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2023 (6) TMI 506 - ITAT DELHITP Adjustment - comparable selection - functional dissimilarity or extra-ordinary events - Difference in business model - difference between KPO and BPO/ITES - HELD THAT:- Cosmic Global Ltd. is functionally different from that of the assessee as it out-sourced major part of its work and it had an exceptional performance, high turnover, abnormal profit in the relevant assessment year - we affirm the order of the CIT (Appeals) in excluding Cosmic Global Ltd., from the final set of comparables selected by the TPO for the purpose of bench-marking international transactions. Accentia Technologies Ltd - As decided in PTC SOFTWARE (I) PVT. LTD., [2018 (4) TMI 1002 - BOMBAY HIGH COURT] the nature of activities carried out by Accentia Technologies Ltd. are different from that carried by the assessee - Thus functions of the assessee company and the comparable selected by the TPO with that of Accentia Technologies Ltd., are dissimilar and also since during the assessment year 2009-10 there were extra-ordinary events such as merger/amalgamation, this company cannot be considered as comparable. Eclerx Services Ltd. is a KPO providing specialized services whereas the activities of the assessee are in the nature of routine BPO services. Assessee is providing only ITES services and whereas Eclerx Services Ltd. which provides data analytics and data processing solutions to some of the largest brands in the world and is recognized expert in chosen markets financial services, retail and manufacturing is a data analytic KPO service provider specialized in two verticals financial services and retail manufacturing, cannot be considered as a comparable company of that of the assessee and the ld. CIT (Appeals) rightly excluded Eclerx Services Ltd. from the final set of comparables selected by the TPO. Coral Hub (formerly known as Vishal Technologies Ltd.) we notice that this company has out-sourced its BPO activities and in the case of Rampgreen Solutions (P.) Ltd. [2015 (8) TMI 931 - DELHI HIGH COURT] held that a company which out-sourced its activities cannot be held comparable with a company which carries BPO activities as business model of both the companies are different. Thus we hold that the ld. CIT (Appeals) rightly excluded Coral Hub Ltd. from the final set of comparable companies selected by the TP. Benefit of working capital adjustment - ground raised by the assessee before the ld. CIT (Appeals) for not allowing working capital adjustment has been decided as infructuous without considering the submissions of the assessee - HELD THAT:- We restore this ground to the file of the Assessing Officer, who shall consider the claim of the assessee in accordance with law. This ground is allowed for statistical purpose.
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