AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 1401
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....roviding software development services (SWD services) to its Associated Enterprises (AE). The transaction of providing SWD services to its AE by the Assessee was an international transaction and the price received for rendering such services by the Assessee from its AE has to pass the Arm's Length Price (ALP) test as provided u/s.92 of the Income Tax Act, 1961 (Act). In this appeal the disputes is with regard to addition made consequent to determination of ALP and consequent upward revision and adjustment made to the price at which international transaction was carried out by the Assessee with its AE in respect of Software development Services(SWD services). 3. There is no dispute that the Most Appropriate Method chosen for the purpose of ....
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....gies Ltd., 24.13 13. Tata Elxsi Ltd.(seg) 20.91 AVERAGE MARK-UP 24.82 Determination of ALP: Arm's Length Mean Margin on cost 24.82% Less: working capital Adjustment - 2.04% (As per Annex -C) Adjusted margin 26.82% Operating cost Rs.14,06,95,730/- Arms Length Price (ALP) Rs.17,84,86,603/- 126.82% of Operating cost) Price Receive Price Received Rs.16,25,43,160 Shortfall bei Shortfall being adjustment u/s. 92CA Rs.1,59,43,443 5. The adjustment suggested by the TPO was incorporated by the AO in the draft order of assessment. The Assessee objected to the manner of determination of ALP by the TPO before the DRP. The DRP excluded some of the comparable companies chosen by the TPO and retained only t....
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....ch renders these companies as not comparable with Assessee engaged in SWD services such as the Assessee. The learned counsel for the Assessee has relied upon the decision of the Special Bench in the case of DCIT v. Quark Systems P. Ltd, [42 DTR 414] wherein the functionally comparability of these companies have been examined by this Tribunal and pleaded that the additional ground raised by the assessee may be admitted for adjudication on merits. Ld. AR has submitted that in a series of decisions, the Tribunal has held that there cannot be estoppel against the law and the non-comparable companies even if selected by the assessee in TP study, the same should be rejected. On the other hand, Ld. DR has vehemently objected to the admission of th....
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....plea of the Assessee, for admission of exclusion of the aforesaid three companies. 8. As far as the plea for exclusion of Persistents Systems & Solutions Ltd., Persisten Systems Ltd., and Sasken Communication Technologies Ltd., is concerned,this Tribunal in the case of a software development service provider such as the Assessee for the very same AY 2011-12 in the case of Autodesk India Ltd. Vs. ACIT in IT(TP) A.No.156 & 220/Bang/2016 by order dated 21.12.2018 held that these three companies are not comparable companies. It is pertinent to mention that the very same thirteen companies chosen in the case of the Assessee in this appeal and in the case of Autodesk India Ltd. (supra) were identical. The tribunal held on the comparability of th....
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....on that comparability of this company has to be decided afresh by the TPO after considering the facts as recorded in the decisions rendered by the Tribunal in the case of Electronics for Imaging India P. Ltd. (2017) 85 taxmann.com 124 (Bang.Trib.). We are of the view that similar directions would be appropriate in the present assessment year also. Thus, ground No.3(k) is decided accordingly." Respectfully following the aforesaid decision, we direct exclusion of the aforesaid three comparable companies from the list of comparable companies chosen by the TPO. 9. As far as the issue with regard to inclusion of Evoke Technologies Pvt.Ltd., as comparable company, the admitted factual position is that both the Assessee and the Revenue want its....
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....on cited by the learned counsel for the Assessee in the case of a SWD service provider such as the Assessee, this company was held to be a valid comparable company and included in the list of comparable companies. We therefore direct inclusion of this company in the list of comparable companies. 11. As for RS Software (India) Ltd., it was rejected by the DRP solely on the basis that it was allegedly predominantly engaged in the onsite development of software in FY 2010-11. In this regard, it is seen that this company was selected by the TPO and accepted by the Assessee as a comparable, and it was accordingly included by the TPO in the list of comparables. In the proceedings before the DRP, the Assessee did not object to its inclusion in th....