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2023 (12) TMI 863 - AT - Income TaxTP Adjustment - margin of the Assessee computed in terms of the APA stands at 18% - methodology for preparation of segmental accounts as agreed upon in the APA - HELD THAT:- Considering the submissions and the APA agreement entered into by assessee with the CBDT for the subsequent assessment years, we direct the computation of the margin to be carried out as per the terms agreed in the APA in respect of the services rendered by assessee under ITeS segment. We direct the Ld.AO/TPO to determine the arms length price of the international transaction under the ITeS segment that was the subject matter of order passed u/s. 92CA in accordance with the APA entered into by assessee for subsequent assessment years dated 22.03.2022. Comparable selection - CRA Online Ltd. - The assessee before us is providing assistance to the AE while interacting with the client when the service module is being conceptualized, client interaction in the initial stages of the contract negotiations, client interaction when the service goes live and decisions regarding and in the interaction when the service goes live and decisions regarding general administration, accounting, legal, finance and personnel matters in the US etc. In our considered opinion, this company cannot be held to be a fit comparable with that of assessee. We accordingly, direct the Ld.AO/TPO to exclude this company from the final list. Cosmic Global Ltd.company was not excluded by the Ld.TPO but has been excluded by the DRP suomoto on the ground that it has a different working model. Further it is noted that such kind of filter has never been applied by the Ld.TPO and that the Ld.TPO has held this company to be functionally similar with assessee. Under such circumstances, we do not find any reason for this company to be excluded as the functionality has been not disputed by the revenue. Informed Technologies India Ltd. and Inhouse Production Ltd. - Details based on which these comparables were excluded by the Ld.TPO/DRP are verifiable from the annual reports. We direct the Ld.AO/TPO to verify the details and to consider this comparable as they have not disputed the functional dissimilarities. Disallowance of depreciation claimed on the balance goodwill as made on the basis of case of CIT vs. Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] - HELD THAT:- This Tribunal has the power to direct the Ld.AO to claim verify the assessee. Accordingly, we direct the Ld.AO to consider the claim of assessee in the light of the directions by Hon’ble Supreme Court in case of CIT vs. Smifs Securities Ltd. (supra) and also in accordance with law.
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