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2011 (11) TMI 476 - AT - Income TaxNon-satisfaction of arm's length principle in respect of international transaction - Assessee registered under the Software Technology Parks of India ('STPI') scheme – assessee contested against incorrect inclusion of uncomparable company by TPO - Held that:- The TPO has arbitrarily applied various filters for rejecting comparables in software development segment as well as in ITES segment. TPO has retained Infosys Technologies Ltd. and Satyam Software Services Ltd. in the comparable set in complete disregard of the fact that there is sufficient evidence available in public domain to demonstrate that the functional data of Satyam Software Services Ltd. was not reliable for F.Y. 2005-06 and has also failed to apply wages/ sales ratio filter in ITES segment, erroneously retained Allsec Technologies Ltd. in the final comparable set, though it was functionally uncomparable, applied turnover filter of Rs. 5 crores, denied the benefit of working capital adjustment and the risk adjustment. Further, assessee has raised vital points before the TPO as well as the DRP and the same have not been dealt with by proper speaking order. Issue remitted back to the file of the AO who inturn will remit the issue to the TPO for his consideration in the light of adjudication as above - Decided in favor of assessee by way of remand.
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