TaxTMI 
TaxTMI 
2024 (7) TMI 394
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.... 2.2 The Ld.AR further submitted that Ground no. 6 also, the assessee has challenged two comparables on functionality being Lycatel BPO Pvt. Ltd. and Cheers Interactive (India) Pvt. Ltd. which did not form part of the original ground of appeal. It is an admitted position that the assessee did not file application for admission of these comparables at the time of hearing. Accordingly, the two comparables are dismissed as not pressed. Brief facts of the case are as under: 3. Assessee, a private limited company, having its registered office in Bangalore, was incorporated on 25th February 2014. WPO India is a wholly owned subsidiary of M/s Workplace Options Finance S.A.R.L. 3.1 The assessee is an independent provider of integrated employee wellbeing solutions to Workplace Benefits LLC (hereinafter referred to as "Associated Enterprise"). It is submitted that the assessee carries on business as service provider to help employees balance their work, family and personal life, to participate in the affiliation, accreditation, examination and certification, create and enhance web based applications to bring new solutions to human resource departments of clients and work with globa....
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....12.22 4 Fuzen Software Pvt. Ltd Fails FAR Analysis 15.75 5 Tech Mahindra Business Services To be rejected for High turnover 18.52 6 Infosys B P M Services Pvt. Ltd. To be rejected for High turnover; Fails RPT Filter; Fails FAR Analysis 20.95 7 CES Ltd (Seg.) Accepted 21.77 8 Manipal Digital Systems Pvt. Ltd. Fails FAR Analysis; Fails FAR Analysis 23.54 9 Domex E Data Pvt Ltd Accepted 26.34 10 Vitae International Accounting Services Pvt Ltd Fails FAR Analysis 27.35 11 A G S Health Pvt. Ltd. To be rejected for High turnover; Fails FAR Analysis 27.64 12 Access Healthcare Services Pvt. Ltd To be rejected for High turnover; Fails FAR Analysis 39.03 13 Inteq B P 0 Services Pvt. Ltd. Accepted 39.15 14 Motif India Infotech Pvt. Ltd. To be rejected for High turnover 45.72 15 Eclerx Services Limited To be rejected for High turnover; Fails RPT Filter; Fails FAR Analysis 46.85 16 MPS Ltd To be rejected for High turnover; Fails FAR Analysis 61.83 35th Percentile 20.95 Media....
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....7(1)(1) that reads as under: 4.1.6 The Ld.DR submitted that the DCIT in the said letter has relied on the circular dated 06.09.2021 wherein, in para 3 has identified the technical reason for which the pendency of an assessment order in certain cases could not have been created for various reasons as the case may be, and therefore, said case was transferred by DCIT in charge of NFAC which is as per the procedure specified in letter no. F.No. 225/97/2021/ITA-II dated 06.09.2021 (supra). 4.1.7 We have perused the above submissions of both sides. Apparently there was technical glitches faced by the revenue to which the transfer by PCIT to the jurisdictional Assessing Officer could not have been reflected on the ITBA portal. It is categorically clear from the circular dated 06.09.2021 reproduced hereinabove. We further note that in the letter dated 01.08.2023 issued by the DCIT, Circle - 7(1)(1) reproduced hereinabove, in para 4, the order sheet entry transferring the case to the jurisdictional Assessing Officer has been recorded which was with the approval of CBDT. We therefore do not find any merit in Ground no. 2 raised by the assessee and the same is dismissed. 5. Ground....
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.... in favour of the Revenue, respectively. The ITAT Bangalore Bench in the case of Dell International Services India (P) Ltd. Vs. DCIT (2018) 89 Taxmann.com 44 (Bang-Trib) order dated 13.10.2017, took note of the decision of the ITAT Bangalore Bench in the case of Sysarris Software Pvt.Ltd. Vs. DCIT (2016) 67 Taxmann.com 243 (Bangalore-Trib) wherein the Tribunal after noticing the decision of the Hon'ble Delhi High Court in the case of Chryscapital (supra) and the decision to the contrary in the case of CIT Vs. Pentair Water India Pvt.Ltd., Tax Appeal No.18 of 2015 dated 16.9.2015 wherein it was held that high turnover is a ground to exclude a company from the list of comparable companies in determining ALP, held that there were contrary views on the issue and hence the view favourable to the Assessee laid down in the case of Pentair Water (supra) should be adopted. The following were the conclusions of the Tribunal in the case of Dell International (supra): "41. We have given a very careful consideration to the rival submissions. ITAT Bangalore Bench in the case of Genesis Integrating Systems (India) Pvt. Ltd. v. DCIT, ITA No.1231/Bang/2010, relying on Dun and Bradstreet's ....
