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2022 (3) TMI 338 - AT - Income TaxTP Adjustment - comparability - exclude the Infobeans Systems Private Limited from the final set of comparable companies - HELD THAT:- As no segmental details were available and the said company was earning foreign exchange from export of goods on FOB basis which is clear from paper book. In our opinion, when there is no information the proper comparability cannot be examined in view of absence of segmental details. As demerger of business of Seed Enterprises Private Limited was taken place wherein the said concern had filed revised accounts which clearly shows the financial statements of the said concern included the financial statements of software business of demerged company which in our opinion is an extraordinary event which has taken place making the said concern has not comparable to the company. Thus we direct the AO/TPO to exclude Infobeans Systems Private Limited from the final set of comparables. Thirdware Solutions Limited cannot be included in the final list of comparables - As we note that this Tribunal directed the AO/TPO for detailed factual verification based on annual report and other relevant documents in order to verify nature and scope of functions of Thirdware Solutions Limited. The ld. DR agreed for remand the said issue to the file of AO/TPO for its fresh verification in terms of direction rendered by this Tribunal in assessee”s own case in A.Y. 2012-13. Accordingly, we direct the AO/TPO follow the same direction as contained in order [2021 (5) TMI 481 - ITAT PUNE] for A.Y. 2012-13. Thus, the additional ground raised by the assessee is allowed for statistical purpose. Seeking deduction paid towards Education Cess under Finance Act while computing the taxable income - HELD THAT:- We note that the assessee paid Education Cess while computing the taxable income. The Hon”ble High Court of Bombay in the case of Sesa Goa Ltd [2020 (3) TMI 347 - BOMBAY HIGH COURT] was pleased to hold that the Education Cess is an allowable expenditure as per the provision of the I.T. Act - We direct the AO to allow deduction in respect of Education Cess paid by the assessee. Accordingly, the additional ground No. 14 raised by the assessee is allowed. Include the M/s. Lucid Software Limited as comparable in the final list of comparable companies as engaged in rendering software development services and 95% of operating revenues were derived from software services. Evoke Technologies Private Limited should be considered as comparable in view of the finding of TPO in earlier order concerning A.Y. 2012-13. Harbinger Software Limited is a comparable company. Saven Technologies Limited be excluded from the final list of comparable companies as it was engaged in 100% Related Party Transaction (RPT) sales to the total revenue and accordingly held the same as not comparable.
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