TaxTMI 
TaxTMI 
2019 (5) TMI 1849
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.... that the 3rd, 4th, 5th grounds of appeal are not pressed. The Ld. counsels further submit that the 8th, 9th, 10th, 11th, 12th, 16th, 18th and 19th ground of appeal will be academic in nature in view of specific directions in 13th, 14th, 15th and 17th ground of appeal. Therefore, we turn to the 13th, 14th, 15th and 17th ground of appeal. 3. The 13th ground of appeal The AO erred in considering Accentia Technologies Ltd. as comparable to the assessee for benchmarking its international transaction of provision of IT enabled services, disregarding the fact that the company is functionally different from the assessee i.e. it is engaged in provision of software services and operates under peculiar circumstances. 3.1 The Transfer Pricing Officer (TPO) has included Accentia Technologies Ltd. ('Accentia') in the final set of comparable on the ground that the company is a BPO and is into healthcare receivable management. The Ld. counsels of the assessee submit that Accentia is engaged in software development and Knowledge Process Outsourcing ('KPO') services in the nature of healthcare revenue cycle management and legal process outsourcing services. However, no se....
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....nnual report, it is engaged in providing software development services and is using SaaS delivery model. Further, from page 31 of the annual report, it can be seen that the company is also engaged in sale of software products, for which no segmental breakup is available. As per the 'Management Discussion Analysis' on page 25 of the annual report, the company is engaged in software development as it has SaaS model, which is further explained on pages 28 and 30 of the annual report. Further, the company has also developed software solutions such as 'Instakare' and 'Insta PMS' which helps healthcare providers with a holistic and comprehensive solutions that fulfils all the medical and administrative support needs. In the absence of segmental financial information for software development product sales (which would form part of income earned from medical transcription) the company cannot be considered as a comparable. In appellant's own case for AY 2010-11 (ITA (TP)A No. 598/Bang/2015) the ITAT 'A' Bench, Bangalore vide order dated 25.04.2018 at para 13.4 held as under: "13.4 We heard rival submissions and perused the material on record. The issue of comparability of ....
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....s comparable to the assessee for benchmarking its international transaction of provision of IT enabled services, disregarding the fact that the company is functionally different from the assessee i.e. it is engaged into Knowledge Process Outsourcing Services. 4.1 The TPO/AO included Acropetal Technologies Ltd. (Seg) (in short 'Acropetal') in the final set of comparables on the ground that the company is engaged in providing similar activity (IT Enabled Services ) and as per Notification No. 11521 issued by CBDT, there is no distinction between BPO and KPO. 4.2 The Ld. counsels of the assessee submit that Acropetal is engaged in providing KPO services. Explaining that TPO has considered 'Engineering Design Services' segment of Acropetal as comparable to the assessee, it is argued that the above segment of the company is in the nature of KPO and is functionally not comparable to the ITeS services performed by the appellant. In this regard, the Ld. counsels rely on the following orders of the Tribunal : (i) M/s Sitel Operating Corporation India Pvt. Ltd. (since amalgamated with Sitel India Pvt. Ltd.) v. ITO (ITA No. 598/Bang/2015 & ITA No. 452/Bang/2015) dated ....
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....e assessee's own case for the Assessment Year 200809 has excluded these two companies from the set of comparables in para 5 as under : "5. Thereafter he submitted that the following companies should be excluded on the basis of functional dissimilarity and in support of his contention, he placed reliance on the Tribunal order rendered in the case of M/s. Flextronics Tech. (India) Pvt. Ltd. Vs. DCIT in IT(TP)A No.1559(B)/2012 dated 23.10.2015, copy available on page Nos.17 to 38 of compilation of case laws submitted before the Tribunal. a) Accential Tech. Ltd. (Seg.) b) Acropetal Tech. Ltd. (Seg.) c) Coral Hubs Ltd. d) Crossdomain Solutions Ltd. e) Eclerx Services Ltd. f) Genesys International Corpn. Ltd. g) Mold Tek Technologies Ltd." We further note that the functional comparability has been examined in detail by the co-ordinate bench of this Tribunal in the case of Equant Solutions India Pvt. Ltd. Vs. DCIT in IT(TP)A No.1202/Del/2015 as well as in the case of ITO Vs. Interwoven Software Services (India) Pvt. Ltd. in ITA No.461/Bang/2015. Further in the case of Acropetal Technologies Ltd. (Seg.), t....
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....els further submit that the ITAT in appellant's own case for AY 2010-11 has followed the Tribunal discussion in the case of Tesco Hindustan Service Centre Pvt. Ltd. v. DCIT (ITA No. 191/Bang/2015) to reject the company functionally not comparable to the appellant i.e. companies not engaged in providing ITeS (BPO Services). In this regard, reliance is placed by them on the following orders of the Tribunal : (i) M/s Sitel Operating Corporation India Pvt. Ltd. (since amalgamated with Sitel India Pvt. Ltd.) v. ITO (ITA No. 598/Bang/2015 & ITA No. 452/Bang/2015) dated 25 April 2018 [AY 2010-11] (ii) M/s Tesco Hindustan Service Centre Pvt. Ltd. v. DCIT(IT(TP)A No. 191/Bang/2015) dated 25 January 2017 [AY 2010-11] (iii) Outsource Partners International v. DCIT (IT(TP)A No. 337/Bang/2015) [AY 2010-11]. 5.3 On the other hand, the Ld. DR submits that ICRA is engaged in data processing and data mining and accordingly it is engaged in providing similar services (ITeS). Thus it is stated that the inclusion of the above company by the TPO/AO in the list of final comparables be confirmed. 5.4 We have heard the rival submissions and perused the relevant materials o....