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2022 (8) TMI 1498 - AT - Income TaxTP Adjustment - non granting of WCA - HELD THAT:- We remit the issue to the file of AO/TPO to compute the working capital adjustment after necessary examination in the light of the above observation and after allowing an opportunity of hearing to the assessee. Comparables selection in both segments of SWD & ITes - HELD THAT:- As relying on Global Logic India Ltd [2021 (11) TMI 1090 - ITAT DELHI] exclude Inteq Software Pvt.Ltd, L&T Infotech Ltd., Infobean Technologies Ltd., Thirdware Solutions Ltd. from the final list of comparable for SWD segment. Persistent Systems Ltd and Infosys Ltd. - With varied functions, these companies cannot be compared with assessee before us, which is a captive service provider. We accordingly direct the Ld.AO/TPO to exclude Persistent Systems Ltd., and Infosys Ltd. from the final list. Aspire Systems (India) Pvt. company earns its revenue from power generation and it has nothing to do with the rendering of software development service. In fact, we note that this company is a full fledged entrepreneur in the business of power generation and therefore is not comparable functionally with a captive software service provider like assessee. Thus direct the Ld.AO/TPO to exclude Aspire System India Pvt. Ltd. from the final list. Nihilent Technologies Limited - Based on the functions performed by this company as submitted by the Ld.AR and the observations of Hon’ble Mumbai Tribunal in Red Hat India Pvt. Ltd [2022 (2) TMI 1283 - ITAT MUMBAI] this comparable deserves to be excluded from the final list. Cybage Software Pvt.Ltd Primarily is a product company and has diversified business segments. We note that this company is a full fledged entrepreneur and assumes all the risks attributable to the various business segments for which details are not available. In our view, under such circumstances, this company cannot be held to be functionally comparable with that of assessee which is a captive service provider that caters only to its AE. SPI Technologies India Pvt.Ltd. and eClerx Services Ltd. - The assessee in Barracuda Networks India (P.) Ltd [2022 (5) TMI 322 - ITAT BANGALORE] was a captive service provider to its AE for assessment year 2016-17. Respectfully following the above, we direct Ld. AO/TPO to exclude Tech Mahindra Business Services Ltd., Infosys BPM Ltd., SPI Technologies India Pvt.Ltd., eClerx Services Ltd. for having high turnover as compared to a captive service provider like assessee under the ITES segment. Disallowance of deduction claimed u/s 35AC and section 80G - Corporate Social Responsibility (CSR) Expenditure which lacks voluntary act/element of charity on the part of donor - HELD THAT:- As relying on Sling Media (P.) Ltd [2021 (12) TMI 762 - ITAT BANGALORE] we direct the Ld.AO verify the payments made by assessee towards CSR that also forms part of deduction u/s. 80G. Ld. AO shall then grant the deduction claimed u/s. 80G of the Act in accordance with law. Interest u/s. 234A cannot be levied in case if assessee has filed the return of income within the time period prescribed u/s. 139(1) of the Act. The Ld.AO is directed to verify the same and consider the claim in accordance with law.
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