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2021 (1) TMI 72 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- On perusal of DRP's order and the ITAT, Bangalore's order in the case of Advice America Software Development Center Pvt. Ltd., [2018 (5) TMI 1536 - ITAT BANGALORE] it is found that segmental details are available in the financials of Persistent Systems Ltd. and the company is engaged in the software development services and, therefore, this company is comparable. Since the details are available as per the order of the ITAT, Bangalore in the case of Advice America Software Development Centre Pvt. Ltd. and in the order of DRP, we are of the view that this issue needs verification by AO/TPO to decide whether the company is comparable or not with the segmental details. Therefore, we deem it fit to remit the matter back to the file of TPO/AO to examine financials of the Persistent Systems Ltd., and decide the issue afresh on merits. Infobeans Technologies Ltd exclusion on the ground that the company is found to be functionally similar - DR submitted that the company Infobeans is functionally similar, no material was placed before us to substantiate the contention of the DRP/TPO. AR also except stating that the company engaged in providing high end software services no other information was provided. As observed from the order of the DRP, we find that the company Infobeans satisfies all the filters and engaged in software services. Since, both the parties failed to substantiate their claim for inclusion or exclusion, we remit this issue back to the file of the AO/TPO to examine the contention of the ld. AR and DR with regard to functions/financials for exclusion/inclusion of comparable in the final list and decide the issue on merits after giving opportunity of being heard to the assessee. This issue is allowed for statistical purposes. Larsen & Toubro Infotech Ltd - As decided in M/S. EPAM SYSTEMS VERSUS ACIT, INDIA PVT LTD., CIRCLE-17 (1) , HYDERABAD. [2018 (11) TMI 1710 - ITAT HYDERABAD ] L&T Infotech Ltd. is functionally dissimilar. Inclusion of CAT Technologies Ltd - whether income from software services is 75% and more for inclusion in the final list of comparables - Out of total receipts of ₹ 7.44 crores, as seen from the order of ITAT, software development receipts amounts to ₹ 5.5 crores and the remaining receipts were consultancy fee receipts and medical transcription receipts etc. Ld. DR objected for inclusion of consultancy receipts, medical transcription receipts as software development receipts and the Ld. AR did not place any material to support it's claim. Therefore, this issue needs verification at the end of the AO/TPO whether the same constitutes SDS or not. Therefore, we remit the issue back to the file of AO/TPO to examine whether the receipts from software development services are more than 75% or not in the case of CAT Technologies Ltd. and in case, the revenue from software development services are more than 75%, the assessee succeeds in the filter and CAT technologies is required to be included in the final list of comparables. This issue is allowed for statistical purposes. Adjustment of international transaction to the value of international transaction as against adjustment made by the AO at the entity level - HELD THAT:- Both the parties have agreed to remit this issue to the file of AO to examine the issue and to make adjustment of transfer pricing to the value of international transaction. Accordingly, we remit this issue back to the file of AO/TPO to make appropriate adjustments. This ground is allowed for statistical purposes.
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