Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (12) TMI 89 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee engaged in the business of rendering contract SWD and ITE services, need to be deselected from final comparable list. RS Software (India) Ltd.,Larsen & Toubro Infotech Ltd.,Nihilent Ltd., Inteq Software Pvt. Ltd., Persistent Systems Ltd.,Infobeans Technologies Ltd.,Thirdware Solution Ltd.,Infosys Ltd.,Aspire Systems (India) Pvt. Ltd. and Cybage Software Pvt. Ltd.be deselected as functionally dissimilar to the assessee. Akshay Software Technologies Ltd. (‘Akshay’) and Sasken Communication Technologies Pvt. Ltd. (‘Sasken’) - As decided in Arm Embedded Technologies Pvt. Ltd. [2023 (1) TMI 399 - ITAT BANGALORE] DRP has not considered the plea of the Assessee in proper perspective. The fact that the TPO rejected the TP study of the Assessee cannot be the basis not to consider the claim of the Assessee for inclusion of comparable companies. TPO excluded these companies only on the ground that information related to these companies was not available in the public domain and this fact was shown to be an incorrect assumption by the Assessee in the submissions before the DRP. In such circumstances, it was incumbent on the part of the DRP to have adjudicated the question of inclusion of these companies as comparable companies. The fact that these companies do not figure in the search matrix of the TPO is not and cannot be a ground not to consider inclusion of these companies as comparable companies. Since the DRP has failed to do so, we are of the view that the issue regarding inclusion of the aforesaid companies as comparable companies should be set aside to AO/TPO for fresh consideration in the light of the information available in public domain. Re- computation of margins of CG-VAK Software & Exports Ltd. and Kals Information Systems Pvt. Ltd. - Findings recorded by the ld. DRP we also giving direction to the AO/TPO for computation of correct margin in the line of the direction given by the Ld. DRP. Accordingly this ground is allowed for statistical purpose. Comparable for ITeS Segment - Tech Mahindra Business Services Ltd., Infosys BPM Ltd., SPI Technologies India Pvt. Ltd., and Eclerx Services Ltd. which ought to be excluded from the final list of comparable as the companies are functionally dissimilar to the Appellant - We find the judicial decisions, applicable for the Assessment Year 2014-15 [2019 (8) TMI 1465 - ITAT HYDERABAD] and based on the observations of the co-ordinate Bench, we consider the company Infosys BPO Limited & E-Clerx Services Ltd. comparable has to be excluded and accordingly direct the TPO to exclude this company form the final list of comparable. SPI Technologies India Pvt. Ltd. be excluded. Tech Mahindra Business Services Ltd. - remitting issue to the file of ld.AO/TPO to consider in the above terms cited in NTT Data Information Processing Services Pvt. Ltd. v. DCIT [2022 (7) TMI 1401 - ITAT BANGALORE] Microgenetic Systems Ltd is engaged in providing ITeS which are in the nature of medical transcription services. The said services would fall under the category of ITeS and, therefore, it is submitted that Microgenetic is comparable to the functional profile of ITeS rendered by the assessee. Ace BPO Services Pvt. Ltd. company is rendering health care, call centre, management service and transcription, which are in the nature of ITeS. Under the healthcare services, the company provides insurance eligibility, demographics, medical coding, charge posting, quality audits, claims transmission, payment posting, accounts receivables analysis, collection follow up and monthly reconciliation statement. Under the call centre services, the company renders insurance coverage verification, benefits verification, insurance follow ups, denials management, credit balance resolution, appointment scheduling etc. Under management services, the company provides collection services, trend analysis and process improvement. All the services rendered by the companies are comparable to the services rendered by the assessee. Further, the company passes all the filters applied by the TPO. Suprawin Technologies Ltd. - company is rendering business process outsourcing services, which are similar to the services rendered by the assessee. Further, the company passes all the filters applied by the TPO. - we remit the comparables back to the Ld.AO/TPO as sought by the assessee for inclusion and fresh consideration in the light of information available in public domain in above terms. Deduction u/s 80G - Assessing Officer did not allow the same while computing the total income without any reason - we direct to the AO for giving deduction after verifying the documents as per law. Accordingly, this ground is allowed for statistical purpose.
|