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2023 (8) TMI 1170
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.... 2022 for the Assessment Year ("AY") 2017-18, under section 143(3) read with section 144C(13) read with section 144B of the Income-tax Act, 1961 ("the Act") in pursuance of the directions issued by Dispute Resolution Panel (hereinafter referred to as the "Hon'ble DRP"), Bengaluru dated 29 December 2021 under section 144C(5) of the Act inter-alia on the following grounds which are without prejudice to each other: That on the facts and circumstances of the case and in law: General grounds 1. The impugned order of the Ld. AO passed pursuant to the order of the Transfer Pricing Officer - 1(1)(2), Bangalore ("Transfer Pricing Officer" or "Ld. TPO") and the directions issued by the Hon'ble DRP, to the extent prejudicial to the Appellant, is erroneous, bad in law, and contrary to the facts and circumstances of the case. Grounds relating to transfer pricing matters: 2. The Ld. AO has erred in passing the impugned order without following the directions of the DRP, which are binding on the Ld. AO, and accordingly not granting appropriate relief to the Appellant. 3. The Ld. AO/TPO/DRP erred in making an addition of INR 19,65,61,201....
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....on unreasonable comparable criteria. 4.5 The Ld. AO/TPO/DRP erred, in law and in facts, by not making suitable adjustments to account for differences in the working capital position of the Appellant vis-a-vis the comparable companies. thus acting against the principles laid down in the Rules. 4.6 The Ld. TPO/AO have erred, in law and on facts and circumstances of the case. by not making suitable adjustments to account for differences in the risk profile of the Appellant vis-a-vis the comparable companies. 4.7 Without prejudice to the above grounds, the Ld. AO TYPO/DRP erred, in law and in facts, by not N p restricting the value of transfer pricing adjustment to international transactions of the Appellant and thereby making adjustment to third party transactions as well which is against TP principles. Consequential grounds: 5. The Ld. AO have erred in initiating penal proceedings under section 274 read with section 270A of the Act. 6. The Ld. AO have erred in issuing a demand notice under section 156 of the Act. The Appellant submits that each of the above grounds is independent and without prejudice to one another. The ....
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.... it submits that assessee seeks to argue only certain issues in the main grounds of appeal and few comparables in the Additional Grounds. The specific grounds that the assessee wishes to argue are as under: 4. Brief facts of the case are as under: 4.1 The assessee is a Company said to be engaged in the business of manufacturing optical products and providing after- sales support for Carl Zeiss products in India. The return of income was filed by assessee declaring total income of Rs. 51,79,33,480/. The case was selected for scrutiny under CASS and accordingly, notice u/s 143(2) & 142(1) was issued to the assessee. In response to the notices u/s 143(2) and 142(1), the assessee e-filed the requisite submissions on ITBA incorporating the details called for from time to time. During the course of assessment proceedings, the Ld.TPO found that the assessee had entered into international transaction with Associated Enterprise. Accordingly reference was made to the TPO (Transfer Pricing) u/s 92CA(1) of the Act for the determination of Arms Length Price (ALP) for AY 2017-18. 4.2 The Ld.TPO on receipt of the reference called upon assessee to file requisite details in form 3....
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.... 19.23% 14 Larsen & Toubro Infotech Limited 21.50% 15 R Systems International Limited (Segmental) 22.44% 16 Tata Elxsi Limited 23.88% Data place Range OP/OC (%) 6 35^th percentile 6.55% 8 and 9 Median 8.51% 11 65th percentile 12.38% B. Manufacturing segment: The Ld.TPO noted that assessee had selected 8 comparables with a median of 8.30%, the details of which are as under: C. Distribution and sales support services segment: The Ld.TPO noted that assessee had selected 8 comparables with a margin of 6.03% and thus treated its transaction to be at arms length, the details of which are as under: 4.4 Disagreeing with the search process carried out by the assessee under all 3 segments, the Ld.AO conducted fresh search and shortlisted the following set of comparables under all the 3 segments as under: A. SWD Sl. No. Company Name F. Year wise OP/OC (%) Wt. Average 2016-17 2015-16 2014-15 1 Rheal Software Pvt. Ltd. -12.27 3.28 3.01 -1.85 2 Kals Information Systems Ltd 1.37 3.....
