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2018 (6) TMI 1639 - AT - Income TaxTP Adjustment - comparable selection - functional dissimilarity - HELD THAT:- Infosys BPO Limited company was functionally dissimilar to the assessee company as this company was engaged in providing high-end integrated services. It has been submitted and demonstrated from the annual report of BPO Infosys Ltd that this company is rendering a wide array of BPO services in the nature of business platforms, customer service outsourcing, finance and accounting, human resources outsourcing, legal process outsourcing, sales and fulfilment sourcing and procurement outsourcing etc. On the other hand, it is seen that the assessee provides only back office support services in the nature of IT enabled services and it is essentially a captive service provider. We direct the AO/TPO to exclude BPO Infosys Ltd. from the final set of comparables. BNR Udyog Ltd. is carrying out medical transcription, medical billing and coding whereas the assessee is a captive service provider. ITAT Delhi Bench had the occasion to consider the comparability of another company providing medical transcription service i.e. Accentia Technologies Ltd. with the assessee company in assessee's own case BT e-Serv (India) (P.) Ltd. v. ITO [2017 (11) TMI 64 - ITAT DELHI] by holding that the functions of medical transcription are not at all comparable to the functional profile of the assessee company. Eclerx Services Limited was functionally different from the assessee company as this company was engaged in Knowledge Process Outsourcing (KPO) services and was engaged in providing financial services like trade processing, reference data services like web content management and merchandising execution, web analytics, social media etc Excel Infoways Limited ompany was also functionally dissimilar as it was engaged in IT enabled BPO services and development of infrastructure facility. It has also been submitted that this company fails the employee cost filter as well as the diminishing revenue filter. TCS e- Serv Ltd. functionally dissimilar to the assessee company as this company provides KPO services to banking and financial services industry in the form of core business processing services, analytics and insights as well as support services for both data and voice processes. Also service wise segmental details were not available in the case of this company R Systems Ltd - we direct the assessee to produce the relevant information before the TPO and also direct the TPO to verify the same and if found appropriate, include R Systems Ltd in the final list of comparables. Denial of working capital adjustment - HELD THAT:- In the proceedings before us for this year, it has been demonstrated by the Ld. AR that the working of the working capital adjustment claim was submitted before the TPO/AO. We also note that the claim of the assessee was rejected without assigning any reason. In such a circumstance, it is our considered opinion that the TPO/AO should consider the claim of the assessee with regard to working capital adjustment afresh after duly examining the computation as submitted by the assessee and after giving due opportunity to the assessee. Transfer pricing adjustment on account of interest on receivables - HELD THAT:- AR had been placing extensive reliance on the order of the co-ordinate Bench of the ITAT in assessee's own case BT e-Serv (India) (P.) Ltd.[2017 (11) TMI 64 - ITAT DELHI] while pleading for similar relief with respect to the comparables, the issue of interest on receivables was not argued at all and a plea was made to restore the issue to the TPO/AO with appropriate directions conveniently side-stepping the fact that this issue had been decided against the assessee in AY 10-11 in the very same order on which the Ld. AR had placed extensive reliance. However, we also note that the Ld. CIT DR also had not pointed out that this issue was covered against the assessee - thus in the interest of justice, the issue of adjustment in respect of interest on receivables should be re-examined by the TPO/AO after giving adequate opportunity to the assessee to present its case and also after giving due consideration to the order of the ITAT in assessee's own case
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