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2023 (6) TMI 874 - AT - Income TaxTP Adjustment - Comparable selection - RPT Filter - HELD THAT:- As in the case of M/s.Toyota Kirloskar Motors Private Limited [2021 (9) TMI 12 - ITAT BANGALORE] has held that the RPT ratio has to be consistently calculated on an aggregate basis taking the ratio of RPT income plus RPT expenses by sales - we direct the AO to calculate RPT ratio on aggregate basis considering the RPT income plus RPT expenses by sales for all the comparable companies. Adoption of 15% RPT filter - HELD THAT:- As tribunal in the case of Barracuda Networks India Pvt Ltd. [2022 (5) TMI 322 - ITAT BANGALORE] wherein it was noted that Karnataka in PCIT v. Yodlee Infotech P. Ltd [2018 (6) TMI 1783 - KARNATAKA HIGH COURT] had upheld the application of 15% RPT filter. Similarly, 15% RPT filter was upheld in the decision cited by the ld. AR in the case of Autodesk India (P) Ltd [2018 (7) TMI 1862 - ITAT BANGALORE]. Exclusion of companies on different parameters - Sagarsoft India Limited - AR submitted that, the company is engaged in the business of software development service segment along with system administration and that this fact has been not considered by the Ld.TPO 0- we remit this issue to the TPO/AO for fresh verification and decision in accordance with law, after providing assessee opportunity of hearing. Evoke Technologies Private Limited - In the absence of the correct reporting of the financial data by the comparable company, even if it satisfies the FAR & filters applied by the TPO, this company cannot be considered as comparable company. Sasken Communication Technologies Limited - DRP in Appellant’s own case for AY 2018-19 has held Sasken to be functionally similar - we remit the issue to the AO/TPO for verification of the facts in AY 2018-19 and present year and for fresh decision in accordance with law. Sankhya Infotech Limited - TPO & DRP held that the company is functionally different as it is engaged in diversified activities and segmental data is not available - AR submitted that the company is functionally similar as it provides solutions and services in relation to software development and it passes all filters applied by the TPO - Considering the arguments from both the sides and findings recorded by the lower authorities, we remit this issue to the AO/TPO for fresh consideration. E-Zest Solutions Limited - In the present case the assessee is engaged in the business of software development services whereas E-Zest Solutions Ltd. is ITeS company. The software development service business company cannot be compared with the ITeS company. We reject the contention of the assessee and uphold the orders of lower authorities. Isummation Technologies Private Limited - We direct the AO/TPO to include this company in the list of comparables. Nitor Infotech Private Limited - During the course of hearing, the ld. AR submitted that the data is available in public domain and it is functionally comparable, but during the course of search process by the ld. TPO, it was not appearing in the search process. Assessee has filed paperbook in which the financial statement of this company is placed - We remit this issue to the AO/TPO for examination whether this company passes the FAR and decide the issue afresh as per law. Incorrect computation of margin of Harbinger Systems Pvt Ltd. - AR submitted that the TPO has taken margin at 11.16% whereas the correct margin of this company comes to 8.12% - We remit this issue to the AO/TPO for verification of the correct margin of Harbinger Systems Pvt Ltd. and accordingly adopt the same for margin computation as per law. Grant of working capital adjustment in the SWD and MSS segments - The coordinate Bench of the Tribunal in the case of Airlinq Technology Pvt. Ltd [2022 (8) TMI 1283 - ITAT BANGALORE] held that in keeping with the OECD guidelines, endeavour should be made to bring in comparable companies for the purpose of broad comparison. Therefore the working capital adjustment as claimed by the Assessee should be allowed.
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