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....21 5. On receipt of the order u/s. 92CA, the Ld.AO passed the draft assessment order incorporating the proposed adjustment vide order dated 30.03.2021. On receipt of the draft assessment order, the assessee filed objections before the DRP. 5.1. The DRP after considering the various objections raised by the assessee directed to exclude following comparables under the trading segment on functional dissimilarities which are as under: a) Narang Medical Ltd. b) Kalelker Surgicals Pvt. Ltd. c) Biolitec India Pvt. Ltd. 5.2. The DRP directed the Ld.TPO to include Sagarsoft India Ltd. and Maveric Systems Ltd. under the SWD segment. In respect of comparable Aptus Software Labs Pvt. Ltd. and OFS Technologies Ltd., the DRP directed to verify the margin computation. 5.3. The Ld.AO on receipt of the DRP directions passed the impugned order by making addition in the hands of the assessee at Rs. 19,65,61,201/- 6. The Ld.AR submitted that, while passing the impugned order, the adjustment proposed by the Ld.TPO for manufacturing segment became Nil post DRP directions. The Ld.AR submitted that, the assessee filed rectification petition on 24.02.2022 as some o....
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.... DCIT in IT(TP)A No. 3358/Bang/2018 for A.Y. 2014-15 f) Borqs Software Solutions Pvt. Ltd. in IT(TP)A No. 310/Bang/2021 for A.Y. 2016-17 8.2. He also submitted that all these comparables are also not functionally similar with that of the assessee as these are full- fledged entrepreneurs in the field of software development service segment and delivers a gamet of services to its clients for which there is no segmental reporting available. In respect of functional dissimilarities of these comparables with that of assessee, the Ld.AR relied on the following decisions. a) Yahoo Software Development India Pvt. Ltd. vs. JCIT in IT(TP)A No. 178/Bang/2022 for A.Y. 2017-18 by order dated 11.07.2022 b) GlobalLogic India Pvt. Ltd. vs. DCIT in ITA No. 868/Delhi/2021 for A.Y. 2016-17 c) ADP Pvt. Ltd. vs. DCIT in ITA Nos. 227 & 228/H/2021 for A.Y. 2016-17 d) SanDisk India Device Design Centre Pvt. Ltd. vs. JCIT in IT(TP)A No. 288/Bang/2021 for A.Y. 2016-17 e) Citrix R&D India Pvt. Ltd. vs. DCIT in IT(TP)A No. 2428/Bang/2019 for A.Y. 2015-16 f) Cypress Semiconductor Technology India Pvt. Ltd. in IT(TP)A No. 2427/Bang/2019 for A.Y. ....
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....ms Ltd., Infosys Ltd., Mindtree Ltd. and L&T Infotech Ltd. He brought to our notice that as far as Persistent Systems Ltd. is concerned, the reasoning given for excluding this company for AY 2014-15 will equally hold good for the present year as well. In this regard, our attention was drawn to page 601 of the assessee's PB wherein in the annual report of this company, Notes forming part of financial statement in Note (i) which gives the description of income from software services, there is a reference to revenue from licensing & software, which sufficiently indicates that the assessee is not a pure SWD services provider. It was also brought to our notice that the profit & loss account which is at page 596 read with Notes forming part of the financial statement at page 604 wherein the segmental reporting is not based on different segments and the statement presents a consolidated financial statement without any segmental reporting. This company has also significant RPT transaction of 25% on sales. He pointed out that the TPO & DRP on the application of RPT filter has not expressed any opinion. The ld. DR relied on the order of DRP wherein the DRP has made extensive reference to....
