2020 (10) TMI 1356

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....e of Tata Elxsi Ltd, i.e., exclusion of expenses incurred in foreign currency from both export turnover and total turnover. (c) Relief granted by Ld DRP in respect of addition made on account of transfer pricing adjustment. 4. The facts relating to the case are discussed in brief. The assessee company is wholly owned subsidiary of M/s Galax E Solutions Inc. It is providing software development services to its AE relating to internet client-server, more particularly it offers:- 1. Independent verification and validation. 2. Enterprise Application Integration 3. Enterprise shared services implementation 4. Enterprises IT solutions 5. Services level management 6. Enterprise reliability framework 7. Technical support. The TPO has made transfer pricing adjustment in respect of Provision of software development services only. 5. Both the parties are in appeal in respect of addition relating to Transfer pricing adjustment. The facts relating to the same are discussed in brief. The assessee has provided software development services to its Associated Enterprises (AEs). The turnover of the assessee in the segment of Provision of software development services was ....

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....eads as under:- "12. The DRP erred by rejecting Mindtree Ltd as a comparable which was selected by the TPO, stating that Mindtree Ltd undertakes 'on site' activities through its branches and therefore not comparable to the assessee company. This filter (on site) was neither used by the assessee not by the TPO in selecting the comparables." The grounds and additional ground urged by the assessee seek exclusion of (a) Persistent Systems & Solutions Limited (b) Persistent Systems Limited (c) Sasken Communications Technologies Ltd and inclusion of (a) R.S Software Ltd (b) Evoke Technologies Ltd (c) Mindtree Ltd. 5.4 The Ld A.R submitted that all his submissions are supported by the decision rendered by co-ordinate bench of Tribunal in the case of (i) M/s AMD India Private Limited vs. ACIT (IT(TP)A No.1487/Bang/2015 (ii) M/s Applied Materials India Pvt Ltd vs. ACIT (IT(TP)A No.17/Bang/2016) (iii) M/s L G Soft India P Ltd vs. DCIT (IT(TP)A No.52/Bang/2016 dated 05th August, 2020) 5.5 The revenue is challenging the decision of Ld DRP in excluding all ten comparable companies listed earlier. 5.6 The Ld D.R submitted that the assessee has accepted R.S. So....

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....ing (I) Pvt Ltd (2017)(85 taxmann.com 124). For the sake of convenience, we extract below the discussions made and the decision taken by the Tribunal in the case of L G Soft India P Ltd (supra):- "10. With regard to the other 7 comparable companies, whose exclusion is challenged by the revenue in ground No.2 of its appeal, we find that exclusion of these comparables from the list of companies selected by the TPO had come up for consideration before the Bangalore ITAT in the case of Electronic for Imaging (I) Pvt. Ltd. v. DCIT [2017] 85 taxmann.com 124 [Bang. Trib]. ; Symantech Software & Services (I) Pvt. Ltd. v. DCIT, ITA No.614/Mds/2016; DCIT v. Ikanos Communication Pvt. Ltd. in ITA 137/Bang/2015; Ness Technologies (I) Pvt. Ltd. v. DCIT in ITA No.696/Mum/2016 which are also decisions rendered in relation to AY 2011- 12 in the case of a companies providing SWD services such as the assessee in the present appeal. It is also relevant to point out that the very same comparable companies chosen by the TPO in the present appeal IT(TP)A Nos.52 & 97/Bang/2016 had been chosen by the TPO as comparable companies in the case of Electronic for Imaging (I) Pvt. Ltd. (supra). The Tribunal in ....

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.... of comparable companies and ground No.2 raised by the assessee to this extent is dismissed. We may add that the other grounds raised by the revenue in its appeal are purely supportive of ground No.2 and are general grounds with no specific reference to instances of comparables excluded and hence dismissed." 5.10 Following above said order of co-ordinate bench, we confirm exclusion of above said seven companies. Since the assessee has sought for inclusion of three companies out of the ten companies excluded by Ld DRP, viz., M/s Evoke Technologies Ltd, R.S software India Ltd, Mindtree Limited, the ground of revenue in respect of above said three companies are allowed. 5.11 In the appeal of the assessee, the assessee seeks exclusion of all the three companies retained by Ld DRP, viz., M/s Persistent Ltd, M/s Persistent Systems & Solutions Ltd and M/s Sasken Communications Ltd. 5.12 The above said three companies, viz., M/s Persistent Ltd, M/s Persistent Systems & Solutions Ltd and M/s Sasken Communications Ltd have been dealt by the co-ordinate bench in the case of LG Soft India P Ltd (supra) as under:- "16. Now we shall take up the appeal of the assessee. The assessee in groun....