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2020 (11) TMI 939 - AT - Income TaxTP Adjustment - adjustment on account of adjustment of software development services segment for exclusion of only two comparables namely Infosys technologies Ltd and Tata Elexi Ltd - HELD THAT:- Infosys technologies Ltd - In view of huge turnover of the comparable company, relying on the decision of Pentair water private limited [2016 (5) TMI 137 - BOMBAY HIGH COURT] and Agnity India technologies Ltd [2013 (7) TMI 696 - DELHI HIGH COURT] the above comparable is directed to be excluded. Tata Elxis Ltd - comparable company is a design company that blends technology, creative and engineering to help customers transform ideas into world-class products and solutions. DRP though has considered the above functions of the comparable company however it is directed that the comparable company provides software development services which are similar to the IT services provided by the assessee. In view of this we find that the direction of the learned dispute resolution panel is not based on the appreciation of the functions and the product profile of the comparable company. In view of this, we direct the learned transfer pricing officer to exclude the above comparable. Adjustment on account of the overdue receivable from the associated enterprises - working capital adjustment allowed - HELD THAT:- When working capital adjustment is granted to the assessee there is no requirement once again of making any adjustment on account of the overdue receivable from associated enterprises as the sundry debtors outstanding of the assessee includes outstanding receivable from associated enterprise. In view of this, we direct the learned transfer pricing officer to delete the adjustment on account of outstanding receivable from associated enterprise.
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