TMI Blog2015 (5) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... ain in as much as the TPO can obtain such information in the form of relevant schedules of the Profit & Loss Account of the said entity as well as the segmental details, if any, directly from the said entity. We therefore, set aside the impugned order of the Assessing Officer as well as the direction given by the DRP on this issue and restore the matter to the file of the Assessing Officer/TPO for deciding the same afresh in the light of the observations already made by us, after giving the assessee proper and sufficient opportunity of being heard - Decided in favour of assesse for statistical purposes. - ITA No. 265/Hyd/2015 - - - Dated:- 29-4-2015 - Shri P. M. Jagtap And Shri Saktijit Dey,JJ. For the Appellant : Shri Ajit Kumar Jain Ms. Radhika Thakkar For the Respondent : Smt. G. Aparna Rao DR ORDER Per P. M. Jagtap, Accountant Member : This appeal filed by the assessee is directed against the order of the Asst Commissioner of Income-tax Circle 17(1) Hyderabad (Assessing Officer) dated 18.2.2015 passed under S.143(3) of the Act read with the directions given by the Dispute Resolution Panel(DRP) under S.144C(5) of the Act. 2. Out of the three gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made by the Assessing Officer to the Transfer Pricing Officer (TPO) under S.92CA(1) of the Act. In the TP Study Report submitted by the assessee, TP analysis was done in respect of each type of transaction separately on the basis of segmental details claimed to be maintained by the assessee. The said analysis was done by applying Transactional Net Margin Method (TNMM) as the most appropriate method by taking Operating Profit to Operating Cost (OP/OC) as Price Level Indicator (PLI). The summary of such analysis made in the TP study Report submitted by the assessee as summarized by the Transfer Pricing Officer in his order was as under- Nature of Transaction Amount MAM PLI Margin of Tax payer Margin of Comparables Provision of Software development services 33,44,53,634 TNMM OP/OC 11.2 12.1 Provision of back office support services 8,94,18,867 TNMM OP/OC 9.09 13.6 Provision of marketing support services 2,03,38,621 TNMM OP/OC 9.09 13.6 Provision of corporate IT support services 38,17,826 TNMM OP/OCV 5.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. E-Zest Solutions Ltd. 22.1 7. Infosys Technology Ltd. 45.44 8. Kals Information Systems Ltd. (Seg.) 22.05 9. Kuliza Tech. 25.92 10. L T Infotech Ltd. 19.97 11. Mindtree Ltd.(Seg.) 20.47 12. Persistent Systems Solutions Ltd.(Merged) 11.37 13. R.S. Software (India) Ltd. 9.88 14. Sasken Communication Technologies ltd. 25.23 15. Tata Elxsi Ltd. (Seg) 17.24 16. Thinksoft Global Services Ltd. 11.22 17. Zylog Systems Ltd. 18.62 18. Persistent Systems ltd. 31.57 Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the TP report submitted by the assessee in respect of each type of transaction separately was rejected by the Transfer Pricing Officer without assigning any reasons, the assessee is not really interested to challenge the action of the TPO on this aspect of the matter. He contended that the limited issue which the assessee wants to raise is about the inclusion of one entity, namely, M/s. E-Infochips Bangalore Ltd. in the list of final comparables. He contended that this entity is not functionally comparable to the assessee company and the relevant data in respect of the said entity not being fully available in the public domain, the same is liable to be excluded from the list of comparables, while working out the Arm s Length Price of the relevant transactions of the assessee company with its AE. In this regard, he invited our attention to the relevant portion of the submissions made before the DRP placed at page Nos.79 to 83 of the appeal memo to point out that elaborate submissions were made by the assessee before the DRP to highlight the difference in functional profile of the said entity as well as nonavailability of relevant data. He contended that the DRP, however, has comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . is not available in the public domain, the learned counsel for the assessee invited our attention to the relevant portion of the annual report of the said entity placed at page 296 of the paper-book. He pointed out that the income earned by the said entity from software services as well as the expenses incurred on software development are given in the Profit Loss Account with a mention that further details of the same are given in Schedule 7 and 8I. He submitted that the information stated to be given in Schedule 7 and 8, however, is not available in the public domain. He submitted that similarly Schedule 9 giving details of administrative and other expenses as mentioned in the Profit Loss Account of M/s. E-Infochips Bangalore Ltd. is not made available in the public domain. He also pointed out from the relevant portion of the Annual Report placed at page 304 of his paper book that the said entity is claimed to be primarily engaged in software development and IT enabled services, but segmental details are stated to be not maintained, as the software development and IT enabled services are considered as one reportable business segment. He also pointed out that the amount of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned counsel for the assessee has heavily relied on the contents of the website www.einfochip.com., the print out of relevant portion of which is placed on record before us. On the basis of the said contents, he has made an attempt to point out that M/s. E-Infochips Bangalore Ltd. is functionally different form the assessee company in as much as the said company is mainly into development of new products whereas the assessee company is mainly providing software development services. After having gone through the website www.einfochip.com., we however find that the same is in respect of the entire group of e-Infochips, of which M/s. E-Infochips Bangalore Ltd. is only a part. The functional profile given on the said website thus is that of the entire group and not just of the M/s. E-Infochips Bangalore Ltd. The content of the said website in our opinion, therefore, cannot be relied upon to ascertain the functional profile of M/s. E-Infochips Bangalore Ltd., especially when the nature of functions/services given there are materially different from the functions/services stated to be rendered by M/s. E-Infochips Bangalore Ltd. in its annual report. Even the details of services ..... X X X X Extracts X X X X X X X X Extracts X X X X
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