AI Drafter 
TaxTMI 
TaxTMI 
2024 (11) TMI 1198
X X X X Extracts X X X X
X X X X Extracts X X X X
....n unjustifiable grounds even though sufficient data was available, and they were functionally comparable to the assessee and satisfied all the filters applied by the learned TPO" i) Kals Information Systems Ltd ii) Akshay Software Technologies Ltd iii) Batchmaster Software Private Ltd iv) DCIS NOT COM Solutions India Pvt Ltd v) Evoke Technologies Pvt Ltd vi) Sasken Technologies Ltd vii) E-Zest Solutions Ltd And the learned Assessing Officer and the Hon'ble DRP have erred in confirming the same. Ground No.3 The learned TPO has erred on facts and law by comparing the Assessee with the following 16 companies in the software development segment, which have an entirely different functional and risk profile on account of factors like high turnover, significant RPT, onsite revenues, etc: i) Great Software Laboratory P Ltd ii) Gwynniebee India Pvt Ltd iii) Exilant Technologies Pvt Ltd iv) Larsen & Toubro Infotech Ltd v) Nihilent Technologies Ltd vi) Tata Elxis Ltd vii) Infobeans Technologies Ltd viii) Wipro Ltd ix) Persistant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....les selected by the assessee. The assessee has benchmarked its international transactions by applying TNMM as most appropriate method and selecting 16 comparable companies having 36 percentile at 5.6% and 66 percentile 10.4% and claimed that the profit margin of the assessee at 15% is at Arms' Length. The TPO rejected 12 comparables out of 16 comparables selected by the assessee and carried out a fresh process of selecting the comparables wherein a asset of 21 comparables were selected by the TPO for determining the ALP having 35 percentile at 19.7% and 66% percentile at 25.70%. Thus, the median of the comparables selected by the TPO comes to 24.58%. The TPO accordingly proposed transfer pricing adjustment to the tune of Rs. 1,27,07,337/-. The Assessing Officer frames draft assessment order in terms of the order of the TPO which was challenged by the assessee by filing objections before the DRP. Consequent to the directions of the DRP, the final list of total comparables was 24 for the purpose of re-computation of the ALP and accordingly, the Assessing Officer has made a TP adjustment on the basis of those 24 comparables. 5. Being aggrieved by the order of the Assessing Officer,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....1 and 2, ld. AR has submitted that the TPO has rejected the following comparables : (i) Sagarsoft (India) Limited (ii) Athena Global Technologies Limited (iii) Akshay Software Technologies Limited (iv) Batchmaster Software Private Limited (v) Celstream Technologies Private Limited (vi) Isummation Technologies Private Limited (vii) Evoke Technologies Private Limited (viii) DCIS DOT COM Solutions India Private Limited (ix) Maveric Systems Limited (x) Orangescape Technologies Limited (xi) Sasken Communication Technologies Limited (xii) Infomile Technologies Limited (xiii) E-Zest Solutions Limited 4.1. The TPO while rejecting the TP objection of the assessee held that these comparables were not appearing in the search matrix of the appellant TP Study Report. It was submitted by the assessee by referring to the TP order that the contention of the TPO was incorrect and the DRP has not considered the submission of the assessee that the data of these comparables were available in the public domain. Our attention was drawn to the order of the TPO." 9. The Tribuna....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpanies whose turnover is more than 10 times of the assessee which are as under: "1. Exilant Technologies Pvt Ltd - Rs. 373 crores 2. Larsen & Toubro Infotech Ltd - Rs. 6,183 crores 3. Nihilent Technologies Ltd - Rs. 259 crores 4. Tata Elxis Ltd - Rs. 1,201 crores 5. Wipro Ltd - Rs. 45,639 crores 6. Persistent Systems Ltd Rs. 1,733 crores 7.Infosys Ltd - Rs. 59,289 crores 8. Cybage Software P Ltd Rs. 759 crores 9. E-Infochips Pvt Ltd. Rs. 264 crores 10.Great Software Laboratory Pvt Ltd Rs. 127 crores 13. He further submitted that this Tribunal in assessee's own case for the A.Y 2016-17 has considered an identical issue and remanded the matter to the record of the TPO with a direction to exclude the company whose turnover is more than 10 times of the assessee company as well as the companies whose turnover of 1/10th of the turnover of the assessee. Thus, the learned AR has submitted that the TPO may be directed to apply the said filter of the turnover as directed by this Tribunal for the A.Y 2016-17. 14. The learned DR, on the other hand, submitted that in the software development service....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 17. Ground No.4 is regarding related party filter at 25% applied by the TPO as against a filter of 15% applied by the assessee. The learned AR at the time of hearing submitted that the assessee does not wish to press Ground No.4. The learned DR has no objection if Ground No.4 is dismissed as not pressed. Accordingly, Ground No.4 of assessee is dismissed, being not pressed. 18. Ground Nos. 5 & 6 are regarding treating deferred receivables as international transaction and adjustments made by the TPO on notional interest. The learned AR of the assessee has submitted that an identical issue has been considered by this Tribunal in assessee's own case for the A.Y 2016-17 and thus, prayed that the TPO/Assessing Officer may be directed to consider the interest on the deferred receivables @ 6% after allowing a standard credit period of 60 days. 19. On the other hand, the learned DR has relied upon the orders of the authorities below. 20. We have considered the rival submissions as well as the relevant material available on record. At the outset, we note that an identical issue has been considered by this Tribunal in assessee's own case for the A.Y 2016-17 in Para 16 which reads a....