2022 (5) TMI 1515

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....he case and in law, in directing to include Maveric Systems Ltd, as a comparable, despite the fact that it is a loss making company and it also fails export filter. 2. The DRP has erred on the facts and circumstances of the case and in law, in directing to include Caliber Point Business Solutions Ltd and BNR Udyog Ltd, as a comparable, despite the fact that it did not appear in the search process carried out by the assessee and by the TPO. 3. The DRP has erred on the facts and circumstances of the case and in law, in ignoring the reliance of the TPO in the decision of the Hon'ble ITAT, Banglore, in the case of Kodiak Network (India) Pvt Ltd (ITA 1413/Bag/2010). 4. The DRP has erred on the facts and circumstanc....

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....appeal." 3. Briefly, the facts of the case are as under : The respondent-assessee is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of providing software development services, IT enabled services and sales support services to overseas BMC group entities. The return of income for the assessment year 2011-12 was filed on 27.11.2011 declaring total income of Rs.9,77,92,780/-. The respondent-assessee company also reported the following international transactions with its Associated Enterprises (AEs) within the meaning of section 92B of the Act :- Sr.No. Nature of International Transaction Amount (INR) Method adopted for benchmarking 1 Provision of software developmen....

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.....44%  2.67% At ALP 5. On noticing the above international transactions, the Assessing Officer referred the matter to the Transfer Pricing Officer (TPO) u/s 92CA(1) for the purpose of benchmarking the above international transactions reported by the respondent-assessee company in Form No.3CEB. The TPO vide order dated 29.01.2015 passed u/s 92CA(3) of the Act suggested the TP adjustment of Rs.41,79,38,397/-. While doing so, the TPO had rejected the TP study report submitted by the respondent-assessee by using a single year data, modified certain filters, rejected certain comparable companies selected by the respondent-assessee company and accepted certain additional companies as comparables. Accordingly, the TPO computed the pro....

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....urnover of respondent-assessee company and directed the Assessing Officer in respect of software development services segment to include the company Maveric System Ltd. as comparable in the list of the comparables by rejecting the observation of the TPO that this company was functionally different as it has work-in-progress indicating that it is into the product development. Similarly, the ld. DRP directed the Assessing Officer to include R. System International Ltd., KALS Information Systems & Mindtree Limited. In respect of IT enabled segment, the ld. DRP had directed the exclusion of Infosys Technologies Ltd., Eclerx Ltd. Caliber Point Business Solutions Limited, which is not challenge before us. In respect of sale support services, the ....

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....eciation 117.61  50.28 Profit Before Tax (705.02) 609.53 Less: Provision for Tax & Prior Period adjustments 49.17 103.67 Profit after Tax (754.19) 505.86 Balance of Profit for the earlier years 1524.29 1099.22 Transfer to Reserve, Dividend and Tax on Dividend 3.05 80.79 Balance carried to Balance Sheet 767.03 1524.29   Earnings Per Share - Face value of Rs.5 (Basic and Diluted) (51.42) 34.49 12. From the above chart, it is clear that this company is profit making company for the financial year 2009-10, therefore, it cannot be said that this company is loss making company in the last 3 preceding financial years. Accordingly, the contention raised on behalf o....