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2023 (3) TMI 1091 - ITAT CHENNAITP Adjustment - comparables selection - HELD THAT:- Accentia Technologies Ltd be rejected on the ground that it was functionally different since it was providing high-end software services which could not be compared to the functions of the assessee - this entity has been excluded by Tribunal in assessee’s own case for AY 2009-10 [2014 (9) TMI 126 - ITAT HYDERABAD] as well as in AY 2010-11 [2016 (9) TMI 1308 - ITAT HYDERABAD] Eclerx Services Ltd. - As this entity was involved in diverse nature of services and no segmental data was not available. In AY 2010-11.[2016 (9) TMI 1308 - ITAT HYDERABAD], Ld. DRP excluded this entity. The Tribunal dismissed the revenue’s plea on the ground that there was no change in activities of this entity in comparison to AY 2009-10 [2014 (9) TMI 126 - ITAT HYDERABAD] In AY 2011-12 [2018 (5) TMI 239 - ITAT HYDERABAD], this entity was excluded by Ld. DRP on functional differences and extra ordinary events. The action of Ld. DRP was confirmed by Tribunal. Therefore,we direct Ld. AO / TPO to exclude this entity. Infosys BPO Ltd. - We find that this entity has been excluded by Tribunal in AY 2009- 10 for the reason that this entity had brand value, high turnover, huge asset base and accordingly, not comparable. In AY 2011-12, this entity has been excluded by Ld. DRP by relying upon the decision of Tribunal in AY 2009-10. The same was upheld by Tribunal. TCS eServe Ltd - This entity is functionally different. This entity has presence of brand, having huge turnover, extreme profit margins and huge employee base. We find that this entity has been excluded by Tribunal in AY 2010- 11. In AY 2011-12, this entity has been excluded by Ld. DRP which has been confirmed by Tribunal. Therefore, considering the same, we direct Ld. AO / TPO to exclude this entity. Crossdomain Solutions Pvt. Ltd. - Before us, the Ld. AR has submitted that this entity is functionally different and this entity does not appear in the search carried out by Ld. TPO. For the said reason as well as following consistent stand of Tribunal in AYs 2009-10 to 2011-12, we direct Ld. AO / TPO to exclude this entity. Crystal Voxx Limited - Since this entity has failed service income filter at entity level and it is a persistent loss-making company, the same has rightly been rejected. We direct Ld. TPO / AO to re-compute the transfer pricing adjustments after revising comparability matrix as above. In case the margins of the assessee vis-à-vis the resultant comparable entities are more, the benefit of tolerance range of +5% as per proviso to Sec. 92C(2) would be considered. The corresponding grounds stands allowed. All the other connected grounds have been rendered infructuous. Interest on overdue receivables - HELD THAT:- We find that the transaction of overdue receivable would be covered under capital financing as per Explanation as inserted by Finance Act, 2012 to Sec.92B. The same has to be benchmarked separately irrespective of the fact whether any interest has been charged by the assessee from non-AEs or not. The Ld. DRP has already noted that substantial receivables have been outstanding during this year. Accordingly, we direct Ld. TPO to consider ALP rate of LIBOR+3% for delayed remittance beyond allowable credit period. The assessee is directed to provide the requisite information and computation. The ground stand partly allowed.
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