TaxTMI 
TaxTMI 
2026 (11) TMI 102
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....ncome of Rs.39,42,40,650/-. The said return was initially processed under Section 143(1) of the Act, but was later picked up for scrutiny. The AO issued a notice dated 17.08.2009, under Section 143(2) of the Act, which was duly served. The Assessee had declared international transactions with Associated Enterprises (AE). Therefore, the AO made a reference under Section 92CA of the Act to the Transfer Pricing Officer [TPO]. The Assessee had furnished the Transfer Pricing Analysis [TPA] to establish that the international transactions were on an Arm's Length basis. It had selected the Transactional Net Margin Method [TNMM] as the most appropriate method. 4. The learned TPO held that the Assessee's TPA was defective on several grounds and rejected it. First, it found that the Assessee had eliminated a large number of companies by applying qualitative filters, which, according to the TPO, raised doubts about the objectivity of the analysis. 5. Additionally, the TPO noted that the Assessee had not used the current year's data in all cases. It also observed that the Assessee had not applied the Related Party Transactions [RPT] filter properly. 6. The TPO also noted that the ....
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....2 5. Caliber Point Business Solutions Ltd 10.97 6. Coral Hubs Ltd (Earlier known as Vishal Information Technologies Ltd 50.68 7. Cosmic Global Ltd 23.30 8. Crossdomain Solutions Ltd 27.03 9. Datamatics Financial Services Ltd (Seg) 29.11 10. e4e Healthcare Solutions Ltd (Formerly known as Nittany Outsourcing Services Pvt Itd 18.54 11. Eclerx Services Ltd 58.80 12. Genesys International Corporation Ltd 47.40 13. Infosys BPO Ltd 19.66 14. IServices India Pvt. Ltd 10.77 15. Jindal Intellicom Pvt. Ltd -10.29 16. Mold-Tek Technologies Ltd 96.66 17. R Systems International Ltd (Seg) 4.30 18. Spanco Ltd (Seg.) (Earlier known as Spanco Telesystems & Solutions Ltd 8.81 19. Sipro Ltd (Seg) 30.05 20. Allsec Technologies Limited -13.29 AVERAGE 24.75 10. After making the adjustments, the TPO determined the arithmetic mean of the PLI at 23.08% of the operating costs and determined the shortfall of Rs.1,95,05,997/- from the Arm's Length Price. Accordingly, the learned TPO directed an upward adjustment to the said extent - a total adjustm....
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....hout appreciating that the comparables satisfy all the qualitative and quantitative filters applied by the TPO and recorded perverse finding? 3. Whether, the Hon'ble Tribunal, on the facts and in the circumstances of the case, was right in excluding Infosys Technologies Limited and Wipro Limited from the list of comparables due to premium branding, without taking into consideration that brand is only one of the variables to determine the profit margin when brand is only one of the factors which affects profitability and not the sole factor which affects profitability? 4. Whether, the Tribunal, on the facts and in the circumstances of the case, was right in rejecting M/s. Coral Hubs Ltd., M/s.Mold-Tek Technologies Ltd., and M/s.Eclerx Services Ltd., from the final list of comparables in ITES Segment, by relying on other decisions without appreciating the fact that selection of comparables in TP analysis depends on assessee specific FAR analysis? 5. Whether, on the facts and circumstances of the case, the Tribunal was correct in not appreciating the facts that if any filter or criteria applied by the assessee for search of comparables is accepted or any....
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....hnologies Ltd. iv. KALS Information Systems Ltd., v. Tata Elxsi Ltd. vi. Wipro Ltd. 23. This Court has considered whether the aforesaid comparables were rightly excluded in its decision in ITA No.338/2013 in respect of AY 2007-08. This court found no fault in the learned ITAT's decision to exclude those entities as comparable to the Assessee. Questions No.2 and 3 are thus squarely covered by the said decision in favour of the assessee. Re: Question No.4 24. Question No.4 relates to exclusion of three companies. The learned ITAT found merit in the Assessee's contention that M/s. Coral Hubs Limited (which is earlier known as Vishal Information Technologies Ltd.) was not comparable to the Assessee on the ground of functional dissimilarity. The learned ITAT found that Coral Hubs Limited had a different business model because it subcontracted most of the ITeS work to third-party vendors. Additionally, the ITAT also referred to its earlier decision in the case of Capital IQ Information Systems India Private Limited [ITA No.1961/Hyd/2011] In that decision, the learned ITAT noted that Coral Hub Ltd. had commenced a new line of business in print-on-demand....