the Tribunal in the case of Agilis India Technologies (P.) Ltd. v. ITO [(2018) 89 t....
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....lhi Bench of ITAT in the case of Saxo India (P) Ltd. Vs. ACIT (2016) 67 taxmann.com 155 (Del- Tri). The discussion is contained in paragraphs 4.8 to 4.10 of the Tribunal's order. The Tribunal held that L & T Infotech Ltd., was a software product company and segmental information on SWD services was not available. The Tribunal also noticed that the appeal filed by the revenue against the tribunal's order was dismissed by the Hon'ble Delhi High Court in ITA No.682/2016. (c) Persistent Systems Ltd., was excluded from the list of comparable companies on the ground that this company was a software product company and segmental information on SWD services was not available. The Tribunal in coming to the above conclusion referred to the d....