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2021 (10) TMI 1339 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- Infosys Ltd. - As the assessee had sought for exclusion of only Infosys Limited based on the turnover filter. We find that the turnover of Infosys Limited is Rs.43,300 crore, which is thousand times more than the turnover of the assessee-company. Therefore Infosys Limited cannot be compared to the assessee, in view of the judicial pronouncements cited supra. Hence, we direct the AO / TPO to exclude Infosys Limited from the list of comparables. For eight other comparables, we find that the assessee before the Income Tax Authorities has not sought for exclusion of the same on turnover filter. Therefore, the eight companies sought to be excluded on turnover filter are restored to the files of the AO / TPO. The AO / TPO is directed to verify the turnover of these eight companies and exclude the same from the list of comparables if the turnover of each company had exceeded Rs.200 crore for the relevant assessment year. Infobeans Technologies Limited - In the instant case, the assessee is a captive service provider to its AEs and the concerned assessment year is 2015-2016. The Tribunal in the case of Zynga Game Network India Private Limited (2021 (4) TMI 208 - ITAT BANGALORE] was considering a case of an assessee, who is also a capital service provider to its AEs and was concerned with identical assessment year, namely, A.Y. 2015-2016. Therefore, following the order of the Tribunal in the case of Zynga Game Network India Private Limited (supra), we direct the AO / TPO to exclude Infobeans Technologies Limited from the list of comparables. It is ordered accordingly. Inteq Software Private Limited - On perusal of the abridged balance sheet of Inteq Software Private Limited, it is clear Inteq Software Private Limited is involved in multifarious services such as application services, software testing, data warehousing, EDI, BPO, staffing etc. However, we noticed from the AO / TPO and the DRP’s order, it is stated that Inteq Software Private Limited is only involved in software development services and the entire turnover is from such service. It is not clear how DRP had arrived at such a conclusion. The profit and loss account of Inteq Software Private Limited is not on record. Therefore, we are not in a position to verify the veracity of the findings of the AO / TPO and the DRP, which is contrary to the narration in the balance sheet of Inteq Software Private Limited. Therefore, we deem it appropriate to restore this issue to the files of AO / TPO. The AO / TPO is directed to afford a reasonable opportunity of hearing to the assessee and decide whether Inteq Software Private Limited is to be included in the comparable list of companies. Aspire Systems (India) Private Limited - On perusal of the balance sheet of Aspire Systems (India) Private Limited, it is seen that the said company is an outsourced technology service company. It is also stated in the balance sheet that there is income from power generation. Since the profit and loss account of the assessee company is not enclosed, we are not in a position to examine the DRP’s statement that Aspire Systems (India) Private Limited is a pure software development service provider. Therefore, in the facts of the instant case, we deem it appropriate to restore the issue to the files of the AO / TPO. The AO / TPO is directed to afford a reasonable opportunity of hearing to the assessee and take a decision whether Aspire Systems (India) Private Limited can be a comparable. Kals Information Systems Limited, E-Zest Solutions Limited, and CGVAK Software & Exports Limited - As it is clear that the above three companies were accepted as comparable, however, in the final list of comparables, the same was omitted to be included. Hence, we direct the AO / TPO to include the same in the final list of comparables for determination of arm’s length price of the international transaction.
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