Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 646 - ITAT MUMBAITP Adjustment - Comparable selection - comparable selection - HELD THAT:- Asit C.Mehta Financial Services Ltd. (earlier known as Nucleus Netsoft & GIS India Ltd. - This entity was functionally not comparable to the assessee since it was engaged in providing software development services as evident from its Annual Report. Segmental results of the entity are not available and therefore, it could not be treated as a comparable entity - Cases followed TNS INDIA (P.) LTD. [2014 (10) TMI 504 - ITAT HYDERABAD and HSBC ELECTRONIC DATA PROCESSING (I) (P.) LTD. [2013 (9) TMI 444 - ITAT HYDERABAD]. Goldstone Infratech Ltd. (earlier Goldstone Teleservices Ltd.) - on similar factual matrix, in HSBC Electronic Data Processing India Ltd. V/s CIT [2013 (9) TMI 444 - ITAT HYDERABAD] directed for exclusion of this entity on the ground that foreign exchange revenue were less than 1% of total turnover of the entity and the revenue from BPO was falling over a period of three years. The other decisions as placed on record, also support the exclusion of this entity. Respectfully following the same, we direct for exclusion of this company Maple eSolutions Ltd. - Reliance has been placed on the decision of HSBC Electronic Data Processing India Ltd. V/s CIT [supra] for the submissions that this entity was engaged in providing call center services for which FAR analysis would be quite different in contrast to the entities engaged in providing BPO services. It has further been submitted that this entity has significant intangible assets of more than 21% of total fixed assets which would make this entity non-comparable. Vishal Information Technologies Ltd. - We find that Hon’ble Bombay High Court in the case of Pr.CIT V/s PTC Software India Pvt. Ltd. [2018 (4) TMI 1002 - BOMBAY HIGH COURT] has confirmed the stand of the Tribunal in excluding this entity on the ground of non-comparable business model. The other decisions as placed on record also supports the exclusion of this entity. Respectfully following the same, we direct for exclusion of this entity. Adhoc disallowance of 20% of communication expenses - HELD THAT:- Assessee debited an amount of ₹ 18.68 Lacs on account of communication expenses reimbursed to its employees. The Ld. AO proposed disallowance of 40% against the same to account for personal element. The Ld. DRP reduced the same to 20%. It has been admitted position before us that the issue stood squarely covered in assessee’s favor by the decision of this Tribunal in assessee’s own case for AY 2004-05 [2013 (4) TMI 935 - ITAT MUMBAI] . Factual matrix being similar, respectfully following the earlier decision of this Tribunal in assessee’s own case, we delete the adhoc disallowance of 20% as sustained by Ld. DRP and allow this ground of appeal.
|