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2015 (5) TMI 367 - AT - Income TaxTransfer pricing adjustment - Computation of Arms Length Price - wrong selection of comparables - Held that:- Kals Information Systems Ltd., Accel Transmatics Ltd., Lucid Software Ltd. and Tata Elxsi Ltd. held to be not comparable with a company engaged in the provision of software development services such as the assessee. Megasoft Ltd. in the list of final comparables chosen by the TPO is concerned, this Tribunal in the case of Trilogy E-Business Software India Pvt. Ltd.[2013 (1) TMI 672 - ITAT BANGALORE] has held had held that only segmental data of the said company should be taken for the purpose of comparison. Adjustment on account of ALP and consequent addition made by the AO to the total income, both in the IT segment with the 10 remaining comparable companies (including segmental margin of Megasoft Ltd.) would be 10.89% after working capital adjustment. The same is given as ANNEXURE-II to this order. The said arithmetic mean of the comparables is within the (+) (-) 5% range contemplated by the second proviso to Sec.92C(2) and consequently no addition by way of adjustment to ALP can be made. We have already seen that the adjustment to ALP and consequent addition to the total income in ITES segment cannot be sustained. - Decided partly in favour of assessee.
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