TaxTMI 
TaxTMI 
2023 (5) TMI 1063
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....n law and in fact in assessing the total income of INR 1,71,54,680 as against returned income of INR 88,61,750 as computed by the Appellant in its return of income. Transfer Pricing adjustment on account of the international transaction relating to Information Technology enabled Services ("ITeS") - INR 82,92,925 1. On the facts and circumstances of the case and in law, the order passed under section 143(3) r.w.s. 144C of the Income Tax Act, 1961 ("the Act") by the Ld.AO is erroneous and bad in law; 2. The Ld. AO/TPO/ Hon'ble DRP has erred in upholding transfer pricing addition of INR 82,92,925 on account of an adjustment to Arm's Length Price ("ALP") of the international transaction pertaining to ITeS by the Appellant to its a....
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....craves leave to add, alter, modify, and withdraw all or any of the above grounds of appeal at or before the time of hearing of the appeal. For the above and any other grounds which may be raised at the time of hearing, it is praye3d that necessary relief may be provided." 2. The relevant facts are as appearing in the TPO"s order, Katerra India, a limited liability partnership firm, was incorporated under the Limited Liability Partnership Act, 2008 on 06/01/2017. Katerra India is engaged in the business of Information Technology enabled Services (ITeS) in the field of architectural and interior designing. During the year under consideration, the assessee had entered into various international transactions with its associated enterprises (....
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....it is engaged in diversified services including software development, knowledge process outsource (KPO), business process outsource (BPO) and further that the segmental details were not available in the annual report. Therefore, the assessee prays in this case for exclusion of Domex e-Data Pvt. Ltd. and on such exclusion of the said company, the margin earned by the comparable companies will work out to be 6.10% as 35th percentile and 23.74% as 65th percentile with a median of 19.46%, accordingly, the margin of the assessee i.e., 11.23% falls within the comparable range and consequentially, there would be no transfer pricing adjustment and the other transfer pricing grounds of appeal raised in this appeal would become academic. 4. Before t....
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....yze the facts and circumstances in this case and have given considerable thought to these submissions made before the Bench. 6.1 Admittedly, the assessee is doing ITeS functions and as explained by the ld.counsel for the assessee, it is mainly doing drawings etc. for architectural and interior designing which is outsourced to it by the AE, i.e. the US entity and for the work done by the assessee in India, receives service income from AE. In the ITeS segment, the TPO had included comparables and the assessee before us has submitted that out of these comparables, if Domex e-Data Pvt. Ltd. is excluded, then the assessee would fall within the comparable range and there would be no transfer pricing adjustment and the other grounds would therefo....
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....the various activities including software development activity using high end software, hardware and is also involved in products innovation and renovation, so these activities are absolutely dissimilar with ITeS functions performed by the assessee before us. This company i.e. Domex e-Data Pvt. Ltd., as per its annual report, is engaged in diversified activities including software development KPO & BPO services and, hence, its functionally dissimilar to the functions of ITeS carried out by the assessee. We observe that both the TPO and ld.DRP had held that since Domex e-Data Pvt. Ltd. is doing e-commerce activity, therefore it is similar to ITeS, hence, was held comparable with that of the assessee. However they have not dealt with or given....
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....the aforesaid decision, the Tribunal has relied on another decision of Pune Bench in the case of Schlumberger India Technology Centre (P) Ltd. v. DCIT [2022] 142 taxmann.com 243 (Pune - Trib.) wherein again while benchmarking international transaction in the ITeS segment, Domex e-Data Pvt. Ltd. was excluded from the final set of comparables. In this decision, the Pune Tribunal relied on logical principle following from the decision in the case of M/s. Tasty Bite Eatables Ltd. v. ACIT in ITA No.1823/PUN/2018, dated 03/06/2021 of the Hon'ble Delhi High Court, wherein it has been held that if two companies performing ITeS, ought to be considered as comparable, then the specific business of the said two companies has to be analyzed and then....