TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1935
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....facts and circumstances of the case, the Ld. AO/TPO erred in modifying the quantitative filters applied by the Appellant as well as introducing additional quantitative filters to modify the set of comparable companies identified by the Appellant in its TP Study report. 2.1. On the facts and circumstances of the case, the Ld. AO/TPO erred in application of a filter wherein only the companies with income from services to operating revenue greater than 75% are selected. 2.2. On the facts and circumstances of the case, the Ld. AO/TPO erred in application of employee cost filter, thereby rejecting companies having employee cost to operating cost ratio of less than 25%. 2.3. On the facts and circumstances of the case, the Ld. AO/TPO erred in modifying the turnover filter of 'INR 1 crore to INR 1000 crores' applied by the Appellant to 'INR 11.69 crores to INR 1,169.4 crores', thereby rejecting companies having a turnover lower than INR 11.69 crores as well as companies having a turnover greater than INR 1,169.4 crores. 2.4. On the facts and circumstances of the case, the Ld. AO / TPO erred in modifying the export turnover filter of 25% applied by the Appellant to 7....
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....fice Abroad/On site operations with significant forex spending are rejected; applied by the Ld. TPO. 3.4. On the facts and circumstances of the case, the Ld. AO / TPO erred in selecting Gwynniebee India Pvt. Ltd., as a comparable company: * by erroneously treating it as functionally similar to the Appellant; * by disregarding the fact that the company has unreliable financial statements for the year under consideration on one hand the financial statements disclose that the Company is only providing services to its holding company and its entire trade receivables is due from its holding Company and on the other hand the RPT schedule has not disclosed transaction with its Associated Enterprise. 3.5. On the facts and circumstances of the case, the Ld. AO/TPO erred in selecting Infobeans Technologies Ltd., as a comparable company: * by erroneously treating it as functionally similar to the Appellant; * by disregarding the fact that the company undertakes Research & Development ('R&D') activity; * by disregarding the fact that the Company has experienced abnormal growth 3.6. On the facts and circumstances of the case, the Ld. AO/TPO erred in selecting E-Infochips....
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....garding the fact that the Company is functionally comparable to the Appellant; * by erroneously applying the forex expenditure filter; * by disregarding the fact that the Ld. TPO in the Appellant's own case for AY 2011-12 had included the said Company in the list of comparable companies, which was confirmed by DRP 3.14. On the facts and circumstances of the case, the Ld. AO/ TPO erred in rejecting KALS Information Systems Ltd.: * by disregarding the fact that the Company is functionally comparable to the Appellant; * by erroneously modifying the turnover filter of 'INR 1 crore to INR 1000 crores applied by the Appellant to 'INR 11.69 crore to 1169.4 crores'. 3.15. On the facts and circumstances of the case, the Ld. AO/TPO erred in rejecting Sankhya Infotech Ltd.: * by disregarding the fact that the Company is functionally comparable to the Appellant; * by erroneously applying the foreign expenditure filter, wherein companies with Branch Office Abroad/On site operations with significant forex spending are rejected; * by erroneously applying the gross intangible filter. Incorrect computation of Profit Level Indicator ('PLI') 4. On the facts....
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....see is a Private Limited Company incorporated as a subsidiary of Optiva Inc., Canada and is working to support the Global operations of Optiva group in the field of Software development and Support services. Assessee company filed its e-return of income for A.Y. 2018-19 on 30.11.2018 declaring taxable income at Rs. 21,84,52,590/-. Return processed u/s. 143(1)(a) of the Act on 01.10.2019. Thereafter, case selected for scrutiny under CASS followed by validly serving statutory notices u/s. 143(2)/142(1) of the Act. During the year, assessee undertook international transactions with its Associated Enterprises and as per Form 3CEB the total of such transactions amounted to Rs. 117.02 crore (approx.). Ld. Assessing Officer made a reference to the Transfer Pricing Officer (TPO) for computing the Arms Length Price (ALP) in relation to the international transactions undertaken by the assessee with its Associated Enterprises. Ld. TPO issued notice u/s. 92CA(2) and u/s. 92D(3) of the Act. Details as called for were filed by the assessee. Ld. TPO observed that the Profit Level Indicator (PLI) of the assessee as per Transfer Pricing Study Report (TPSR) is 18.81%. Assessee in support of its corr....
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....bles for the purpose of calculating ALP of the international transactions carried out by the assessee with its Associated Enterprises : Sl.No. Name of comparable company 1 Cybage Software Pvt. Pvt. Ltd. 2 Nihilent Ltd. 3 Infobeans Technologies Ltd. 4 E-Infochips Pvt. Ltd. 5 Ninestars Information Technologies Ltd. 8. We observe that the assessee is engaged in the field of Software Development and Support services to its Associated Enterprises. In the written submissions, Ld. Counsel for the assessee has referred to various decisions of this Tribunal in assessee's own case where the very same comparables have been examined in ITA No.15/PUN/2019 order dated 23.09.2021 for A.Y. 2014-15, ITAT No.194/PUN/2021 order dated 21.07.2022 for A.Y. 2016-17 and ITA No.181/PUN/2022 order dated 07.10.2022 for A.Y. 2017-18. 9. From going through the above decisions of this Tribunal, we find that the comparables namely (1) Cybage Software Pvt. Pvt. Ltd. (2) Nihilent Ltd. (3) Infobeans Technologies Ltd. and (4) EInfochips Pvt. Ltd. stands already examined by this Tribunal in assessee's own case for A.Yrs. 2014-15, 2016-17 and 2017-18 and after examining the functionality of the ass....
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....the present case), M/s.Persistent Systems Limited [A] and it is not material whether the companies selected are catering to the same industry/segment(s) as the assessee. Since the company is found to be engaged in provision of software development services, the contentions of the assessee regarding functional non- comparability are rejected. Also the assessee is also engaged in product development and related activities and hence we find that this comparable has been rightly selected as functionally comparable to the assessee under TNMM method, which enables broad comparability. Hence we approve the selection of this company as a valid comparable and accordingly reject this ground of objection raised by the assessee." 16.1 The ld.AR submitted that it is functionally dis-similar. Ninestar Information Technologies Ltd., is involved in provision of content services, analytical services, Tech Services, Software Consultancy etc., therefore, the ld.AR pleaded that it is not functionally comparable. 16.2 We have studied the Annual Report of Ninestar Information Technologies Ltd. There is only one finding in the Annual Report i.e."Revenue is primarily derived from digitisation and rela....