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2015 (1) TMI 920 - AT - Income TaxTransfer pricing adjustment - selection of comparables - Held that:- AVANI CIMCON TECHNOLOGIES LIMITED is to be excluded from the company from the list of comparables as this company is functionally dissimilar and different from assessee. E-ZEST SOLUTION LTD be excluded from the set of comparables as while assessee is into software development services, this company i.e. e-Zest Solutions Ltd., is rendering product development services and high end technical services which come under the category of KPO services. INFOSYS TECHNOLOGIES LTD. is not functionally comparable since it owns significant intangibles and has huge revenues from software products. It is also seen that the break-up of revenue from software services and software products is not available. In this view of the matter, we hold that this company ought to be omitted from the set of comparable companies. KALS INFORMATION SYSTEMS LTD be excluded as this company is functionally different from the software activity of assessee as it is into software products. TATA ELXSI LTD is not to be considered for inclusion in the set of comparables in the case on hand as it is engaged in development of niche product and development services which is entirely different from the assessee company. WIPRO LTD cannot be considered as a comparable to the assessee as it is engaged both in software development and product development services. There is no information on the segmental bifurcation of revenue from sale of product and software services. Risk adjustment - Held that:- Consequent to our decision on comparables the risk adjustment may vary. Therefore AO/TPO is directed to re-workout the same after giving due opportunity to assessee for making submissions. Therefore, issue of risk adjustment is restored to the file of the Assessing Officer/TPO for fresh consideration. Charging of interest under sections 234B and 234D - Held that:- The charging of interest under the aforesaid sections is consequential and mandatory and the Assessing Officer has no discretion in the matter and in this view of the matter, we uphold his action in charging the said interest. The Assessing Officer is, however, directed to re-compute the interest chargeable under section 234B/234D of the Act, if any, while giving effect to this order. - Appeal decided in favour of assessee for statistical purposes
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