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....ission paid on sales 111.79 Traveling and conveyance 19.27 Total related party transactions (A) 3,891.93 Total Sales (B) 12,424.98 RPT % of Sales (A/B) 31.32% From the above computation, it is clear that the controlled transactions of Persistent constitutes 31.32% of sales. Based on the above, it can be seen that Persistent fails the `RPT to sales ratio' filter applied by the learned TPO and should therefore not be considered as a comparable." 34. This argument has been addressed by the DRP in its order as follows:- "4.4.9 We note that the approach of the TPO in treatment of related party transaction into two sets, are for revenue transactions and other for expense transaction is logical and correct. We also note that the RPT filter was adopted by the TPO was with the above conditions and has adopted consistently. Hence, we do not find any infirmity the approach. Hence, we reject the assessee's plea. We hold that onsite expenses do not adversely affect comparability and hence, such plea is rejected." 35. Further, the assessee had also raised plea with regard to onsite revenue filter by pointing out that onsite r....
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....iteria to select or reject a comparable under Rule I0B(2) of the I.T. Rules. We are of the view that this argument again ignores the fact that the approach of the TPO has been to highlight the fact that there can be no functional comparability, if the assets employed and risks assumed are taken into consideration. It is in that context the TPO has referred to the margins. 67. The companies who generate more than 75% of the export revenues from onsite operations outside India are effectively companies working outside India having their own geographical markets, cost of labour etc., and also return commensurate with the economic conditions in those countries. Thus assets and risk profile, pricing as well as prevailing market conditions are different in predominantly onsite companies from predominantly offshore companies like the taxpayer. Since, the entire operations of the tax payer are taking place offshore i.e. in India; it is but natural that it should be compared with companies with major operations offshore, due to the reason that the economics and profitability of onsite operations are different from that of offshore business model. As already stated the Assessee has ....
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.... company was excluded from the list of comparable companies with reference to SWD services provider such as the assessee. The ld.Counsel pointed out that though this decision was rendered with reference to AY 2011-12, the same reasoning would apply to AY 2015-16 also and in this regard, he drew our attention to page 696 of assessee's PB, which gives the details of the revenue generated by this company without any segmental break-up. Our attention was also drawn to page 682 of PB which shows that there is substantial onsite revenue activity as well as cost incurred on onsite software development. We notice from page 676 of assessee's PB that this company as part of its operating profit in Schedule- O of profit & loss account contains expenditure for 'cost of bought out items for resale' and this is a significant part of the operating expenditure. When we see the revenue in Schedule M of the profit & loss account, there is no break-up of the revenue with regard to software services and software product. In our opinion, this distinction is enough to exclude this company from the list of comparable companies as held by the Hon'ble Delhi ITAT in the case of Saxo Indi....
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....ideo surveillance management, recording and analytic products and solutions. It has filed 4 patents in India and US so far in the area of Video analysis. - Ownership of intangibles in the form of intangible property. Significant onsite activity: - 46% of revenue earned under Onsite model. - Incurred overseas branch office expenses amounting to INR 1582 crores - Receives incentives from State of Florida in relation to the development center located overseas. Lack of segmental data - Does not maintain segmental information in respect of profitability reported from business activities in the nature of infrastructure management services, technology consulting and SAP services. - Acquisition of subsidiary - Discoverture Solutions LLC. 42. The DRP while dealing with the aforesaid objections has merely taken the view that the presence of IPR revenue was insignificant and so also expenses of brand value, R&D & intangibles. More importantly, the DRP did not dispute the presence of 46% of revenue from onsite model, but went on to hold that the presence of revenue is not sufficient to exclude a company, when it i....
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....ed into diverse activities other than software development services. 11. The Ld. D.R. submitted that the ld DRP, on perusal of the annual report, noted that this company is engaged primarily in rendering software services and other related IT services. As per information at page 73 the company is a service company primarily rendering software services. Accordingly, it does not hold any physical inventories. As per the background information given at page123 of the annual report, the company is engaged in rendering software services, business consulting in the area of enterprise transformation, change and performance management and providing related IT Services. This fact is further supported by the information disclosed at page 50 and 51 of the annual report that the whole revenue of the company is derived from IT consultancy, software development and related services. Further at page 82 & 83 of the consolidated annual report, it is stated that "The group's activities involve predominantly providing software related services, which is considered to be a single business segment since these are subject to similar risks and returns. Accordingly, software services comprise....
