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2021 (2) TMI 183 - ITAT BANGALORETP Adjustment - Comparable selection - application of turnover filter in choosing comparable companies - companies had turnover which was in excess of ₹ 200 crores and therefore these companies cannot be regarded as a comparable in the case of the assessee whose turnover was only ₹ 18 crores - HELD THAT:- As decided in in the case of Autodesk India (P.) Ltd. [2018 (7) TMI 1862 - ITAT BANGALORE] decisions cited by the learned DR before us cannot be the basis to hold that high turnover is not relevant criteria for deciding on comparability of companies in determination of ALP under the Transfer Pricing regulations under the Act. For the reasons given above, we uphold the order of the CIT(A) on the issue of application of turnover filter and his action in excluding companies accordingly. Assessee seeks inclusion of only 1 comparable being, Akshay Software Technologies Ltd. - As decided in case of M/s NXP India Pvt Ltd. [2020 (5) TMI 86 - ITAT BANGALORE] this company is engaged in providing professional services, implementation, support and maintenance of ERP products and other services. These are nothing but software development services, as is evident from the notes forming part of financial statements which is placed in paper book at page 1825. Further the revenue from software services accounts for 99.45% of the total revenue of the company is evident from the financial statements placed on record. Being so, we direct TPO to consider this company as comparable to assessee’s case while selecting the comparables. Negative working capital adjustment without appreciating the fact that assessee is a captive service provider - We find that in the case of M/S. SOFTWARE AG BANGALORE TECHNOLOGIES PVT. LTD. [2016 (3) TMI 1384 - ITAT BANGALORE] passed by this Tribunal, it has been held that negative working capital adjustment shall not be made in case of a captive service provider as there is no risk and it is compensated on a total cost plus basis. We therefore direct Ld.TPO to compute the ALP in accordance with the directions contained in this order after affording assessee opportunity of being heard.
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