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2022 (11) TMI 1367 - AT - Income TaxTP Adjustment - comparable selection - A.R. submitted regarding exclusion of comparable companies as they fail the higher threshold limit of Rs. 200 crores for turnover filter - HELD THAT:- The turnover of Infosys Ltd. is at Rs.59,289 crores as against the turnover of the assessee at Rs.75.43 crores. In our opinion, this issue is covered by the judgement of the coordinate bench in the case of Mindteck India Ltd. [2022 (6) TMI 1334 - ITAT BANGALORE] Tribunal consistently holding that when the turnover exceeding Rs.200 crores is to be excluded from the list of comparable to determine the ALP of International transaction with the A.E. In view of the above, we direct the AO/TPO to exclude Infosys Ltd. from the list of comparables. Great Software Laboratory Pvt. Ltd. - As the functionality details was not considered by the AO/TPO and also by Ld. DRP and hence, the issue is remitted to the file of AO/TPO for reconsideration. Accordingly, the issue is remitted back to the file of AO/TPO to examine the issue in the light of above details of functions furnished by the assessee before us. Mind Tree Ltd. - A.R. furnished the details of functionality before us. These facts are not at all commented by the AO/TPO or by Ld. DRP. Hence, the issue is remitted back to the file of AO/TPO for fresh consideration in the light of above functionality of Mind Tree Ltd. company. Persistent Systems Ltd. - This issue is infructuous in view of our findings on the basis of turnover filter of this company. Aptus Software Labs Pvt. Ltd. - Main contention of assessee is that the employee cost filter applied by AO/TPO is 20%, whereas in this case, employee cost filter is less than 20%. Hence, it should be excluded - In our opinion, these facts are to be examined by AO/TPO in the relevant assessment year 2016-17. Accordingly, the issue is remitted back o the file of AO/TPO only in respect of assessment year 2016-17. Consilient Technologies Pvt. Ltd. - As it is appropriate to remit this issue to the file of AO/TPO to consider it afresh in the light of submissions made by the Ld. A.R. with regard to functionality of the comparable. This issue is accordingly remitted to the file of AO/TPO for fresh consideration. L&T Infotech Ltd. to be rejected on turnover filter. Sagarsoft (India) Limited satisfies all the contents related to the functionality test. Exclusion of Inteq BPO from the final set of comparable companies for ITES segment - We are of the opinion that this comparable came for consideration in the case of Vee Technologies Pvt. Ltd .[2022 (3) TMI 1533 - ITAT BANGALORE] wherein held that this company is involved in business process management services and cannot be considered as a comparable to a company providing ITeS such as the assessee. Being so, we direct the AO/TPO to exclude Inteq BPO Services Pvt. Ltd. from the list of comparables. Directed accordingly. ISN Global Solutions Pvt. Ltd. - In this case, the AO/TPO has applied filter that minimum 75% of operating revenue should be from exports. However, this comparable fails this test. Hence, in our opinion, the AO/TPO is justified excluding this company ISN Global Solutions Pvt. Ltd. (ISN Global) from the list of comparables in ITeS segment. Accordingly, rejection of this company in the list of comparables by the Ld. AO/TPO is justified. R Systems International Ltd. - This company has not included in the search matrix conducted by the AO/TPO. Being so, at this stage, it is not possible to include this company in the list of comparables.Hence, it is rejected for exclusion from the list of comparables.
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