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2019 (4) TMI 869 - AT - Income TaxTP adjustment - selection of comparable - international transactions - functional similarity - Infosys BPO ltd.company cannot be a comparable to the assessee company as it has functional dissimilarity as well as extraordinary events took place during the year and, further, it has high turnover of ₹ 1,312 crores - HELD THAT:- As decided in HYUNDAI MOTOR INDIA ENGG. PVT. LTD. VERSUS DY. COMMISSIONER OF INCOME- TAX, CIRCLE – 2 (2) , HYDERABAD [2018 (6) TMI 505 - ITAT HYDERABAD] other contentions with regard to the brand value and brand building exercise, having huge asset base, can be considered to arrive at the conclusion that Infosys BPO is functionally not similar to that of assessee. Infosys BPO stands on its own as an exclusive BPO of the Infosys Technologies and in earlier years, generally Infosys BPO is excluded in many of the cases. Even though the profits of the Infosys BPO Ltd. is reasonable and no super profits are earned, because of its big brand value this company has to be excluded on the grounds of functional dissimilarity on FAR Analysis. Therefore, we direct the Assessing Officer/TPO to exclude this company. TCS eServe Ltd. - following the turnover filter as well as taking note of the fact that it owns and possesses brand value and intangibles as compared to the assessee which does not own such assets, we direct that this company be excluded from the list of final comparables. Crystal Voxx Ltd - As relying on assessee's own case for AY 2013-14 we direct the TPO to verify the comparability of this company. Therefore, the matter is remitted to the file of the TPO for fresh analysis. This ground is allowed for statistical purposes. Adjustment for risk differences - HELD THAT:- As relying on HELLOSOFT INDIA (P.) LTD. [2013 (10) TMI 747 - ITAT HYDERABAD] we direct the AO/TPO to allow the risk adjustment in accordance with the Rule 10B(1)(e) considering the fact that assessee is a captive service provider to its AEs. Accordingly, ground raised by the assessee is allowed for statistical purposes. MAT credit disallowed the same while computing the tax liability for this AY - HELD THAT:- We direct the AO to verify the claim of the assessee and allow the MAT credit as per law. This ground is allowed for statistical purposes.
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