Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 1337 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- Exclude the company M/s. Datamatics Business Solutions Ltd. from the list of comparables as this company is a KPO company and not comparable to assessee company. Infosys BPM Services Pvt. Ltd is to be excluded as this company is functionally dissimilar and use robotics automation and diversified activities. Manipal Digital Systems Pvt. Ltd. be excluded as this company is functionally dissimilar. CES Ltd. (seg) is functionally different and therefore ought to be rejected. Functionally Different as it is engaged in KPO services/. SPI Technologies India Pvt. Ltd. be excluded from the list of comparables as functionally dissimilar and ought to be rejected. He further submitted that the company had presence of extraordinary events, presence of intangibles and therefore ought to be rejected. See M/S. NTT DATA INFORMATION PROCESSING SERVICES PVT. LTD [2022 (7) TMI 1401 - ITAT BANGALORE] R Systems International Ltd. is remitted to AO/TPO for fresh consideration to verify whether it satisfies all the filters adopted by TPO while selecting comparables. Ordered accordingly. BNR Udyog Ltd. is to be included in the list of comparables to determine the ALP of international transactions. Bhilwara Infotechnology Pvt. Ltd. - remit this issue to the file of AO/TPO to verify whether this company satisfies all the filters adopted by the AO/TPO while selecting comparables. Working capital adjustment - As there would remain no comparable uncontrolled transactions for the purpose of comparison. The transfer pricing exercise would therefore fail. Therefore in keeping with the OECD guidelines, endeavor should be made to bring in comparable companies for the purpose of broad comparison. Therefore the working capital adjustment as claimed by the Assessee should be allowed. Treatment to lease equalization cost - Whether be excluded while computing the operating markup of the Appellant? - contention of the ld. A.R. is that the assessee has itself disallowed this expenditure while computing the income and not claimed any expenditure and this cannot be treated as operating item while computing the operating mark-up of the assessee in determining the ALP while applying the TNMM method - HELD THAT:- In our opinion, it is appropriate to remit the issue to the file of AO/TPO to examine whether assessee has claimed any deduction towards lease equalization cost - If assessee itself has disallowed this expenditure while computing the total income of the assessee, it cannot be treated as operating expenditure while computing the operating mark-up of the assessee in determining the ALP while applying the TNMM method. Accordingly, the issue in dispute is remitted to the file of AO for reconsideration.
|