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2019 (2) TMI 1957 - AT - Income TaxTP Adjustment - Comparability - Application of onsite revenue filter – M/s. Acropetal Technologies Ltd. - HELD THAT:- We find that the DRP has excluded ‘Acropetal’ from the list of comparables on the grounds of it being functionally not comparable to the assessee in the case on hand and not on the ground of application of ‘on-site’ filter as alleged by Revenue in the grounds raised - Revenue in this appeal has neither challenged DRP’s action in excluding ‘Acropetal’ from the list of comparables on grounds of not being functionally comparable to the assessee nor has Revenue been able place on record any factual evidence to controvert DRP’s finding that ‘Acropetal’ is not functionally comparable to the assessee who is engaged in provision of ITES/BPO services - we find no merit in the grounds raised by Revenue and consequently uphold the DRP’s order excluding Acropetal Technologies Ltd., from the list of comparables as it is not functionally comparable to the assessee in the case on hand. Exclusion of /s. Jeevan Scientific Technology Ltd., (‘Jeevan’) - Revenue has challenged the exclusion of ‘Jeevan’ from the list of comparables to the assessee by the DRP on grounds of application of service income filter of 75%; which was infact a filter applied by the TPO. Apart from raising this ground (supra), Revenue has not placed on record any factual material evidence to controvert the DRP’s finding that this company ‘Jeevan’ had passed the 75% revenue filter applied by the TPO. Even otherwise, the DRP has, inter alia, excluded ‘Jeevan’ on grounds of its huge fluctuating margins over the last few years which has not been challenged by Revenue. In this factual matrix of the case, as discussed above, we uphold the action of the DRP of excluding this company ‘Jeevan Scientific Technology Ltd.,’ from the list of comparables for failing the 75% revenue filter applied by the TPO and on account of its hugely fluctuating margins over the last few years which indicate that there were certain peculiar circumstances influencing the profit margins of the company.
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