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....f Intellect Bizware Services pvt Ltd, which would not affect the profitability of the company in the near term. Further, the assessee also could not point to any information to show, that on account of such acquisition, the profit margin of this company was materially affected. The increase in business or turnover on account of such acquisition will be reflected in the financial statement of such subsidiary. Thus, the ld DRP was of the view that the acquisition as such has not materially affected the profitability of the company, and hence, it cannot he excluded as comparable. 11.2 The ld DR further stated that with regard to pleas of R&D, the ld DRP noted that the R&D activities are in the nature of routine activities to improve service delivery and there is no specific debit towards R & D in the P & L --account. These indicate that the R&D activities are towards routine business activity. The company does not own intangibles except for computer software licenses. Therefore, the ld DRP was of the view that this company is comparable to the assessee company. The ld DRP also noted that the assessee has failed to establish that such differences, if any, on account of R & D /....
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....he company which is made available at page A412 of the paper book wherein Nihilent Ltd. is shown to be engaged in providing advanced analytics, artificial intelligence, blockchain, business intelligence, data signs, cloud services etc. The annual financials of this company available at page A412 & A413 of the paper book shows that it is rendering Enterprise transformation and change management, Digital transformation services and Enterprise IT services but segmental financials are not available as is apparent from its financials available at page A305, A412 & A413 of the paper book. When this company is into various segments but segmental financials are not available it cannot be a valid comparable vis-à-vis assessee which is a routine software development service provider working on cost + markup model, hence ordered to be excluded." "Infobeans Technologies Ltd. (Infobeans) 49. The assessee sought exclusion of Infobeans on the ground that it is also functionally dissimilar being into providing business IT services (CAD) (application development and maintenance, Big Data, UX and UI, Automation engineering services, including product engineering and lifestyl....
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....development was upheld: - SAP Labs India Pvt Ltd [TS-506-ITAT-2022(Bang)-TP]/ IT(TP)A No.606/Bang/2021 and IT(TP)A No.2510/Bang/2019 dated 21.7.2022. - The assessee placed reliance on the following ruling wherein it was upheld that testing services are distinct from the software development life cycle and cannot be considered to be akin to software development services and comparables engaged in testing services have been excluded: - M/s. Advice America Software Development Center Pvt. Ltd. vs. The Income Tax Officer, Ward 1(1)(1)(1) [IT(TP)A No.2531/Bang/2017 dated 23.5.2018] Extracts from the annual report are provided below: (Page 47 of Annual report - FY 2016-17) (Page 46 of Annual Report - FY 2016-17) (Page 46 of Annual report - FY 2016-17) (Page 47 of Annual report - FY 2016-17) 14. The Ld. D.R. submitted that the ld DRP on perusal of the annual report, he noted that the company is into software development activities. The company as per the Note 14 to financial statements give at page 72 of the annual report derives income from software development only. As regards employment cost filter, the company passes the employment cost ....
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....nsuring efficiency and quality. Therefore, they are to be taken as routine activities in enhancing the quality of delivery of services. In view of the above these pleas were rejected by the ld DRP. Subjected to the above discussion, the selection of this company was upheld by the ld DRP. 15. We have heard the rival submissions and perused the materials available on record. In our opinion, this comparable fails the functionality test and this company OFS Technologies Ltd. is not functionally similar and deserves to be excluded." Respectfully following the above, we direct exclusion of Nihilent Ltd. and OFS Technologies Ltd. from the final list. Accordingly, ground nos. 4.1, 4.3 to 4.4 and additional ground nos. 1(a) (six comparables) that was sought for exclusion stands allowed. 9. In Additional Ground no. 1(b), assessee is seeking inclusion of only two comparables being Maveric Systems Ltd. and Evoke Technologies Pvt. Ltd. 9.1. The Ld.AR submitted that the Ld.TPO rejected Maveric Systems Ltd. by observing that it is functionally different as it carries out software testing services and product development. He submitted that on perusal of the annual report of th....