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....-jurisdictional High Courts. The view expressed by the Bombay High Court is in favour of the Assessee and therefore following the said view, the action of the CIT(A) excluding companies with turnover of above Rs.200 crores from the list of comparable companies is held to correct and such action does not call for any interference." 19. The Tribunal in the case of Autodesk India Pvt. Ltd. Vs. DCIT (2018) 96 Taxmann.com 263 (Bangalore-Tribunal), took note of all the conflicting decision on the issue and rendered its decision and in paragraph 17.7. of the decision held as that high turnover is a ground for excluding companies as not comparable with a company that has low turnover. The following were the relevant observations: "17.7. We have considered the rival submissions. The substantial question of law (Question No.1 to 3) which was framed by the Hon'ble Delhi High Court in the case of Chryscapital Investment Advisors (India) Pvt.Ltd., (supra) was as to whether comparable can be rejected on the ground that they have exceptionally high profit margins or fluctuation profit margins, as compared to the Assessee in transfer pricing analysis. Therefore as rightly sub....
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....endered in the case of M/S.NTT Data (supra), Societe Generale Global Solutions (supra) and LSI Technologies (supra) were rendered later in point of time. Those decisions follow the ratio laid down in Willis Processing Services (supra) and have to be regarded as per incurium. These three decisions also place reliance on the decision of the Hon'ble Delhi High Court in the case of Chriscapital Investment (supra). We have already held that the decision rendered in the case of Chriscapital Investment (supra) is obiter dicta and that the ratio decidendi laid down by the Hon'ble Bombay High Court in the case of Pentair (supra) which is favourable to the Assessee has to be followed. Therefore, the decisions cited by the learned DR before us cannot be the basis to hold that high turnover is not relevant criteria for deciding on comparability of companies in determination of ALP under the Transfer Pricing regulations under the Act. For the reasons given above, we uphold the order of the CIT(A) on the issue of application of turnover filter and his action in excluding companies by following the ratio laid down in the case of Genisys Integrating (supra)." 20. In view of the aforesaid ....
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....der dated 09.01.2023 ii) Nortel Networks India P. Ltd. in ITA Nos. 4765/Del/2011 & 427/Del/2013 for A.Ys. 2007-08 & 2008-09 iii) M/s. Bobst India Pvt. Ltd. in ITA No. 1380/Del/2010 for A.Y. 2006-07 iv) Verient Systems (India) Pvt. Ltd. vs. ITO in ITA No. 5927/Del/2010 We note that under similar circumstances, Coordinate Bench of this Tribunal in case of Altair Engineering India Pvt. Ltd. vs. ACIT (supra) has rejected this comparable as there are no segmental details available in respect of the various services rendered. Nothing contrary has been filed by the Ld.DR. Respectfully following the above view, we also direct the Ld.AO/TPO to exclude this comparable from the final list. Accordingly, ground no. 4 raised by assessee stands partly allowed. 7. Ground no. 5 raised by assessee is seeking inclusion of following comparables. a) Digicall Global Pvt. Ltd. b) I G T Solutions Pvt. Ltd. c) Sundaram Business Services Ltd. d) Suprawin Technologies Ltd. e) Unicita Consulting Pvt. Ltd. 7.1 It is submitted that the DRP has not considered this comparable even though the objections were raised and various judi....
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.... (i) None of the differences, if any, between the transactions being compared, or between the enterprises entering into such transactions are likely to materially affect the price or cost charged to paid in, or the profit arising from, such transactions in the open market; or (ii) Reasonably accurate adjustments can be made to eliminate the material effects of such differences." 18. In such a scenario there would remain no comparable uncontrolled transactions for the purpose of comparison. The transfer pricing exercise would therefore fail. Therefore, in keeping with the OECD guidelines, endeavor should be made to bring in comparable companies for the purpose of broad comparison. Therefore the working capital adjustment as claimed by the assessee should be allowed. We hold and direct accordingly. 19. In the result, the appeal of the assessee is allowed." 8.2 In view of the above order of the Tribunal, we inclined to remit the issue to the file of AO/TPO to determine the correct working capital adjustment. Accordingly, this ground raised by assessee stands allowed for statistical purposes. 9. Ground no. 8 is in respect of non-granting of set o....
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....ess Healthcare Services Pvt Ltd (vi) Motif India Infotech Pvt Ltd (vii) Eclerx Services Ltd (viii) MPS Ltd Ground No. 4: The Ld. TPO and the Hon'ble DRP erred on facts and law by comparing the Appellant with the following companies which have an entirely different functional and risk profile and also not comparable on account of factors like export filter, significant RPT, etc., ignoring the fact that some of these were held as not comparable to a ITeS company. (i) Microland Ltd. (ii) Fuzen Software Pvt. Ltd. (ii) Vitae International Accounting Services Pvt. Ltd. (iv) Infosys BPM Services Pvt. Ltd. ((v)) Manipal Digital Systems Pvt. Ltd. - (vi) AGS Health Pvt. Ltd. (vii) Access Healthcare Services Pvt. Ltd. (viii) Eclerx Services Ltd. (ix) MPS Ltd. Not preved there two companies. there are not part of original Ground Ðтравм 21/11/2023 Maulbaharme Document 3 Ground No. 5: The Ld. TPO and the Hon'ble DRP has failed to pass a speaking order by arbitrarily rejecting the below companies without providing cogent reasons for each comparable: Digicall Global Pvt. Ltd. (1) IGT Sol....
