TaxTMI 
TaxTMI 
2026 (8) TMI 1096
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....143(3) r.w.s. 144C(13) r.w.s.144B of the Income Tax Act ['Act' in short] pursuant to the directions of Ld. Dispute Resolution Panel-1, Bengaluru-1 ('DRP' in short) u/s. 144C(5) of the Act dated 25.11.2025. 2. The assessee has filed the following grounds of appeal as mentioned below: - 1. On the facts and circumstance of the case and in law, the order issued by the Assessment Unit/Verification Unit/Technical Unit/Review Unit, Income Tax Department-National Faceless Assessment Centre [('Assessing Officer) or (Ld. AO)), is bad on facts and in law, and is in violation of the principles of natural justice. The Ld. DRP erred in confirming the same. 2. On the facts and circumstance of the case and in law, the Ld. AO ha....
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....Limited, CG-VAK Software & Exports Limited, Cybage Software Private Limited. The Ld. DRP erred in confirming the same. 6. On the facts and circumstance of the case and in law, the Ld. AO/Ld. TPO has erred in law in using data, which was not contemporaneous, and which was not available in the public domain at the time of conducting the transfer pricing study by the Assessee. The Ld. DRP erred in confirming the same. 7. On the facts and circumstance of the case and in law, the Ld. AO/Ld. TPO erred in rejecting certain comparable companies arrived at in the Transfer Pricing Study viz. Great Software Laboratory Private Limited, Kcube Consultancy Services Private Limited, Yudiz Solutions Private Limited, Microland Limited, Mave....
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....and u/s 271AA(1) of the Act. 13. The above grounds are independent and with prejudices to one another. The Appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of the hearing of appeal, so as to enable the Hon'ble Income-tax Appellate Tribunal to decide this appeal according to Law. 2.1 The AR for the assessee has pressed only Ground No.10 hence other grounds of appeal raised by the assessee are dismissed as not pressed. 2.2 Ground No.10 is as under: On facts and circumstances of the case and in law, the Ld. AO/Ld. TPO erred in not applying an appropriate upper limit to reject companies having high turnover when compared to the App....
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....ent of Rs. 2,51,85,029/-. The DRP directed exclusion of Infosys Ltd. from the final set of comparables and remanded the issue relating to inclusion of Microland Ltd. for verification. However, the DRP rejected the assessee's contention regarding application of an upper turnover filter and upheld the remaining comparables selected by the TPO. According to the assessee, while passing the final assessment order, the Assessing Officer failed to give effect even to the specific direction of the DRP excluding Infosys Ltd. Aggrieved, the assessee is in appeal before us. 4. We have heard the rival submissions and perused the material available on record. The limited controversy raised in Ground No.10 relates to the applicability of an upper ....
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.... also find upon careful analysis of the FAR (Functions, Assets, Risks) profile that several entities operate in diversified service verticals or have products in addition to services, rendering them not comparable to a captive service provider. Therefore, the following are to be excluded Net4Nuts Ltd., Consilient Technologies Pvt. Ltd., Aptus Software Labs Pvt. Ltd., etc.. Further, based on the profile and margins, Yudiz Solutions Pvt. Ltd., Infomile Technologies Ltd., and R Systems International Ltd. appear to be functionally comparable and should be included. Hence, in light of the above directions, the AO/TPO is directed to recompute the arm's length margin based on the revised set of comparables after giving the Assessee an opportunity ....
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....erive advantages on account of economies of scale, market leadership, ownership of valuable intangibles and diversified operations. Therefore, applying the ratio laid down by the coordinate Bench in the assessee's own case for assessment year 2021-22, we hold that companies having turnover exceeding ten times the turnover of the assessee cannot be regarded as appropriate comparables. Accordingly, following the decision of the coordinate Bench in the assessee's own case for assessment year 2021-22 in IT(TP)A No.67/Chny/2024 dated 24.09.2025, we direct the Assessing Officer/TPO to apply the upper turnover filter of ten times the turnover of the assessee while finalising the set of comparables. Consequently, all companies whose turnove....