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..... It is the submission of the Ld.AR that identical issue has been dealt with in this decision and has relied on the decision of Coordinate Bench of this Tribunal in case of Maxim India Integrated Circuit Design Pvt. Ltd. vs. DCIT in IT(TP)A No. 1573/Bang/2017 by order dated 02.11.2020, the observations of this Tribunal in Evolving Systems Networks India Pvt. Ltd. vs. DCIT (supra) are as under: "6. As far as the merits of ground No.4(h) is concerned, the DRP dealt with the issue in the following manner: "2.9 Ground of Objection No. 9: The learned TPO and learned AO has erred, in law and in facts, by considering provision for bad and doubtful debts as non-operating expenses. Having considered the submissions, this Panel has been consistently holding that provisions are not an ascertained liability which is not allowable for purpose of computation of business profit under the IT Act. We are also of the view that the provision for bad & doubtful debts is not made in all the cases. There is no rationale to consider such provision as operating in nature. Even otherwise, for the comparability analysis, such provisions are excluded from the tested par....
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.... considered to be operational in nature. He placed his reliance on the decision rendered by Mumbai bench of Tribunal in the case of Telcordia Technologies India P Ltd (22 taxmann.com 96/137 ITO 1) and Thyssen Krupp Industries Pvt Ltd (2013)(33 taxmann.com 107). 14. We heard the parties on this issue and perused the record. We notice that an identical issue has been examined by the co- ordinate bench in the case of Brocade Communications Systems (P) Ltd (supra) and it was decided as under:- "47. In Ground No. 10 the assessee pointed out to the mistakes in computation of PLI. It was submitted that the TPO has considered provision for doubtful debts and provision for doubtful advances are non-operating in nature and the action was upheld by the DRP. In this regard it was submitted that provision for doubtful debts is a provision which is to be made as a part of the operating activities of business governed by the principles of prudence, and therefore it is not correct to contend that the same is non-operating in nature. Reliance in this regard is placed on the decision of the Delhi Bench of the Tribunal in the case of Rolls-Royce India (P.) Ltd. v. DCIT [2016] 69 tax....
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.... of prudence. We, accordingly, direct that this provision be treated as part of operating expenditure and treatment be made accordingly, because, in any view of the matter, the safe harbor rule is not applicable for the current year under consideration. In the result, this ground is allowed." 15. Before us, the Ld D.R placed his reliance on the decision rendered by Mumbai bench of Tribunal in the case of Thyssen Krupp Industries Ltd (supra). We notice that the assessee has claimed that the Provision for doubtful debts as non-operating in nature, which was not accepted by the TPO. The Tribunal accepted the submission of the assessee and accordingly it has held that it is a non-operating in nature. Thus, we notice that the above said decision has been rendered by the Mumbai bench of Tribunal in a different context. In the case of Telcordia Technologies India P Ltd, the Tribunal has made following observations in respect of Provision for doubtful debts, while considering the company named M/s R Systems International Ltd:- "While working out the operating profit, only items of receipts and expenditure, which have direct relation for determining the profit has to be ta....
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....development segment of the assessee is concerned, there is no provision for bad and doubtful debts. The learned Counsel for the assessee filed before us copy of the decision of the Hon'ble Karnataka High Court in the case of Principal CIT Vs. Business Process Outsourcing India Pvt. Ltd., (2018) taxcorp (DT) 73195 (HC Karnataka) wherein in an appeal against the order of the Tribunal holding that provision for bad and doubtful debts should be considered as part of the operating expenditure, the Hon'ble High Court confirmed the order of the Tribunal and dismissed the appeal of the Revenue as one not giving rise to any substantial question of law. 9. In the light of the aforesaid decision, we are of the view that provision for bad and doubtful debts should be treated as operating expense while computing the PLI OP/OC of the comparable companies which ultimately remains for comparison. We hold and direct accordingly. " 9. Learned DR relied on the order of the DRP. 10. We have given a very careful consideration to the rival submissions. We find that the DRP in rejecting the plea of the assessee has placed reliance on the decision of Mumbai Bench of the Tribunal....
