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2020 (8) TMI 441 - AT - Income TaxTP Adjustment - Comparable selection - Dispute Resolution Panel (DRP) for inclusion of Coral Hub Limited as comparable in design engineering service segments of assessee - HELD THAT:- The company is primarily engaged in providing IT enabled services and the production and sale of such services cannot be expressed in any generic units. Further, he submitted that the TPO accepted Coral Hub Limited as comparable to the assessee for A.Y. 2010-11. We note that the DRP reproduced the comparable companies for A.Y. 2010-11 in its order which clearly shows the Coral Hub Limited was taken as comparable. We find in the annual report the entire income of Coral Hub Limited has been shown as income from IT enabled services. No infirmity in the order of AO/DRP in accepting the Coral Hub Limited as comparable to the activities of assessee in the final list of comparables. Thus, ground Nos. 1 and 2 raised by the Revenue are dismissed. Inclusion of Cosmic Global Limited as comparable in design engineering service segments of assessee - We find the DRP reproduced the Circular issued by the CBDT which clearly shows that the CBDT explained 15 categories which fall under the IT enabled services products or services amongst which medical transcription is treated as IT enabled services. Therefore, we find no infirmity in the order of AO/DRP in inclusion of Cosmic Global Limited in the final set of comparables. Thus, ground raised by the Revenue are dismissed. Include Microgentics Systems Limited in the final set of comparables - For medical transcription, training will be given by the Doctors and they are not at all engaged in medical transcription activity and the services of assessee are requires highly skilled personnel because it is engaged in designing. We note that the DRP having found the medical transcription services which represents IT enabled services treated the activities of Microgentics Systems Limited is functionally similar to the assessee and directed the TPO to include Microgentics Systems Limited as comparable in the final list of comparables. Thus, we find no infirmity in the order of DRP/AO. Accordingly, ground raised by the Revenue are dismissed. Rejection of Eclerx Services Limited - Eclerx Services Limited is not comparable and the Assessing Officer/TPO is directed to exclude for the purpose of benchmarking of the international transactions. Rejecting the R Systems International Limited in the comparable set on account of persistent loss making company - DR submits that the R Systems Limited should not be accepted as a comparable because of different year ending - there is no dispute that foreign exchange gain is treated as non operating revenue. The assessee is persistent loss making company. Therefore, we find no infirmity in the order of AO in excluding R Systems International Limited on account of persistent loss making company as comparable to the assessee and thus, ground raised by the assessee is dismissed.
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