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2021 (2) TMI 1086 - AT - Income TaxTP Adjustment - arm's length price adjustment - comparable selection - assessee's sole argument during the course of hearing is regarding the PLI pertaining to software development services challenges the alleged wrongful inclusion of M/s. Infosys Limited as a comparable entity in the TPO's order - HELD THAT:- We notice during the course of hearing that this tribunal's co-ordinate bench decision(s) in M/S. INFOR (INDIA) PVT. LTD. [2020 (12) TMI 235 - ITAT HYDERABAD] as held that the very entity M/s. Infosys Ltd. to be not a valid comparable - Also in YAHOO SOFTWARE DEVELOPMENT INDIA PVT. LTD. [2020 (2) TMI 1365 - ITAT BANGALORE] has also directed the department to exclude M/s. Infosys Limited from the array of comparables by adopting the very reasoning. We adopt the above detailed reasoning and direct the TPO to redetermine assessee's ALP after excluding Infosys Ltd. in above terms. Import of free of cost software for the purpose of testing services - We express our agreement with the Revenue's arguments supporting the TPO's conclusion that such free of cost import services indeed form international transaction as per provisions of the Act. The fact however remains that the impugned addition made in the TPO's order has not taken into account any comparable or market condition(s) regarding captive service provider segment. Nor the TPO has adopted any of these methods, direct or indirect, provided in the Income Tax Rules so as to make the impugned adjustment. We find no reason to sustain the same on merits therefore. This impugned adjustment is directed to be deleted. Working capital adjustment - We accept assessee's working capital adjustment in principle and direct the TPO to verify the necessary facts as per law.
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