TaxTMI 
TaxTMI 
2022 (12) TMI 65
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....9. 2. At the outset, the counsel for the assessee submitted that there is a delay of 33 days in filing of the present appeal and filed an application along with affidavit for condonation of such delay. The reason cited in the affidavit produced before us is that the assessee company had two directors, one of whom was a non-resident and was based outside of India. In the case of the other director, who was a resident of India, due to medical emergency in the family, she was unable to attend to any administrative activities. With respect to the other Director of the assessee company, since he was based outside India during the period under consideration, he was not available to authorise the filing of appeal before ITAT and hence there was a....
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....erford Engineered Systems Support Division (WESS): this division supports the maintenance and development of software developed by Weatherford Group. The contention of the assessee is that the TPO erred in law and on facts in not excluding CTIL as comparable company though the same is functionally dissimilar to the WESS segment of the assessee company. Further, the TPO erred in law and on facts and ignoring the fact that due to extraordinary events which had taken place with CTIL during the year under consideration, for such company comparability adjustment cannot be made. Before DRP, the assessee submitted various contentions for exclusion of CTIL from the set of comparable companies, which can be summed up as under: (i) During the year ....
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....he extraordinary event with respect to CTIL entering into software and e-governance space is concerned, the same admittedly took place in February 2008 i.e. at the end of the financial year and hence had no impact on the financials the company, so far as comparability is concerned (iii) As to the claim that the company CTIL had earned abnormal margin/supernormal profits during the year under consideration, there is no provision under Rule 10B(2) to reject comparables on the basis of profit margins. Under the TP provisions of what is tested under the margin-based methods is the margin itself and thus, the margins cannot be used as a criterion for selecting or rejecting the comparable. In the comparability analysis, a higher profit or loss ....
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....under consideration and hence CTIL could not have been used as a comparable in the instant set of facts. The counsel for the assessee submitted that even if it were to be accepted that CTIL was into software development, but since substantial part of the software development was outsourced to 3rd party, the modus operandi or the business model of CTIL was not comparable to the assessee. In response, the Ld. DR relied upon the observations made by DRP/AO in the Order. 6. We have heard the rival contentions and perused the material on record. The primary arguments put forward by the counsel for the assessee in support of his contention that the CTIL should be excluded as a comparable company, is that during the year under consideration CTIL ....