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.... Road, Koramangala, Bengaluru-560095 Email: [email protected] F.No. Misc. ITAT /DCIT-C-7(1)(1)/2023-24 To, The Commissioner of Income Tax, Dated: 01.08.2023 ITAT-3 Bangalore. Madam, 2. Sub: Request for comments in the case of M/s. Workplace Options India Pvt. Limited (PAN- AABCW5081H) for AY 2018-19-reg Ref: i) CIT(ITAT-3), Bengaluru letter in F.No. 3/CIT/ITAT-3/Bang/2023-24 dated 13.07.2023 Kindly refer to the above. Regarding the appeal of the assessee. M/s Workplace Options India Pvt. Limited, before the Hon'ble ITAT. comments have been sought on below grounds of appeal raised by the assessee "a) Circular/Instruction of CBDT. New Delhi which authorizes NeFAC to transfer a case to JAO and b) The specific order by which the case of Workplace Options India Pvt Ltd for AY 2018-19 was transferred by NeFAC to JAO" 3. Comment of AO: The assessment proceedings u/s 143(3) which was pending before the NeFAC (Faceless Assessing Officer-FAO) have been transferred u/s 144B (8) of the Act with approval of CBDT to the Jurisdictional Assessing Officer (JAO) for completion of assessment proceedings. ....
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....ding exclusions to section 1448 of the Act. The Faceless Assessment Scheme, 2019 (the Schemel has been incorporated in the Act vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisional Act, 2020. Section 1448 of the Act pertaining to Faceless Assessment has been inserted by the said amendment w.e.f. 01.04.2021 2. The Central Board of Direct Taxes vide Order F.No. 187/3/2020-ITA-I dated 13 August, 2020 (the Order) read with order under section 119 of the Act regarding mutatis mudandis application of Orders, Circulars etc. issued in order to implement the Scheme to Facelesa Assessment u/s 144B of the Act, F.No. 187/3/2020-ITA-1 dated 31 March, 2021 directed that all the Assessment Orders shall be passed by the National Facelas Assessment Centre (NaPAC) u/s 144B of the Act except as under L Assessment orders in coses assigned to Central Charges. 3. # Assessment orders in cases assigned to International Tax Charges. In partial modification of the said Order, the Central Board of Direct Taxes in exercise of powers under section 119 of the Act, hereby directs that in addition to exceptions & provided in Para 2 ....
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....e CBOT order Document 10 dated 06.09.2021 mentions cases where the transfer can be made to JAO by FAO. The same needs to be considered as order for valid transfer u/s 1448(8), 3. In regards to the contentions of the appellant are concerned in para 4, regarding the technical reason, the same are clearly mentioned in the IIBA remarks which was already furnished earlier. The operative part of the remark being "System/hierarchy is under implementation. The requirement for proving the technical reason is not necessary and the TIBA remarks are self-sufficient and are to be treated as reasons recorded for such transfer. The plea of the appellant needs to be dismissed in this regard. 4. Further, as per the contention in Para 2, the same is not relevant as the necessary CBDT order is sighted and provided by the undersigned. All the facts pertaining to the case along with relevant screenshots of ITBA remark and relevant CBDT order has been furnished by this office in earlier correspondences. Submitted for your land consideration and perusal Yours faithfully. Ha/Nithan Raj TN, IRS उप आपकर आयà¥à¤•à....
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...., elder and adult development care, daily living services, smoking cessation, personal health and wellness Document 12 8.11 Service delivery analytical services such as global consultation to enhance research and development, training, skill development, course accreditation other required specializations in specially identified employee assistance program, work-life, wellness sectors, program specific compliance, analytics client specific operational compliance to service level agreements Global implementation services as development of appropriate program transfer protocols, training conventions, orientation presentation: Development of service quality standards, client satisfaction, quality assurance surveys, analysis, international training global program development, client training Service delivery counseling services such as behavioural health services comprising communication, short term counseling, addressing mental fitness, mental wellness information, call center information, critical incident triage, incident case management, behavioral health clinician certification review, various web based directory and management ser....
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....e of manufacturing processes WPO India's a service provider to its associated enterprises as per specifications and training from them. Hence associated enterprises, being the owner of the product and technology associated with the products would solely bear the risk of technological obsolescence of its products. Political Risk: This primarily arises because of the operating in geographical jurisdictions with unstable political regimes and unfavourable Government economic policies. WPO India does not have political risks since all operating costs are captured for the purpose of recovery from the associated enterprises. The above stated risks have been summarized in the table below Document 14 Risks Assumed WPO India Associated Enterprises No Foreign Exchange Risk Yes Legal and Statutory Risk Yes No Manpower Risk Market Risk Yes No Yes No Technology Risk No Yes Political Risk No No 8.12 Taking into consideration the above parameters, WPO India can be classified as a risk mitigated service provider to its associated enterprise. ASSETS EMPLOYED: Tangible Assets 8.13 During the....