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..... AO/ TPO/ DRP have erred, in law and facts, by not considering the segmental N.P. turnover of the Appellant as well as the comparable companies from software development services, while applying the turnover filter 2. The Ld. AO/ TPO/ DRP have erred, in law and in facts, by erroneously considering bad debts and provision for bad debts as non-operating expenses while computing the operating margins of the comparable companies. In the above circumstances the Petitioner prays that this Hon'ble Tribunal be pleased to (i) admit and adjudicate the above additional ground, (i) pass any other order that may be required in the circumstances of the case and render justice. |N.P. Dated at Bengaluru on this 17 day of February 2023 C Document 3Email Bangalore Benches ITAT, Bangalore Benches RE: Carl Zeiss India (Bangalore) Private Limited - AY 2017-18-IT(TP)A No. 192/BANG/2022 From: Akshay Uppall Wed, Apr 12, 2023 06:50 PM Subject: RE: Carl Zeiss India (Bangalore) Private Limited - AY 2017-18- 91 attachment IT(TP)A No. 192/BANG/2022 To: Bangalore Benches ITAT, Bangalore Benches Cc: Nageswar Rao The Hon'ble Members Bench 'C' Income Tax Appellate T....
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....tree Limited iii. Persistent Systems Ltd. iv. Infosys Ltd. v. Nihilent Ltd. Document 4 1(b) 2 vi. OFS Technologies Ltd. In support of Appellant's contention, specific reliance is placed on following decisions of Bangalore Tribunal: Yahoo Software Development India Pvt. Ltd. vs JCIT [IT(TP)A No. 178/Bang/2022 for AY 2017-18] - Para 4 & 5- P.N. 3881-3884 of Paperbook II Caselaw Compendium- Part 6 filed on 17.02.2023 [for exclusion of Larsen & Toubro Infotech, Mindtree Ltd., Persistent Systems, Infosys Ltd.] Subex Ltd [IT(TP)A No. 282/Bang/2022 for AY 2017-18] - Para 5 & 12 to 12.1 -P.N. 3827 to 3834 Paperbook II - Caselaw Compendium - Part 6 filed on 17.02.2023 [for exclusion of Nihilent Ltd. & OFS Technologies Ltd.] Out of 6 comparables mentioned in ground no. 1(b), Appellant seeks exclusion of following 2 comparables (refer S.Nos. 23 & 24 of comparable chart filed on 17.02.2023 for detailed contentions): i. Maverick Systems Limited . Evoke Technologies Private Limited Ground relating to incorrect computation of operating margin of comparable companies to be adjudicated along with additional ground no. 2 filed on 20.02.202....
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....ion of the information contained in this communication nor for any delay in its receipt. Document 5 Weighted average of S. No. Name of the company operating profits on operating costs (%) 1 Priman Instruments Private Limited -0.44% 2 PMT Health Care Private Limited 2.97% 3 Confident Dental Equipments Limited (Segmental) 6.39% 4 Bhat Bio-Tech (India) Private Limited 8.12% 5 Gansons Limited 8.47% 6 Allengers Medical Systems Limited 8.96% 7 GMM Pfaudler Limited (Segmental) Stericon Pharma Private Limited 15.71% 26.82% Data Place Range OP / OC (%) 3 35th Percentile 6.39% 4&5 Median 8.30% 65th Percentile 8.96% Document 6 5. No. Name of the company Weighted average of operating profits on operating revenue (%) 1 Frontline Electro Medical Limited 2.25% 2 Kox Med & Lab Private Limited 2.83% 3 Pika Medical Private Limited 4.06% 4 Sataytej Commercial Company Limited 4.52% 5 Invas Technologies Private Limited 6.44% 6 Confident Sales India Private Limited 6.75% 7 ADS Diagnostic Limited 7.10% 8 V....
