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2017 (11) TMI 1856 - AT - Income TaxTP Adjustment - Comparable selection - functional similarity - HELD THAT:- Accentia Technologies Ltd. - The said concern was pointed out to be not functionally comparable as it was engaged in providing services of medical transcription which was not at all comparable to the back office support services provided by the assessee. We find merit in the plea of assessee in this regard. Also extraordinary event of merger, which had happened during the financial year under consideration. Following the case EQUANT SOLUTIONS INDIA PVT. LTD. VERSUS DCIT, CIRCLE 3, GURGAON [2016 (1) TMI 1260 - ITAT DELHI] we hold that Accentia Technologies Ltd. be excluded from final list of comparables. Jeevan Softech Ltd - The services which are provided by the said concern include medical writing, clinical data management, biostatistics and other services. The name of said concern has also been changed to Jeeven Scientific Technology Ltd. The assessee on the other hand, is engaged in providing back office support service. Accordingly, we hold that the said concern is not comparable to the assessee and to be excluded from final list of comparables. Fortune Infotech Ltd - The assessee is operating in ITES segment, wherein the services are being provided to associated enterprises, whereas the concern Fortune Infotech Ltd. had its own unique web based software, through which it provides services to its customers. The said concern is not comparable to the entity engaged in ITES segment, has been deliberated upon by the Delhi Bench of Tribunal in Equant Solutions India Pvt. Ltd. Vs. DCIT [2016 (1) TMI 1260 - ITAT DELHI] and it has been held that the concern develops its own software for performing specialized services in medical transcription and patient record management and the same was held to be not functionally comparable to an entity engaged in ITES segment. We find merit in the claim of assessee that once the concern is functionally not comparable to the assessee, then the same cannot be included in final list of comparables. Excluding certain comparables in software segment - exclusion of Infosys Ltd. from final list of comparables, which is so directed by the DRP - HELD THAT:- We find that exclusion of said concern Infosys Ltd. on the basis of its high turnover and brand value has been considered by us in several decisions and because of its huge brand value and also high turnover, the said concern is not comparable to the assessee and hence, the margins of Infosys Ltd. are to be excluded from final list of comparables. Accordingly, we hold so. Once the said concern is excluded from final list of comparables, then the assessee claim that its margins are within +/-5% of mean margins of comparables finally selected and hence, no TP adjustment is to be made in the hands of assessee.
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