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2014 (12) TMI 921 - AT - Income TaxSelection of comparable - Nucleus Netsoft and GIS (India) Limited - functionally non-comparable or not - Failing employee cost filter and amalgamation of company - assessee is captive contract service provider engaged in providing IT enabled back office services to Ameriprise US - Held that:- Assessee relied upon judicial precedent for exclusion of the specific comparable on the ground that the factum of amalgamation makes the comparable an incomparable – in Willis Processing Services (I) (P.) Ltd. Versus Deputy Commissioner of Income-tax [2013 (3) TMI 415 - ITAT MUMBAI] the issue has been restored to the TPO to verify whether the functionality of the comparable has also changed as that would be the relevant criteria to consider the prayer for excluding the comparable – in M/s HSBC Electronic Data Processing (I) (P.) Ltd. Versus Assistant Commissioner of Income-tax [2013 (6) TMI 708 - ITAT HYDERABAD] - for this specific year i.e 2006-07 assessment year has given a categorical finding that it has changed the business model of the company – there is no merit in the arguments of the Revenue to still restore the issue for verification when a Co-ordinate bench on facts pertaining to the very same AY has held that the business model for Neclues Netsoft & GIS (India) Ltd. has changed as a result of the amalgamation – thus, this company cannot be selected as a comparable not only on the reason of failing employee cost filter, but also due to amalgamation during the year, which has changed the business model of the company – Decided in favour of assessee.
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