TaxTMI 
TaxTMI 
2024 (7) TMI 708
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....4C(13) read with section 144B of the Income Tax Act, 1961 ("the Act") for Assessment Years 2016-17 pursuant to the directions issued by Dispute Resolution Panel, Mumbai ("DRP"). 2. The Assessee company was incorporated in the year 2012 and it is engaged in providing information technology support services to it associated enterprises. The return of income of the assessee was filed on 30/11/2016 declaring a total income of INR 5,30,84,850/-. The assessment was concluded at an income of INR 7,35,99,720/- after making an adjustment on account of transfer pricing to the extent of INR 2,05,14,870/- on transaction of information technology support services. 3. During the course of hearing before us, the Ld. Counsel for the assessee, Shri Aj....
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....ies as comparable with a mean of 28.90%. An adjustment of INR 4,64,42,458/- was proposed by the TPO in Transfer Pricing Order dated 30thOctober 2019. 5. The assessee approached the Ld. DRP. It was pointed out before the Ld. DRP that 2 new companies introduced by the Ld. TPO viz. (i) Manipal Digital Systems Pvt. Ltd. and (ii) Syntel Solutions India Pvt. Ltd. are not comparable and therefore there would be only 2 comparables selected by the assessee viz. (i) CG CAK Software & Exports Limited and (ii) RS Software India Ltd. left for the purpose of comparability. Before the Ld. DRP the assessee furnished additional evidence and a new set of comparables was proposed in addition to the 2 comparables of the assessee. Ld. DRP sought remand repor....
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....arable the Ld. TPO/AO recomputed the adjustment at INR 2,05,14,870 using the median of 21.14% as the arm's length margin. Final assessment order was passed by Ld. AO/NeAC on 29th April 2021 making an adjustment of INR 2,05,14,870 and determining the total income at INR 7,35,99,720/-. 8. Before us the Ld. AR pointed out that the assessee is aggrieved by the inclusion of 4 comparables cherry picked and included by the Ld. TPO. The 4 companies are listed below: S. No. Name of the company Margin 1 Nihilent Ltd. 25.59 2 Infobeans Technologies Ltd. 33.42 3 Thirdware Solutions Ltd. 39.90 4 Cybercom Datamatics Information Solutions Ltd. 84.37 9. Ld. AR, during the course of hearing, furnished a cha....
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....mmerce. Further reference has been made to Page No.2566 of the Factual Paper book to demonstrate that Info beans provides services in the nature of: software engineering services primarily in Custom Application Development (CAM), enterprise mobility and Big Data Analytics (BDA).Reference has also been made to page 2576 to show that there are no segmental accounts drawn. 9.3 Thirdware Solutions Ltd. It is argued that this company is engaged in diversified dissimilar activities and there is a lack of segmental accounts. Reference has been made to Page No.2791 of Factual Paperbook to demonstrate that company is engaged in the business of Software development and Consultancy services. Further reference has been made to Page No. 2802/ 2803....
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....ider in the information technology sector for which segmental data is not available. Reference is also made to Page 2847 of Factual Paperbook to highlight that the company does not prepare a segmental account, stating that principal business of the company is providing technical and software services, however, as mentioned above, the functions are vastly different than that of assessee. 10. On the basis of the above submissions Ld. AR argued that since these 4 companies are functionally different these companies ought to be excluded. Ld. DR on the other hand vehemently argued and relied up on the order of the lower authorities. 11. We have considered the arguments of both the parties and given our thoughtful consideration to the docum....