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2021 (3) TMI 311 - ITAT BANGALORETP Adjustment - comparable selection - Exclusion of two comparable companies viz., M/s Infosys BPO Ltd and M/s TCS E-Serve Limited - HELD THAT:- Companies having high brand value cannot be considered as comparable companies can be conveniently applied to the year under consideration also. We have also noticed that M/s Infosys BPO Ltd is being consistently excluded in the assessee’s own case in the earlier years. M/s TCS E-serve Ltd has been excluded, inter alia, for the reason that it is providing KPO services and further it is explicitly stated that it is an integral part of Tata Consultancy Services strategy to build on its “Full Service offerings” that offer global customers an integrated portfolio of services ranting from IT services to BPO services - Assessee herein is undertaking backend processing of accounting and other transactions, back office operations, customer support services to various Associated Enterprises. Hence they are in the nature of BPO services only, while M/s Infosys BPO Ltd and M/s TCS E serve Ltd are providing variety of other services. Besides both the above said companies are supported by their parent companies, having huge brand value. Accordingly, we hold that both the above said companies cannot be considered as comparable companies. Accordingly, we direct the AO/TPO to exclude both M/s Infosys BPO Ltd and M/s TCS E serve Ltd from final list of comparables. Treatment of foreign exchange gain/loss as operating income/expenses or not - HELD THAT:- As relying on M/s Arctern Consulting Pvt Ltd [2019 (10) TMI 1286 - ITAT BANGALORE] has taken the view that the foreign exchange fluctuation gain/loss is operating in nature. Accordingly, following the same, we hold that that foreign exchange fluction gain/loss should be treated as operating profit/loss in nature while computing the profit margin of the assessee as well as of the comparable companies. ALP of the transactions require to be determined afresh in the light of decisions rendered supra. Accordingly, we restore this matter to the file of the AO/TPO.
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