AI Drafter 
TaxTMI 
TaxTMI 
2021 (9) TMI 1438
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....the assessment year 2014-15. 2. The only issue raised in this appeal is against the transfer pricing addition of Rs.13,48,02,885/-. 3. Briefly stated, the facts of the case are that the assessee company is engaged in rendering software support services. A return was filed declaring total income of Rs.32,84,75,510/-. Certain international transactions were reported in Form No. 3CEB. The Assessing Officer (AO) made a reference to the Transfer Pricing Officer (TPO) for determining the Arm's Length Price (ALP) of the international transactions. We are concerned only with the international transaction of "Provision of Software Research and Development and Technical Support services" with transacted value of Rs.94,89,36,023/-. The assessee ....
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....have gone through the Agreement dated 01-04-2013 between the assessee and its Associated Enterprise (AE) namely, Redknee, Inc, (RI) Canada, whose copy has been provided at page 394 onwards of the paper book. The Agreement provides that the RI (i.e. the assessee's AE) is a global provider of OSS/BSS software products solutions and services to the telecommunication industry and is the owner of all applicable rights, titles and interest in the Technology (entire Technology platform owned by RI, as existing on the Effective Day, comprising of the Products and RI Intellectual Property). On the other hand, the assessee is a Subsidiary and is in the business of performing, among other things, contract research and development (R&D) services. The t....
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....The assessee's objections about the functional dissimilarity did not weigh with the TPO. The assessee remained unsuccessful before the DRP as well. 7. Having heard both the sides and gone through the relevant material on record, we observe from the Annual report of this company, a copy of which has been placed at page 77 of the paper book, that it acquired a company called CloudSquads, Inc through stock acquisition in February, 2014. Without examining the functional similarity or dissimilarity of this company, we find that the extraordinary financial event of acquisition of another company taking place during the year under consideration has rendered it noncomparable. 8. The Hon'ble jurisdictional High Court in Pr. CIT Vs. Aptara Tech....
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....s mainly of sale of user licenses. In the Profit and loss account, the main item is `Revenue from sale of products' with the value of Rs.20,675.74 lakhs. In fact, `Revenue from sale of Services' has been shown at Nil. This shows that the company is into the business of software products and not rendering the software services. This fact is further corroborated from the Note given under the head `Revenue Recognition', that: `. . . . . . . . . . revenue from sale of user licenses for software applications is recognized on edelivery of software license key to end user'. In contrast, the assessee company is engaged only in providing software development services and is not having any software product business. In view of this startling function....
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....isation: Solution: RS Software assists leading brands in the global payments business address the challenges of switching and authorization in a competitive 24x7 marketplace, improving availability, scalability and security. We have worked for more than 20 years to enable the speed of a transaction throughout to grow from 500 transactions as per second to more than 20,000 transactions per second today. Clearing and settlement: Solution: RS Software provides clearing and settlement solutions that handle large transactions in an environment marked by cross-border activity, regulatory changes and payment diversity. Risk and fraud: Solution: RS Software helps leading global payment brands integrate t....