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2022 (5) TMI 1515 - AT - Income TaxTP Adjustment - comparable selection - Maveric System Ltd. in the software segment as it is a loss making company and failed to export filter - HELD THAT:- We do not find merit in this contention raised on behalf of the Revenue i.e. the company is a loss making company for the last 3 years. This company is profit making company for the financial year 2009-10, therefore, it cannot be said that this company is loss making company in the last 3 preceding financial years. Accordingly, the contention raised on behalf of the Revenue that it is continuous loss making company for last 3 financial years cannot be accepted. As regards to the another contention of the Revenue that the said company failed to meet the filter of 75% export to the total turnover, it is clear that from the financial results shown in the Schedule 10 to the Balance Sheet at page no.564 of the Paper Book, the total turnover of the company is Rs.56,90,13,529/- out of which the domestic turnover is only Rs.13,73,08,982/- and export turnover is Rs.43,17,04,547/- which constitutes 76.78% of the total turnover clearly meets the filter of 75% of export to total sales. In view of this fact, we do not find any merit in the grounds of appeal no.1 raised by the Revenue. Accordingly, the ground of appeal no.1 stands dismissed. India Tourism Development Corporation Ltd. as comparable in the business support services segment - Revenue is seeking exclusion of this company on the ground that it is loss making company and also failed to meet export filter. This company was rejected by the TPO from the set of comparables on the ground of functionality differences - Admittedly, this is a Government of India company and this company is not comparable with that of the respondent-assessee company which is a pure private company as Govt. company is not driven by profit motive alone, but other consideration also weigh in such as discharge of social obligation etc. as held in the case of CIT vs. Thyssen Krupp Industries India (P.) Ltd.,[2016 (4) TMI 88 - BOMBAY HIGH COURT]. Thus, it is not a comparable. In the circumstances, it is not necessary for us to advert to other contentions raised seeking exclusion of this company by the Revenue. Accordingly, we direct the Assessing Officer/TPO to exclude this company from the list of comparables in respect of business support services segment. Appeal filed by the Revenue stands partly allowed.
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