TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 1628
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....("the appellant") is an Indian company engaged in the business of providing software development services. The appellant is a captive software service provider and caters to the requirements of its Associated Enterprise ("AE"). During the previous year relevant to the assessment year 2013-14, the appellant had provided software development services to its AE for Rs. 12,89,90,091/-. The Assessing Officer in his order dated 25.10.2017, passed after directions dated 28.08.2017 of the Dispute Resolution Panel ("DRP"), made a transfer pricing adjustment of Rs. 1,44,07,989/- to the appellant's income. Being aggrieved, the appellant preferred the instant appeal before this Hon'ble Tribunal. 2. The appellant in its Transfer Pricing Study Report ....
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....the assessee's stand is that Comparable Uncontrolled Price Method ('CUP' for short) is the MAM. He requested that this issue as to which is the MAM be open for adjudicating at a latter year when the occasion arises. He submitted that, if certain comparable companies are excluded from the list of comparable companies on merits for the computation of ALP and if Working Capital Adjustment ('WCA' for sort) is provided, then the ALP will be within the range of +/-5% margin. 3. Ld. Sr. Counsel submitted that the following companies which were considered as comparables by the TPO, while computing the ALP, have to be excluded, on merits as they are not comparable due to various reasons. 4. He submitted that the company, Axit IT & T Limited has to....
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....tion to page no. 71 of the paper book(13 of the order) and therefore, he pleaded that the said company should be excluded from the comparables. 7. In the case of Thirdware Solutions Limited he submitted that the said company is also functionally different and there is unavailability of segmental information. It is also involved in the sale of products other than software development services. Thus the functional profile of the assessee is different and drew our attention to the annual report page 381 of paper book vol. 1 and page 35 of CPB (Convenience Paper Book) to show that segmental break up of revenue attributable to software development services and ITeS is not available in the case of Thirdware. Therefore, he prays for exclusion of ....
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....ient; and that the assessee has to demonstrate on facts as to how their decisions are applicable to it in this assessment year. He relied on the order of the TPO as well as the DRP on each of the disputed comparables and argued that the decision taken by the DRP be upheld. He submitted that the argument of the assessee that Related Party Transaction ('RPT' for short) filter has been wrongly applied, be tested by restoring the issue to the file of the AO for fresh adjudication if need be. 10. Rival contentions heard. On a careful consideration of the facts and circumstances of the case, perusal of the papers on record and the orders of the authorities below, as well as case law cited we hold as follows. 11. Both the parties agreed that the....
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....our notice, we direct that this company be excluded from the list of comparable companies. ii. Zylog Systems (India) Ltd.: We note that Tribunal has in assessee's own case for AY 2010-11 held as under: "Consistent with the view taken by the coordinate Bench of the Tribunal in the case of Alcatel-Lucent India Ltd. (supra) we direct this company be excluded from the list of comparable companies for the reason that this company provides broadband services and wireless internet-based communication services as well as enterprise computing, mobile computing. Employee cost filter of 25% is not met as the assessee's employee cost percentage is only 20.14%." Respectfully following the decision of this Tribunal in assessee's own case for AY 2....
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....ok and page 35 of CPB. Our attention was also drawn to page no. 49 of Philips India Limited (supra) where this fact of segmental break up not available has been taken note of and the said company was excluded from the comparables. Therefore we also direct this exclusion of this company from the comparables. v. Infinite Computer Solutions (India) Ltd.: As per the annual report this company is involved in the provision of information technology services of Application management, Infrastructure management, Product engineering services, Next-generation messaging platforms, Enterprise mobility solutions to the telecom, Healthcare and Financial services sectors, R&D and Intellectual property leveraged solutions and related IT services. Theref....