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....ch needs to be achieved. Carl Zeiss India is not involved in the conceptualisation of the product/solution which is required by Carl Zeiss Group. Functional specification and requirement analysis L Functional specification and requirement analysis is the process by which a firm prepares a set of documents that describes what a particular product or service should be or do and also describes various inputs that can be provided to the software system and how the system responds to those inputs. All possible requirements of the system to be developed are captured in this phase. Requirements are set for functionalities and constraints that the user expects from the system. Carl Zeiss Group post generation of the concept finalise the features, determines the functional/component specifications and undertakes the requirement analysis of the prototype required from Carl Zeiss India. The prototype and functional specifications would be passed on to Carl Zeiss India for execution. The specifications are provided to Carl Zeiss India in the form of project plan giving the detailed component/functional requirements and work flow details. The respect....
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....ntrol equipment and qualified inspectors. With respect to the software development services rendered, Carl Zeiss India would be responsible for ensuring that the requisite quality/performance standards are met and it is free of error and adhere/confirms to functional specifications provided by Carl Zeiss Group. The team which undertakes the product development also undertakes the testing of the module developed by it. During the testing stage if any errors are found then it is reported to the development team for corrective action. Hence, Carl Zeiss India is responsible for testing of the software developed and passes it on to the quality assurance team in Carl Zeiss Group. Once the modules are integrated into a final product, final testing of the product is performed to ensure its meets the global quality standards. Carl Zeiss Group is responsible for the overall testing of all modules and final product to be sold to the customers. Integration Integration is a software development process where individual program units/ modules are combined and tested as groups in multiple ways. Carl Zeiss Group is engaged in providing products to its cust....
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.... risk Market/Business risk arises when a corporate is subject to adverse sales conditions due to either increased competition in the marketplace, adverse demand conditions within the market, or the inability to develop markets or position products to service targeted customers. Carl Zeiss Group is responsible for marketing its products worldwide. It bears significant risks of the customer contracts, faces the competition and is responsible for penetrating into markets and introducing new products/technology to widen its customer base. Accordingly, Carl Zeiss Group bears the market/ business risks. Carl Zeiss is currently developing new software for new product, which is under development and not yet launched in the market. The initiative being in a test and exploratory mode, the market viability is yet to be assessed. Carl Zeiss Group is responsible for introducing this new product in the market and widen its customer base. Accordingly, Carl Zeiss Group would bear the market/ business risks in relation to the new product to be launched. Carl Zeiss India does not bears market risks, since it provides services only to Carl Zeiss Group and doe....
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....rty software service providers may bear in relation to receivables from customers. 4.3.3.6 Service liability risk Service liability risk is borne by a company when its service offerings fail to perform at accepted or advertised standards and the company is required to compensate the customer or undertake defect resolution at its own cost. Carl Zeiss India provides services exclusively to Carl Zeiss Group. Carl Zeiss India undertakes the software development services based on the instructions received from Carl Zeiss Group. Carl Zeiss India is compensated for work done even if there are any defects, or if substantial re-working is required. Therefore, Carl Zeiss India does not bear the service liability risk. 4.3.3.7 Product liability risk Product liability and warranty risk refers to the risk associated with failure of a product or the possibility of facing legal action from customers due to defects in the products provided. Document 14 Carl Zeiss Group owns all the IPR in the products and bears the product liability risk of the non- performance of the product sold to the customer. Since, Carl Zeiss India does not contract with customers,....
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....anding our service offerings We intend to continue expanding our range of service offerings in order to increase business from our existing chents and acquire new chents. We intend to therefore continue to retain and grow our expertise in conventional IT platforms while investing in newer platforms, analytics, big data, mobile systems, social media, natural language programming the internet of things and predictive BI Document 19 Nihilent India provides a comprehensive range of process and technology-led transformation services leveraging advanced analytics, artificial intelligence, blockchain, business intelligence, data science, cloud services, lot, and machine learning. We focus these services to Banking, Financial Services, Insurance, Retail, Manufacturing, Media, and Healthcare organizations. Document 20 Service Offerings Mobile App Development Data Analytics Independent Testing 圀 Commercial Product Development Digitalization DevOps Document 21 BUSINESS STRATEGY: Product Strategy - Enterprise Resource Planning (ERP) Our ERP product development vertical is focused on addressing the specific needs of the supply chain an....