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2023 (3) TMI 1218 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- Infosys Ltd. functional profile of the company as in the annual report states that the company is rendering varied services under the umbrella of SWD services. It is also noticed that the company is having huge intangible assets being the brand value of the company. The assessee on the other hand is a captive service provider with no intangible asset as per the financials. Given the volume of revenue generated, different kinds of services within the SWD segment, brand value etc., of Infosys Ltd, it cannot be compared with a captive service provider like assessee. Therefore the grounds on which the company was excluded in earlier years are applicable to the year under consideration also and therefore respectfully following the decision of the coordinate bench we direct the AO/TPO to exclude Infosys Ltd as a comparable. L&T Infotech is providing varied services under the umbrella of SWD services whereas the assessee is a captive service provider of routine software development. It is the submission of the ld AR that the L&T is engaged in trading of goods and there is no segmental break-up for such services/ products. We also notice that the company has made several acquisitions during the year under consideration. There is no change to facts for the year under consideration also, we respectfully follow the decision of the co-ordinate bench and direct the AO/TPO to exclude L&T Infotech Limited from the list of comparables. Interest on receivables - independent international transaction - TPO after allowing a credit period of 30 days computed the interest for 335 days to arrive at an adjustment - DRP directed the TPO to apply SBI short term rate and recompute the amount of adjustment - whether Outstanding receivables cannot be treated as a separate international transaction? - HELD THAT:- Issues of whether the interest on receivable is a separate international transaction and the rate of interest to be considered has been considered in the decision of the coordinate Bench of the Tribunal in the case of Swiss Re Global Solutions India Pvt. Ltd. [2020 (5) TMI 512 - ITAT BANGALORE] as held deferred receivables would constitute an independent international transaction and the same is required to be benchmarked independently Rate of interest - We find that this issue is no more res integra in view of the judgment of Cotton Naturals (I) (P.) Ltd [2015 (3) TMI 1031 - DELHI HIGH COURT] in which it has been held that it is the currency in which the loan is to be repaid which determines the rate of interest and hence the prime lending rate should not be considered for determining the interest rate. In assessee case the details with regard to Master Service Agreement, credit period allowed thereunder, invoicing details, the realization data, and such other particulars as may be relevant to adjudicate on this issue need to be examines. Therefore we remit the issue back to the AO/TPO for verification of the details. The AO/TPO is also directed to keep in mind the ratio laid down in the case of ON Semiconductor Technology India Private Limited (2022 (9) TMI 449 - ITAT BANGALORE) by the coordinate bench while deciding issue. Needless to say that the assessee may be given a reasonable opportunity of being heard. This ground of the assessee is allowed for statistical purposes.
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