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2014 (12) TMI 759 - ITAT DELHISelection of comparables - Infosys Technologies Limited – Diverse nature of services provided by comparable - Held that:- The Annual report/website of Infosys provides information on the diverse nature of services provided by it as Infosys is the largest publicly held software development company in India - It service profile includes consulting application design, development, re-engineering and maintenance, systems integration, package evaluation and implementation, business process management - The company has diverse domain expertise in areas such as engineering enterprises financial services, healthcare, technology, manufacturing, retail and distribution, telecom, transportation, utilities and energy - unlike the assessee, Infosys is extremely diversified and undertakes a wide range of services apart from software development- . Since the revenue and profitability for software development cannot be ascertained from the data in the annual report, Infosys cannot be included as comparable – also CIT v. Agnity India Technologies (P) Ltd [2013 (7) TMI 696 - DELHI HIGH COURT] Infosys Technologies Limited is directed to exclude from the list of comparable on account of its giant-ness which was decided on cumulative factors including risk profile, nature of service, turnover, ownership of brand, onsite versus offshore service, expenditure on R & D and advertisement etc. - Infosys Technologies Ltd cannot be held to be a comparable company to that of the assessee. Nucleus Netsoft & Gis India Limited – Functionally dissimilar - Software development services – Held that:- company is functionally dissimilar to that of the assessee on account of diversified operation - during the relevant financial year, Nucleus Netsoft&Gis India Ltd underwent restructuring exercise on account of amalgamation which impacted the financial statement of the company - since the assessee had neither raised any objection of Nucleus Netsoft&Gis India Ltd being included as comparable company before the TPO nor the DRP considered the assessee’s objection, thus, the matter is remitted back to the TPO. Grant of working capital adjustment – Held that:- The TPO had rejected the assessee’s claim for working capital adjustment, primarily for the reason that there was no accurate or sufficient data/working given by the assessee to make reliable working capital adjustment - assessee contended that it had worked out the computation for working capital adjustment with accurate and sufficient data and also in accordance with the settled economic principle - DRP had not elaborately considered the assessee’s objection and since the assessee has contested the TPO’s finding that no accurate and sufficient data was available to make reliable working capital adjustment, the matter is to be remitted back to the TPO for fresh consideration. Restriction of depreciation claim to 15% instead of 60% on computer peripheral/accessories – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that depreciation on computers peripheral, namely, UPS & Printers would be admissible @ 60% - Decided in favour of assessee.
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