Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 1005 - AT - Income TaxTransfer pricing adjustment - determining the arm's length margin/ price using multiple year data - Held that:- Only the contemporaneous year data is to be taken into consideration for the purposes of bench marking purposes as per Rule 10B (4) of the Incometax Rules, 1962 (hereinafter ‘the Rules’). This position is now well settled by the decision of Hon’ble jurisdictional High Court in the case of Chrys Capital Investment Advisors (I) Pvt. Ltd. Vs. DCIT [2015 (4) TMI 949 - DELHI HIGH COURT]. More so, it is admitted by the parties that the current appeal will not fall within the exception provided under the Proviso to Rule 10B (4). International transaction of provision of IT services and ITES SEGMENT - selection of comparable - Held that:- A captive unit of a comparable company which assumed only a limited risk cannot be compared with a giant company in the area of development of software who assumes all types of risks leading to higher profits. The facts of the appellant are akin and the comparative chart of assessee vis –a-vis M/s Infosys clearly depicts the same and therefore, do not warrant any different conclusion. The appellant is also captive service provider to its AE and as such, M/s. Infosys Ltd. is not a valid comparable with the appellant and we direct it’s exclusion from the comparables. M/S. WIPRO TECHNOLOGY SERVICES LIMTIED - We concur with the finding of DRP while repelling the objection regarding extra-ordinary event taking place for this comparable, but for a different reason, i.e. the relevant extra ordinary event took place in the preceding Financial Year i.e. FY 2008-09. However, we concur with the submissions advanced by Ld AR that the Director’s Report and Notes to Account for this comparable are not available in public domain. Ld. DR has not been able to controvert this fact. Since sufficient information for this comparable is not available, we direct exclusion of this company as a comparable. CALIBER POINT BUSINESS SOLUTIONS LTD. & R SYSTEMS INTERNATIONAL LTD. - We direct the TPO to re-examine these comparables by reworking their margins as on 31st March 2010 as aforestated in the order in the case of M/s. Mercer Consulting (India) Pvt. Ltd. [2014 (10) TMI 467 - THE ITAT DELHI] ITES SEGMENT - ACCENTIA TECHNOLOGIES LTD. - In the light of the amalgamation, which is having an impact on the figures disclosed as of 31st March 2010, we find force in the contention of the ld. AR, this company should be excluded from the comparable and we order accordingly. TCS E – SERVE INTERNATIONAL LTD. & TCS E-SERVE LTD. - the principal source of revenue of this comparable is only one i.e. transaction processing and other services of ₹ 1.35 crores credited in the P&L account. The ld. AR has not been able to substantiate that the other services element is having a different nature or class vis-à-vis transaction processing receipt of this comparable. Contrary to this, the audited annual accounts, certify that both, these receipts are rank parri passu and have the same nature and function. Similar is the position with M/s. TCS E-serve International Ltd. so therefore we uphold the inclusion of these two comparables. - Decided in favour of assessee in part.
|