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2021 (1) TMI 621 - AT - Income TaxTP Adjustment - Comparable selection - HELD THAT:- For the purpose of exclusion or inclusion of any comparable, only two things are required to be looked into (1) the functional profile of the assessee, (2) the annual reports of the comparable companies. Accentia Technologies Limited - Merely because the assessee as well as the comparable company operates in different business segment, it does not make their functions different. It is undisputedly both are engaged in BPO services. As the comparable company has only one segment of Health Care BPO services, we do not find any requirement of segmental information. With respect to the extra-ordinary events stated by the ld. AR it is apparent that this company has entered into scheme of amalgamation wherein earlier the subsidiary of the company, amalgamated with the assessee company, with effect from 1st April, 2008. Therefore, in this year there is no extra-ordinary event but it was in financial year 2008-09. There is no fluctuation in profit. Therefore we find this comparable company functionally similar and does not have any other reasons to exclude it. In view of this we do not find any infirmity in the order of the ld. Lower authorities in retaining this comparable. This comparable company cannot be excluded. Fortune Infotech Ltd. fails the receding sales filter applied by the TPO and also owns its own software Finetran & index - this comparable company does not pass is a filter applied by the learned TPO himself. In view of this, we direct the ld. TPO to exclude it. Igate Clobal Solutions Ltd - Such a large company whereby turnover of 509 times cannot be considered as a comparable. We direct the ld. TPO to exclude the same. Infosys BPO Ltd.- The turnover of the comparable is ₹ 1126 crores which is 616 times more than the assessee. Therefore, on this criteria itself, we direct the ld. TPO to exclude this comparable company. TCS E-Serve International Ltd - It has a huge brand value as it belongs to Tata Group. We find that this comparable company has a turnover of ₹ 1,492,956,000/– whereas the turnover of the assessee is merely ₹ 1.82 crores. Therefore on this criteria itself the learned TPO is directed to exclude this comparable company. TCS E Serve Limited company has a turnover of ₹ 1359 crores and therefore on this criteria itself the learned TPO is directed to exclude this comparable company.
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