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2023 (6) TMI 607 - AT - Income TaxTP Adjustment - Comparable selection - Larsen and Toubro Infotech Ltd., (ii) Mindtree Limited, (iii) Persistent Systems Ltd., and (iv) Infosys Limited - HELD THAT:- In the present case, the functional profile, assets, risks and activities of the assessee company are admittedly similar to the previous assessment years. Following the earlier years orders in the assessee’s own case and the order of the Tribunal in the case of Yahoo Software development India P. Ltd.[2022 (7) TMI 1349 - ITAT BANGALORE] we direct exclusion of the above four companies from the final list of comparables. Tata Elxsi Ltd. - This company is not comparable with pure SWD services provider like the assessee this Assessment Year also. Therefore the same is directed to be excluded from the comparables. Cygnet Infotech - This company is not functionally comparable with the assessee as the functional profile of this company is dissimilar with the assessee company and excluded from the comparables. Infobeans Technologies Ltd - As relying on case of Radisys India Ltd. [2023 (3) TMI 598 - ITAT BANGALORE] we direct exclusion of this company on functional dissimilarity. Nihilent Ltd - Respectfully following the decisions of the Tribunal in assessee’s own case for earlier AYs and in the case of Subex Ltd. [2023 (4) TMI 224 - ITAT BANGALORE] this company is excluded based on functional dissimilarity. Consilient Technologies (P) Ltd. - As it is appropriate to remit this issue to the file of AO/TPO to consider it afresh in the light of submissions made by the Ld. A.R. with regard to functionality of the comparable. Threesixty Logica Testing Services (P) Ltd - Tribunal in the case of Triology EBusiness Software India (P) Ltd. [2013 (1) TMI 672 - ITAT BANGALORE] and Lionbridge Technologies (P) Ltd., [2019 (8) TMI 1868 - ITAT MUMBAI] had clearly brought out the distinction between the company which is engaged in the business of providing software testing services and a company which is engaged in software development. As clearly held that a software development company cannot be compared with a software testing services - we restore the issue of exclusion of Threesixty Logica Testing Services (P) Ltd., to the files of the AO/TPO to consider whether the said company can be compared with that of the assessee company. Cybage Software (P) Ltd. - The functional profile of this company remains the same for both the Assessment Years. Therefore, respectfully following the above decision of the Tribunal in assessee’s own case for earlier AYs, this company is held to be functional dissimilar and excluded from the comparables. Disallowance u/s 40(a)(i) - TDS u/s 195 or 192 - assessee had seconded employees from its AE - HELD THAT:- We restore the matter to the files of the AO. The AO is directed to consider the issue afresh by taking into account the principles laid down by the Hon’ble jurisdictional High Court in the case of Flipkart Internet Pvt. Ltd [2022 (6) TMI 1251 - KARNATAKA HIGH COURT]. AO is directed to examine whether the assessee has deducted tax at source under section 192 of the Act with respect the salary paid to the seconded employees in its entirety. If assessee is able to prove that it had deducted tax at source with regard to the salary payment of the seconded employees in its entirety, the AO shall not make any disallowance under section 40(a)(i) of the Act for non-deduction of tax under section 195.
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