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2017 (8) TMI 1576 - AT - Income TaxTP Adjustment - Exclusion/Inclusion of comparables sought for by assessee - HELD THAT:- Infosys BPO Ltd. - As the facts of the case for the year under consideration, as brought out from the relevant portions of the Annual Report of this company are similar for this year also, we respectfully following the aforesaid decision of the co-ordinate bench in the case of e4e Business Solutions India (P.) Ltd. [2016 (3) TMI 356 - ITAT BANGALORE] hold that his company i.e Infosys BPO Ltd., is functionally dissimilar from the assessee in the case on hand and direct the AO/TPO to exclude this company from the final set of comparables. We hold and direct accordingly. TCS E-Serve Ltd.- While the assessee has mentioned the services rendered by this company as high end KPO services, it has not brought out as to which are the services that would fall under Transaction Processing and which services would come under Technical Services, a distinction made in the cited case. It is also seen that the assessee has not put forth any submissions on the issue of development of software, one of the reasons cited in the decision relied upon. While the TPO has held that the services rendered by the company to be BPO services without any analysis, we find that the assessee also has not demonstrated that the services rendered by the company fall in the high end KPO services as claimed and has relied on the decisions that has merely relied on the decisions that were rendered in the context of earlier years for excluding this company from the list of comparables. Therefore, in our view an examination is necessary in order to ascertain as to whether the conditions on the basis of which this company was excluded as a comparable in earlier years still prevail and are applicable to the assessment year under consideration. In this view of the matter, we deem it fit to remand the matter back to the file of the TPO for fresh consideration in the light of our observations above. BNR Udyog Ltd. (Seg) (Medical Transcription) - Since in the year under consideration, there are 3 segments, how much of the RPT expenses pertain to each of the segments requires examination and we find that this aspect has not been analyzed by either the TPO or the assessee. While it is clear from the TPO’s order that if the benchmarking is done only for the medical transcription segment, then the RPT pertaining to that segment only should be considered. However, since how much of the RPT pertain to the medical transcription segment has not been determined by either the TPO or the assessee, we deem it appropriate and proper to remand the matter of comparability of this company M/s BNR Udyog Ltd., to the file of the TPO for determination of the issue afresh in line with our observation above. Needless to add, the assessee shall be afforded adequate opportunity of being heard in the matter and to file submissions/details in this regard which shall be duly considered by the TPO before deciding the issue Jindal Intellicom Ltd. - If the DRP come to the view that this company has been wrongly selected as a comparable the least the DRP ought to have done was to have afforded opportunity to both the TPO and the assessee of being heard in the matter in respect of their view/observations. However, we find that the DRP has unilaterally excluded this company from the final list of comparables. In the fitness of things, both the TPO and assessee should have been afforded adequate opportunity to explain its stand view in the matter. In that view of the matter, we set aside the finding of the DRP in excluding this company from the list of comparables to the assessee and remit the matter to the file of the DRP who shall decide this issue, of inclusion/exclusion of this company as a comparable, afresh TP Adjustment towards interest received - charging interest receivable on loans provided by the assessee to its AE’s - HELD THAT:- In the assessee’s own case for asst. year 2008-09 in Indegence Life Systems (P.) Ltd. v. Asstt. CIT [2015 (7) TMI 211 - ITAT BANGALORE] we hold that LIBOR rate should be applied for the interest on the said loan transactions and if the interest rate of 10% per annum charged by the assessee is higher than the LIBOR applicable, then adjustment towards the interest on the said loans advanced by the assessee to its AE’s is not tenable. Charge of Interest u/s 234B and 234C - HELD THAT:- The charging of interest is consequential and mandatory and the AO has no discretion in the matter. This proposition was upheld by the Hon’ble Apex Court in the case of CIT v. Anjum H. Ghaswala [2001 (10) TMI 4 - SUPREME COURT] and we therefore uphold the action of the AO in charging the assessee the said interest. The AO is, however, directed to re-compute the interest chargeable u/ss 234B and 234C of the Act while giving effect to this order.
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