TaxTMI 
TaxTMI 
2020 (9) TMI 1155
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....he assessee seeks exclusion of three companies, viz., Persistent Systems Ltd; Larsen & Toubro Infotech Ltd and Mind Tree Ltd. The assessee also inclusion of two companies, viz., R Systems Ltd and Akshay Software Technologies Ltd., in the list of comparables. 4. The assessee herein is providing technical support services on behalf of M/s Autodesk Singapore to its Associated Enterprises. As per T.P documentation, it has provided various types of services to its Associated Enterprises. We are concerned herewith services rendered under the title "Technical Support Services" and "Research and Development Services". Both these services have been clubbed together as "Software Development Services" segment for bench marking. The turnover of the assessee under Software Development Services segment for the year under consideration was Rs. 22.50 crores. The assessee adopted TNM method as most appropriate method and Operating Profit/Operating Cost as Profit level indicator (PLI). Both these bench marking aspects were accepted by the Transfer pricing officer (TPO). 5. The PLI of the assessee was 10%. The assessee selected seven comparable companies and the arithmetical mean margin of those co....
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....alls under the category of companies having turnover between Rs. 1.00 crore to Rs. 200 crores. She submitted that the coordinate bench has held in the assessee's own case related to AY 2005-06 and 2008-09 reported in (2018) 96 taxmann.com 263 and also in the case of Tavant Technologies India P Ltd (IT(TP)A No.1700/Bang/2017 dated 21.08.2020) has held that the companies having turnover of more than Rs. 200 crores could not be taken as comparable companies for an assessee having turnover of less than Rs. 200 crores. The Ld A.R submitted that, on application of above said upper turnover filter, the above said three companies would be excluded. Accordingly she prayed for application of upper turnover filter and exclusion of above said three companies. 10. The Ld D.R submitted that the upper turnover filter should be applied across the board and should not be applied on selective basis. 11. We heard the parties on this issue. The question of application of upper turnover filter was examined by the co-ordinate bench in the assessee's own case in AY 2005-06 and 2008-09 (referred supra). The said decision was followed by another co-ordinate bench in the case of Tavant Technologies India ....
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....n the basis that the IT(TP)A No.1700/Bang/2017 5 companies turnover was much higher compared to that the Assessee. 17.8. In view of the above conclusion, there may not be any necessity to examine as to whether the decision rendered in the case of Genisys Integrating (supra) by the ITAT Bangalore Bench should continue to be followed. Since arguments were advanced on the correctness of the decisions rendered by the ITAT Mumbai and Bangalore Benches taking a view contrary to that taken in the case of Genisys Integrating (supra), we proceed to examine the said issue also. On this issue, the first aspect which we notice is that the decision rendered in the case of Genisys Integrating (supra) was the earliest decision rendered on the issue of comparability of companies on the basis of turnover in Transfer Pricing cases. The decision was rendered as early as 5.8.2011. The decisions rendered by the ITAT Mumbai Benches cited by the learned DR before us in the case of Willis Processing Services (supra) and Capegemini India Pvt. Ltd. (supra) are to be regarded as per incurium as these decisions ignore a binding co- ordinate bench decision. In this regard the decisions referred to by the lea....
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....to this company for each quarter is available in public domain and it can be collated to arrive at the financials relating to the financial year adopted by the assessee company. She submitted that the assessee has already collated the details. Accordingly she prayed for inclusion of this company. 14. We heard Ld D.R, who submitted that this company may be restored to the file of AO/TPO for examining it afresh. In the written submissions, the Ld A.R has collated the financial details of this company for the four quarters ending 31.3.2013 in accordance with the submissions made by her. The said financial details relate to the financial year adopted by the assessee. In view of the decision of Hon'ble Punjab & Haryana High Court in the case of Mercer Consulting (India) (P) Ltd (supra), the AO/TPO is directed to examine this company by examining the correctness of collation of financial data and also by undertaking FAR analysis. Accordingly we restore this company to the file of AO/TPO for examining the same. 15. The Ld A.R submitted that the TPO has rejected M/s Akshay Software Technologies Ltd on the ground it is functionally different from the activities of the assessee, since it i....