TaxTMI 
TaxTMI 
2026 (9) TMI 1470
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.... developing computer software for its Associated Enterprise. During the relevant assessment year, it filed its return of income for AY-200910 on 30.09.2009, declaring a total income of Rs.30,97,850/- after claiming an exemption of Rs.17,54,94,079/- under Section 10A of the Act. The return filed by the Assessee was selected for scrutiny and since it involved international transactions, the Assessing Officer [AO] made a reference under Section 92CA of the Act to the Transfer Pricing Officer [TPO]. 3. The Assessee furnished a Transfer Pricing Study, in which it adopted the Transactional Net Margin Method [TNMM] to determine the Arm's Length Price [ALP]. The Assessee referred to nine comparables with an average profit margin of 10.5% on sales, which was considered the Profit Level Indicator [PLI]. The Assessee had disclosed a margin of 13.08% on sales. On the said basis, the Assessee claimed that the international transactions were at arm's length. 4. The learned TPO accepted TNMM as the most appropriate method. However, the TPO found that certain filters applied by the Assessee, as well as comparables selected by it, were not apposite. 5. After considering the Assesse....
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....appeal, only the grounds relating to the transfer pricing adjustments are relevant, as the present appeal is confined to those transfer pricing adjustments. This Court dismissed the present appeal by order dated 02.07.2018. The Court found that no substantial question of law arose for consideration by the Court. 10. The Court had also referred to its earlier decision in Prl.Commissioner of income tax and another Vs. M/s. Softbrands India Private Limited [ITA No.536/2015 c/w ITA No.537/2015 D.D. 25.06.2018] In the said decision, this Court held that appeals concerning whether the comparables had been rightly selected or the filters had been rightly applied would not give rise to any substantial question of law. 11. The Revenue had also challenged the decision in Softbrands (supra) before the Supreme Court. The Revenue also challenged the order dated 02.07.2018 passed in the present appeal before the Supreme Court, which tagged along with the appeals arising from the decision in Softbrands (supra). 12. The Supreme Court did not concur with the decision of this Court in Softbrands (supra). In SAP Labs India Private Limited Vs. Income Tax Officer [(2024) 17 SCC 344] and other ....
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....lts in fresh comparability analysis and therefore a piecemeal approach negates the whole concept of comparability analysis? 6) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition made by the Assessing Officer without appreciating that due to the amendment in section 194J and section 9 of the IT Act, the charges paid for leased line come under the purview of section 194J of the Act and therefore liable to TDS? 7) Whether on the facts and in the circumstances of the case, the Tribunal was justified in directing the Assessing Officer to reduce the expenditure incurred in foreign currency both from the Export Turnover and Total turnover for the purpose of computation of deduction u/s. 10A/10AA of the IT Act without appreciating the fact that the statute allows exclusion of such expenditure only from the ETO by way of specific definition of export turnover as envisaged in the Act. On the other hand, there is no specific provision in section 10A / 10AA warranting exclusion of the above expenses from the total turnover also ?" 14. The Revenue did not press Question Nos. 6 and 7 in the earlier round, as noted i....
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....ompany was not comparable to M/s Fiserv India Private Limited, which was engaged in software development services, inter alia for the reason that M/s Bodhtree was engaged in the development of software products. We note that the ITAT had also followed the decision in the M/s. CISCO systems (supra). Paragraph No.10 of the learned ITAT's decision in M/s. Fiserv India (supra) is relevant. Accordingly, the relevant extract of the said decision is set out below: "BODHTREE CONSULTING LTD: 10. The learned AR submitted that this comparable be excluded on the ground that this company has experienced abnormally high increasing sales/profitability for the year under consideration i.e. F.Y. 2008-09. The Ld. AR ( Asst. Year 2009-2010) further submitted that Bodhtree is a provider of innovating consulting and technology services. The company has niche strengths in building and managing a business oriented IT environment with rich experience in technology incubation, product engineering, business intelligence, data management, SOA consulting, CRM consulting, data warehousing and product engineering. It was submitted that merely because one segment of the company is of software d....
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....ccount of fluctuations in margins over the years. 10.3 The ld AR also relied on the decision of the ITAT Bangalore Bench in M/s. Softtek India Private Limited Vs. ITO, ITA No.222/Bang/2014 for the Assessment Year 200910, wherein the Tribunal excluded Bodhtree Consulting Ltd. as a comparable since it is functionally different and engaged in developing software products and segmental data is available in public domain. 10.4 The learned DR supported the order of DRP and the TPO. 10.5 Having considered rival submissions, we find that the issue regarding the exclusion of the instant comparable stands examined by a coordinate bench of this Tribunal in the case of M/s. Softek India Pvt. Ltd. vs. ITO, ITA No. 222/Bang/2014 for assessment year 2009-10 wherein in an order dated 31.10.2014 it was held as under: "4.3 Having regard to the contentions of the rival parties and also the material on record, we find that the assessee is only a software services company whereas M/s. Bodhtree Consulting Ltd. is also into the business of software product development and segmented data is not available in the public domain. Therefore, we are satisfied that it is funct....