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2024 (1) TMI 1030 - ITAT MUMBAITP Adjustment - comparable selection - functional comparisons - HELD THAT:- Domex is not functionally comparable to assessee as is engaged in diversified activities including software development, KPO and BPO services and hence, is directed to be excluded from the list of comparables. MPS - As Acquisition/amalgamation/mergers are extraordinary events in the life circle of company which substantially impact the margins of the acquiring company in the relevant financial years. The Tribunal has been consistently holding that where there is an extraordinary event in a relevant year, the company should not be accepted as comparable. Thus, in the facts of the case, we find merit in argument of the assessee to exclude MPS Ltd. from the list of comparable. We direct accordingly. Vitae company is engaged in providing diversified services cannot be considered as comparable to ITES service provider. Taking into consideration entire facts, we direct the TPO to exclude Vitae from the list of comparables. Access Healthcare company is engaged in providing professional, technical and business services. The nature of services provided by the company falls into the category of KPO. Thus, the services rendered by the company requires higher level of skill and specialized knowledge. The companies rendering KPO services are not comparable to the company providing ITES – BPO services. R. Systems International Ltd. rejected as comparable on the ground of different financial year - It is not the case of Revenue that the company is in any manner functionally different from that of the assessee or the said company does not fall within any of the parameters of filters applied. The Hon’ble Delhi High Court in the case of CIT vs. Mc Kinsey Knowledge Centre India Pvt. Ltd [2015 (3) TMI 1226 - DELHI HIGH COURT] has held that, if from the available data on record the results for financial year can reasonably be extrapolated then the comparable cannot be excluded solely on the ground that the comparables have different financial year endings. Thus, in light of our above observations we hold R-Systems to be a valid and good comparable and direct the A.O to include R-Systems in the list of comparables. Sundaram Business Services excluded on the ground of functional disparity - Once, the company has been accepted as functionally comparable in the preceding and the subsequent assessment years, there can be no plausible reason to reject the same on the ground of functional disparity in the sandwich assessment year. Hence, the said company is directed to be included in the list of comparables.
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