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2015 (3) TMI 1024 - AT - Income TaxTransfer pricing adjustment - Computation of Arms Length Price - selection of comparable - Held that:-Flextronics Software Systems Ltd. 595.12 crores and Infosys Technologies Ltd. 9028.00 crores whose turnover is above ₹ 200 Crores should be excluded from the list of comparable companies. The AO is directed to compute the Arithmetic mean by excluding the aforesaid companies from the list of comparable. Respectfully following the decision of of Tektronix Engineering (2015 (3) TMI 267 - ITAT BANGALORE), we direct that KALS InfoSystems Ltd. And Accel Transmatic Ltd. And TATA Elxsi be excluded from the list of 20 comparable arrived at by the TPO. There is no dispute that RPT filter in the case of Megasoft Ltd. was 17.08%, that of Aztech Software Ltd. was 17.78% and that of Geometric Software Ltd. was 19.34%. Coordinate Benches of the Tribunal are consistently following 15% as cut off mark for applying the RPT filter. Accordingly, we direct exclusion of Megasoft Ltd., Aztech Software Ltd. and Geometric Software Ltd. from the comparables. See Agile Software Enterprise Private Limited, C/o. Oracle India Private Ltd. Versus The Income Tax Officer [2015 (1) TMI 600 - ITAT BANGALORE] Inclusion of the reimbursement of expenses by the AE to the Assessee as part of the operating cost while working the adjustment on account of ALP - Held that:- It is clear from the decision rendered by the co-ordinate bench in the case of L.G.Soft India Pvt.Ltd. (2013 (9) TMI 191 - ITAT BANGALORE) that reimbursement of expenses cannot be considered as receipts for rendering services and should not be added back to the cost base for the purpose of mark up. Following the said decision, we hold that reimbursement of expenses cannot be considered as receipts for rendering services and should not be added back to the cost base for the purpose of mark up. As submitted by the learned DR neither the TPO not the DRP have gone into the question as to whether the receipt in question is reimbursement. We therefore remand the issue to the limited extent of verification regarding the nature of the receipt only and hold that if the receipts are purely reimbursement of expenses they should neither be considered as operating income nor operating expenses for the purpose of calculating margins of the Assessee. - Decided partly in fvaour of assessee for statistical purposes.
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