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2023 (2) TMI 1104 - AT - Income TaxTP Adjustment - determination of ALP of the back-office support services rendered by the assessee for which the assessee received payments from its AE - Comparable selection - HELD THAT:- Concentrix Daksh Services India Pvt. Ltd. in the search matrix of BPO back-office services and therefore is no evidence brought on record to show that the predominant activity of the assessee is not that of backoffice support services. In this regard, we also notice that in the search matrix / filter applied by the assessee, the assessee itself has adopted a filter of choosing companies with income from a major line of activities ≥ 50% of the total revenue selected for performing similar functions such as the assessee. It has also applied a filter of comparing companies performing broadly comparable companies of rendering services with similar cost structure. TPO on his part has also adopted a filter whereby he has chosen companies having service income of 75% or more in each of the segments. We also notice that it has not been demonstrated as to how owning intangibles will render this company out of the ambit of comparability. In the given circumstances of the case, we are of the view that Concentrix was rightly included as a comparable company by the TPO. Tricom India Ltd. (“Tricom”) - In the case of 24/7 Customer.com (P) Ltd. [2013 (1) TMI 45 - ITAT BANGALORE] for AY 2004-05, the assessee was engaged in back-office support BPO services and Tricom was chosen as a comparable company by the TPO. The Tribunal held in paragraph 15.3.3 of its order that Tricom had a unique software developed in house which renders specialized services in it’ area of specialization given the company a competitive edge. Since this company had unique intangible, it was regarded as not comparable with a normal back-office service provider. Following the view taken in the aforesaid decision by a co-ordinate Bench, we are of the view that Tricom ought to be excluded from the final list of comparables. We hold and direct accordingly. TPO is directed to compute ALP of the international transaction as per the directions contained in this order after affording the assessee opportunity of being heard.
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