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2023 (3) TMI 82 - AT - Income TaxTP Adjustment - Comparable selection - exclude the foregoing comparable companies in its ITES segment - HELD THAT:- Entities included by the learned lower authorities i.e., Vitae International Accounting Services Private Limited, Access Healthcare Services Private Limited and Integra Software Services Private Limited are also found to be not engaged in the assessee’s segment since they have been carrying-out their business activities and deriving revenues from accounting, healthcare services and e-publishing services, respectively and, therefore, do not have even broader comparability in the segment in issue before us. This is indeed coupled with the fact that M/s. Integra Software Services Private Limited had undergone a merger scheme with M/s. Integra Infotech Private Limited as per the NCLT order to this effect in the relevant previous year. Faced with the situation, we direct the TPO to exclude all the instant six comparables and compute the assessee’s arm’s length price [ALP] adjustment accordingly. Include M/s. Cheers Interactive (India) Private Limited, I Services Private Limited and Sundaram Business Services Limited which stand excluded in the learned lower authorities respective orders. The first and foremost comparable herein M/s. Cheers Interactive (India) Private Limited had not derived any revenue in “ITES” segment. We thus reject the assessee’s arguments seeking its inclusion in the array of comparables. M/s. I Services Private Limited it prima facie emerges in the assessee’s paper book that this entity carried out its business activities in BPO sector. The assessee’s case before us is that the said segment is very much identical to its “ITES” segment. Faced with the situation, we remit the instant issue back to the learned TPO for his fresh adjudication on merits without commenting anything further at this stage. Third comparable Sundaram Business Services Limited could hardly dispute that it’s revenue from operation nowhere specified any “ITES” activity. We thus decline the assessee’s arguments seeking to include this comparable in ALP computation. Ordered accordingly. Negative working capital adjustment when it had not carried any such working capital risk. Learned counsel quotes Inductis India (P.) Ltd. [2018 (8) TMI 1205 - ITAT DELHI] reiterating the very proposition. Revenue’s case on the other hand is that the instant issue indeed requires the TPO’s afresh factual verification. Faced with the situation, we restore the assessee’s instant additional ground back to TPO in very terms.
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