TaxTMI 
TaxTMI 
2020 (3) TMI 872
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....olution Panel (DRP). 2. All the grounds urged by the assessee relate to Transfer pricing adjustment made in respect of Software development services. Though the assessee has raised many grounds, yet the Ld A.R restricted her arguments at the time of hearing with regard to exclusion of two comparable companies, viz., Larsen & Toubro Infotech Limited and Persistent Systems Ltd. Accordingly remaining grounds are dismissed as Not Pressed. 3. The assessee is engaged in the business of providing Software development services to its overseas affiliates. The turnover of the assessee company for the year under consideration was Rs. 13.46 crores. The assessee adopted Operating Profit/Operating Cost (OP/OC) as the Profit Level Indicator (PLI). T....
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....inate bench in the case of M/s Nielson Sports India P Ltd (IT(TP)A No.196/Bang/2017 dated 28-06-2019 relating to AY 2012-13). The Ld D.R, however, countered the said contention by submitting that Turnover filter cannot be the criteria for excluding a company, which is otherwise comparable. The Ld A.R further submitted that the High Courts have not rendered any decision so far on application of turnover filter. Further Rule 10B(3) does not prescribe the turnover filter as a criteria. 8. We heard rival contentions and perused the record. We notice that the co-ordinate bench has excluded both the companies viz., Larsen & Toubro Infotech Limited and Persistent Systems Ltd in its order passed in the case of M/s Metric Stream Infotech (India) ....
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....th that of the Assessee has been tabulated by the TPO. The objections of the Assessee for rejecting such objections has been set out at page-21 to 23 of the TPO's order. The DRP upheld the order of the TPO including this company as a comparable company. 15. The grounds on which the Assessee seeks exclusion of this company from the list of comparable companies is on the ground that (i) this company is functionally dissimilar to that of SWD service provider and that it develops Software products ; (ii) Segmental Information of various segments are not available; (iii) Scale of operation and presence of intangibles, brand etc. 16. As far as functional dissimilarity of this company is concerned, this company also renders SWD s....
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.... met by the TPO by pointing out that the whole segment of SWD services was considered for comparability. The objection of the Assessee in this regard is not specific and is vague and is on an assumption that this company operates in three segments. The TPO has pointed out that there is only one segment and hence this objection in our view was rightly disregarded by the revenue authorities. 19. As far as the objections regarding presence of intangibles, it is seen from the order of the TPO that the intangibles are nothing but Operating systems, office tools, development tools, testing tools etc., that are used in the process of rendering SWD services by the Assessee and therefore cannot be the basis to hold that this company is func....
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....87 of Volume-III paper book filed by the Assessee. The profit & Loss account is at page- 793 of Volume-III paper book filed by the Assessee. Income from operation is Rs. 9967.53 million. Note 21 to the note on accounts gives the break of this revenue which is at page- 814 and it is fully from providing software development services. This revenue has been compared with costs and the OP/TC of this company arrived at by the TPO. Note 26 to the notes on accounts gives the segmental break-up and the segments are all software services segment and there is no product segment at all. The learned AR placed reliance on decisions where this company was excluded from the list of comparable companies. These decisions do not relate to AY 13-14. We can th....
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....., and TCS-EIT Serve Ltd., on the ground that the turnover of both these companies are more than 200 cores while the turnover of the assessee company was only 20.23 crores. By placing reliance rendered in the case of Northern Operating Services IT(TP)A No.101/Bang/2016, more particularly paragraph 18 of the order thereof, the ld AR submitted that high turnover companies cannot be compared with the low turnover companies. 8. The ld AR further submitted that the ld DRP has confirmed inclusion of Universal Print Systems Ltd., and BNR Udyog Ltd. The coordinate bench in the case of Mobility Infotech India Pvt. Ltd., (2018) 97 taxmann.com 2 has restored both these comparable companies to the file of AO/TPO for examining the same afresh b....