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2015 (4) TMI 590 - AT - Income TaxTransfer pricing adjustment - assessment order passed u/s.143(3) r.w.s 144C(13) the AO made an adjustment in Arm’s length price in pursuance of order u/s 92CA(3) - selection of comparable - Held that:- The business of Cross Domain ranges from high end KPO services, development of product suits and routine low end ITES service as compared to the advisory and support services provided by assessee. Thus, we found it functionally different. Accordingly, we direct the AO/TPO to exclude M/s Cross Domain Solutions Limited from the list of comparables. Genesys International Corporation Ltd. company is not functionally comparable and it has a different employee skill set and also performs R&D services and also owns intangibles. Accordingly, we direct the TPO to exclude Genesys International Corporation Ltd. from the list of comparables. E-Clerx Services Private Limited be also directed to be excluded as this company is engaged in providing data analytics and data process solution to the largest brands in the world. They are recognized experts in financial services, retails and manufacturing. Accentia Technologies Ltd the TPO after collecting information u/s.133(6) of the Act had included it as a comparable. The plea of the ld. AR is that it has software development activity also, therefore, non comparable with the functional activity of the assessee. In the interest of justice, we restore this matter back to the file of the TPO for examining afresh. The information collected by him u/s.133(5) is to be supplied to assessee. Mold Tek Technologies Ltd. be rejected on the plea that the Financial Year 2007-028 relevant Assessment Year 2008-09 was a unique year for Mold Tek Technologies Ltd. as the scheme of arrangement involving amalgamation between Tekmen Tool Pvt. Ltd. and Mold. Tek Technologies Ltd. and de-merger between Mold-Tek Technologies Ltd. simultaneously was sanctioned by the Hon’ble AP High Court by 15th July, 2008 with the appointed date for amalgamation and de-merger being 1st October, 2007 and 1st April, 2007, respectively. Infosys BPO Ltd., being a subsidiary of Infosys, has an element of brand value associated with it. This is also clear from the presence of brand related expenses incurred by this company. Presence of a brand commands premium price and the customers would be willing to pay, for the services/products of the company.Infosys BPO is an established player who is not only a market leader but also a company employing sheer breadth in terms of economies of scale and diversity and geographical dispersion of customers. The presence of the aforesaid factors will take this company out of the list of comparables. Wipro Limited cannot be treated as comparable as it is a giant company having turnover of ₹ 11,57.20 crores and it owns tangibles. Maple e-Solution Ltd., Acropetal Technologies Ltd. & Cosmic Global Ltd. cannot be treated as comparable as found having low employee’s cost to sales as against assessee’s ratio of 48.85% Datamatics Financial Services Ltd. TPO has collected segmental information by issuing notice u/s.133(6). The contention of ld. AR was that the same are not audited. In the interest of justice, we restore this issue back to the file of AO/TPO with a direction to provide the information collected by the TPO u/s.133(6) of the Act to assessee and after calling assessee’s objection decide afresh the inclusion/exclusion of M/s Datamatics Financial Services Ltd. from the list of comparables. - Decided partly in favour of assesse.
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