Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (6) TMI 979 - AT - Income TaxTransfer pricing adjustment - selection of comparable - Held that:- Avani Cincom Technologies Ltd., KALS Information Systems Ltd. and Celestial Labs Ltd. be omitted from the list of comparables. KALS Information Systems Ltd.company was developing software products and was not purely or mainly a software service provider thus need to be excluded Bodhtree Consulting Limited company is not a good comparable in view of the software products produced by the company. As such, no segmental data is adequately available too thus need to be excluded. E-Zest Solutions Ltd. and Quintegra Solutions Ltd. are functionally different from the assessee and are not comparable to software development services as are engaged in proprietary software products and owns its own intangibles unlike the assessee in the case on hand who is a software service provider. Flextronics Software Systems Ltd., iGate Global Systems Ltd., Infosys Technologies Ltd., Mindtree Ltd. (Seg.) and Sasken Communication Technologies Ltd. (Seg.) companies have been excluded from the list of comparables on the ground that these companies have a turnover filter above ₹ 200 crores and cannot be compared with the assessee, whose turnover is only ₹ 66.94 crores. Wipro Ltd. be excluded from the list of comparable companies. Thirdware Solutions Ltd. and Lucid Software Ltd. companies be omitted from the list of comparables for the period under consideration in the case on hand as are not functionally comparable with a software development service provider such as the assessee. Persistent Systems Ltd. is engaged in product development and product design services while the assessee is a software development services provider. Helios & Matheson Information Technology Ltd. in view of the admitted factual position that the employee cost in the case of this company was less than 25% of its sales, this company has to be excluded from the list of comparables. Birla Technologies Ltd. company should be taken as a comparable as there is no other basis for rejecting this company as comparable assigned by the TPO Indium Software (India) Ltd t export turnover filter of this company was 37.77% of its total turnover and therefore this company passes the export revenue filter of more than 25% of the turnover and has to be regarded as a comparable. Excluding the lease line expenses from the total turnover as well as the export turnover, following the decision of the CIT v. Tata Elxsi Ltd.,(2011 (8) TMI 782 - KARNATAKA HIGH COURT ) confirmed.
|