TaxTMI 
TaxTMI 
2024 (9) TMI 1105
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....e assessment year 2018-19, under section 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (for short "the Act"), assessee filed this appeal. 2. At the outset, learned AR submitted that a delay of 15 days occurred in filing the appeal due to the covid complications suffered by the concerned persons and submitted that a meritorious case may not be thrown out at the threshold due to the delay of only 15 days. He further submitted that the assessee does not stand to gain by allowing the time to lapse. Though the learned DR resisted the condonation of delay the fact remains that the plea of the assessee that the concerned persons suffered covid related complications, does not appear to be anything abnormal or unusual. Taking a l....
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....ch an amount to the income of the assessee. 6. Aggrieved, assessee preferred objections before the learned DRP and challenged, insofar as this appeal is concerned, the inclusion of Tech Mahindra Business Services Ltd., Infosys BPM Ltd., Vitae International Accounting Services Pvt. Ltd., E-Clerx Services Ltd., Domex E - Data Pvt. Ltd., MPS Ltd., and Motiff India Infotech Pvt. Ltd., on the grounds of huge turnover, brand value, carrying huge R&D facilities, functional dissimilarity etc. Learned DRP declined to delete these entities by rejecting the contentions of the assessee. Final assessment order was passed on 18/07/2022, carrying out the directions of the learned DRP. Hence, this appeal. We shall now proceed to deal with the excludabil....
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....the Tribunal that the application of tolerance range of turnover of ten times on both sides of assessee's turnover was proper. Same was the view taken by the Hon'ble Karnataka High Court in the case of PCIT vs. Swiss Re Global Business Solutions India (P) Ltd., (2018) 96 taxmann.com 643 (Karnataka). Consistent with the said view, the Hyderabad Bench of the Tribunal also in the case of iMedx Information Services (P) Ltd., vs. DCIT (2023) 150 taxmann.com 217 (Hyderabad - Trib.) held that the application of tolerance range of turnover of ten times on both ends to fix the turnover filter would meet the ends of justice. 10. Per contra, learned DR vehemently disputed the objection of the assessee basing on the turnover. She placed reliance on ....
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.... India Private Ltd., (supra), we hold that the turnover is a relevant criteria for choosing companies as comparables in determining the ALP in Transfer Pricing cases. 13. Now turning to the next question as to the appropriate turnover filter, in all the decisions relied upon by the learned AR, a consistent view is taken that the application of tolerance range of turnover of ten times on both sides of assessee's turnover was proper. Following the same, we direct the learned Assessing Officer to adopt the same for a fresh search. With this view of the matter, we set aside the findings of the authorities below and direct the learned Assessing Officer/learned TPO to take the range of turnover filter at ten times on both the ends and conduct ....
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....ach case inasmuch as if the assessee company, on the basis of its own functional profile, is found to have provided to its AE the low end back office support services like voice or data processing services as a whole or substantially the whole, the company is providing mainly high end services by using their specialized knowledge and domain expertise cannot be considered as comparables. It further observed that the purpose of attaining a relatively equal degree of comparability can be achieved by taking into consideration the functional profile of the tested party and comparing the same with the entities selected as potential comparables on broad functional analysis taken at ITeS level. The principal functions performed by the tested party ....
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....rsk Global Centres (India) (P.) Ltd., (supra) and Hon'ble Delhi High Court in the case of Rampgreen Solutions (P.) Ltd., (supra), we find that the functions performed by Vitae International Accounting Services Pvt. Ltd., Domex E - Data Pvt. Ltd., and MPS Ltd., fall broadly in the class of ITeS, but those are akin to the functions enumerated in clause (iv) to (vii) of Rule 10TA(g) of the Rules, thereby rendering themselves to be non-comparables to the assessee. We, therefore, direct the learned Assessing Officer/learned TPO to exclude these entities from the list of comparables. 18. Coming to Motiff India Infotech Pvt. Ltd., only reason urged before us to exclude this entity is its huge advertising and promotional expense. On this aspect,....