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2018 (11) TMI 1793 - AT - Income TaxTP Adjustment - Comparable selection - selection of comparables by the TPO and also challenges appropriateness of RPT filter of more than 25% of sales - HELD THAT:- Comparability of M/s.Universal Print Systems Ltd. - As decided in M/s.CGI Information Systems & Management Consultants Pvt.Ltd. [2018 (4) TMI 1755 - ITAT BANGALORE] none of the objections raised by the Assessee in this regard about lack of information about allied services performed by die pre-press BPO segment of this company and the break-up of the revenue from such allied services have been dealt with specifically by the TPO or DRP. Since the comparability of this company is being remanded to be TPO for consideration of adjustments as mentioned above, the objection with regard to functional comparability should also be looked into by the TPO in the remand proceedings on the basis of materials which he may gather u/s. 133(6) of the Act, The Assessee should be given opportunity of being heard by the TPO before the issue is decided by the TPO - we remand this comparable to the file of the TPO/AO for fresh adjudication on the above lines. TCS E Service Ltd. - Since the appellant company is into low end BPO, it cannot be compared with KPO service provider. BNR Udyog Ltd - this company passes RPT filter as well as income from providing ITES being more than 75% of its revenue, this company has to be regarded as comparable company. No other arguments were advanced for exclusion of this company. Hence this company is held to be comparable with that of the Assessee. Excel Infoways Ltd - The contention as regards employee cost filter, nothing was shown to us that the findings of the TPO or Hon'ble DRP are contrary to the material on record. However, as regards diminishing revenue filter, this filter was never applied by the TPO, needless to say application of new filter is not permissible at a later stage. This comparable deleted from the list of comparables on the ground that it is engaged in the business of software testing, verification and validation of software. Working capital adjustment - HELD THAT:- We find merit in the contention of the learned AR of the assessee as there was no need for making any negative working capital adjustment as held in the case of NTT DATA India Enterprise Application Services (P.) Ltd. vs. Asst.CIT [2015 (1) TMI 604 - ITAT HYDERABAD] Risk adjustment - HELD THAT:- As regards risk adjustment, we find that this issue was not raised before the TPO. It is only before Hon'ble DRP, a claim was made towards risk adjustment. Written submissions were filed before Hon'ble DRP. Hon'ble DRP held that no accurate adjustment can be made in this case. Even before Hon'ble DRP, no working of risk adjustment was furnished. We do not find any reason to interfere with the findings of the Hon'ble DRP.
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