AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 1866
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....ion Panel ("DRP") against the TPO order and subsequently, the learned Assessing Officer ("learned AO") issued the final assessment order with a transfer pricing ("TP") adjustment of INR 30,281,283/- 3. The learned AO / learned TPO erred in rejecting the TP documentation maintained by the Appellant by invoking provisions of sub-section (3) of 92C of the Act contending that the information or data used in the computation of the ALP is not reliable or correct. The learned AO/ learned TPO has grossly erred therefore in : 3. a rejecting comparability analysis carried in the TP documentation and in conducting a fresh comparability analysis by introducing various filters in determining the ALP. 3. b rejecting companies that are functionally comparable to the Appellant while performing the comparability analysis. Specifically, the following companies ought to have been included as comparable: * Nittany Outsourcing Services Private Limited * Datamatics Financial Services Limited * R Systems International Limited * Caliber Point Business Solutions Limited * Ultramarine & Pigments Limited * Jindal Intellicom Private Limited 3.c including companies that do not sat....
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....r the above and any other grounds which may be raised at the time of hearing, it is prayed that necessary relief may be provided." 3. At the time of hearing, assessee not pressed ground nos. 1, 2, 3, 3(a), 4, 5, 6, 7, 8, 9, 10,11 & 12. The ld. AR pressed only ground related to the comparables in 3(b) with reference to R Systems International Limited. Other five comparables viz., Nittany Outsourcing Services Pvt. Ltd., Datamatics Financial Services Ltd., Caliber Point Business Solutions Ltd., Ultramarine & Pigments Ltd. and Jindal Intellicom Pvt. Ltd. are not pressed. 4. The first ground for consideration in this appeal is with regard to considering R Systems International Ltd. as comparable. 5. The assessee has selected in the transfer pricing documentation R Systems International Ltd. as a comparable company since it is functionally comparable and passing all the filters applied by the assessee in the TP documentation. However the lower authorities rejected that company on the basis that it has different year ending. Against this assessee is in appeal before us. The ld. AR submitted that R Systems International Ltd. accounting period is January to December and assessee's accou....
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....coming to the concern Jindal Intellicom Pvt. Ltd. The case of assessee before us is that the said concern has different financial year than the one of assessee. The Assessing Officer had applied the current year data as contemporaneous data to be used for benchmarking the arm's length price of international transactions of assessee. The assessee had prepared its financial statements for the financial year starting from 1st April, 2009 to 31st March, 2010. The case of assessee before us is that Jindal Intellicom Pvt. Ltd. has prepared its financial statements for period of 15 months and the same is not to be selected in the final set of comparables. 22. We find that the Pune Bench of Tribunal in the case of BMC Software India Pvt. Ltd. Vs. DCIT in ITA No.1425/PN/2010, relating to assessment year 2006-07, order dated 16.03.2016 had rejected the concern having 15 months financials. 23. The Hon'ble Bombay High Court in the case of CIT Vs. PTC Software (I) Pvt. Ltd. in Income Tax Appeal No.732 of 2014 had also held that the comparable data should pertain to the same financial year. Accordingly, we hold that the margins of concern having different accounting period cannot b....
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.... IPRs as reflected in the Financial Statements, which will tend to influence the pricing policy and thereby directly impacting the margins earned. * Accentia has acquired the IQ Group of companies of United Kingdom consisting of three companies, Tactiq Ltd., Centric Ltd. and Neologiq Ltd and also amalgamated Ascent Infoserve. Owing to these extra ordinary events, Accentia should not be considered comparable to the assessee. * Further, the IQ Group of companies are engaged in Full Product Development Lifecycle involving Electronic Design and development, Software Design and Development and separate validation service, and User Interface Design and Implementation and Product Development Consultancy and Troubleshooting involving Systematic Technology Consultation software product design and development services. * The assessee also provided the workings highlighting the abnormal fluctuations in revenues and profits of Accentia for a 5 year period. 9. He submitted that the assessee does not agree to the acceptance of Accentia as a comparable company since it not only provides ITES but it is also into software products development and provides software as service. Also, the learn....
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....erial on record. As discussed in earlier year this comparable Fortune Infotech Ltd. was rejected as a comparable in the case of Outsource Partners International Pvt. Ltd. Vs. DCIT (supra) and it was held that it cannot be a comparable. Accordingly, we direct the AO/TPO to exclude the same. 13. The next ground is with regard to exclusion of Jeevan Scientific Technology Limited in ground no. 3(c). This ground does not require any adjudication in view of our findings with regard to issue raised in additional ground. 14. The assessee has raised additional ground and submitted the reason for raising an additional ground as follows. "Ground No. 4A: Jeevan Scientific Technology Ltd. (hereinafter referred to as "Jeevan Scientific") should be rejected as it fails service income filter of 75% as applied by the Ld. TPO. The Appellant submits that income form ITES activities for Jeevan Scientific is less than 75% of the total operating income and therefore Jeevan Scientific does not qualify the service income filter as applied by the TPO and therefore is not comparable to the Appellant. Reason for filing Additional Ground of Appeal The Appellant in the Form 36B has taken a generic gr....