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M/s. Support. com India Pvt. Ltd. Versus Joint Commissioner of Income-tax (OSD) , Circle 12 (3) , Bangalore.

2015 (11) TMI 1136 - ITAT BANGALORE

Computing deduction u/s 10A - exclusion of tele-communication charges and insurance expenditure incurred in foreign currency from the export turnover as well as the total turnover as directed by the CIT(A) - Held that:- This issue is now covered by the decision in the case of ACIT vs. Tata Elxsi [ 2011 (8) TMI 782 - KARNATAKA HIGH COURT] wherein held there should be uniformity in the ingredients of both the numerator and the denominator of the formula, Section 10-A is a beneficial section. It is .....

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t turn over / (Export turnover + domestic turn over) Total Turn Over

Transfer pricing adjustment - assessee has raised objections against inclusion of 4 companies viz., Infosys Ltd., Persistent Systems Ltd., Tata Elxsi and Wipro Ltd. - Held that:- Infosys Technologies Ltd. is not functionally comparable with the assessee because it owns significant intangibles as well as brands earning revenue from software products apart from software development services. Since no separate segment o .....

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DPLM Software Solution Ltd. v DCIT [2014 (12) TMI 612 - ITAT BANGALORE] as it is engaged in product development and product design services while the assessee is a software development services provide. Also the segmental details are not given separately.

Tata Elxsi Ltd company is predominantly engaged in product designing services and not purely software development services. The details in the Annual Report show that the segment “software development services” relates to design ser .....

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flaw in the comparability analysis carried out by the TPO is that he adopted comparison of the consolidated financial statements of Wipro with the stand alone financials of the assessee; which is not an appropriate comparison. Also this company owns intellectual property in the form of registered patents and several pending applications for grant of patents a company owning intangibles cannot be compared to a low risk captive service provider who does not own any such intangible and hence does n .....

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Act. However, the CIT(A) included the same in the list of comparables while passing the impugned order without giving any opportunity of being heard to the AO/TPO. Since comparability of this company has not been examined at the level of the TPO/AO, therefore, without going into merits of the issue of comparability, we set aside the issue of comparability of this company to the record of the AO/TPO for considering the functional and other criteria of comparability for including the said company .....

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rely or mainly a software service provider, hence functionally dissimilar. - IT(TP)A No.240/Bang/2013, IT(TP)A No.293/Bang/2013 - Dated:- 8-10-2015 - SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER and SHRI VIJAY PAL RAO, JUDICIAL MEMBER For The Assessee : Shri Padamchand Khincha, CA. For The Revenue : Shri Sunil Kumar Agarwal, JCIT(DR). ORDER Per VIJAY PAL RAO, JM: These cross appeals are directed against the order dated 27/12/2012 of the CIT(A)-IV, Bangalore, for the assessment year 2008-09. 2. First .....

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both from the export turnover as well as total turnover for the purpose of computation of deduction u/s 10A without appreciating the fact that the statute allows exclusion of such of expenditure only from export turnover by way of specific definition of export turnover as envisaged by subclause (4) of Explanation 2 below sub-section (8) of section 10A and the total turnover has not been defined in this section. 3) On the facts and in the circumstances of the case the learned CIT(A) erred in hold .....

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ld be considered as a comparable in the case of the assessee since the assessee itself had not selected the said company as an uncontrolled comparable. 5) On the facts and in the circumstances of the case the learned CIT(A) has erred in holding that M/s Avani Cimcon Technologies Ltd. cannot be taken as a comparable. 6) On the facts and in the circumstances of the case the learned CIT(A) has erred in excluding M/s Celestial Biolabs Ltd. from the final set of comparables. 7) On the facts and in th .....

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nd does not require any specific adjudication. 4. Ground No.2 regarding exclusion of tele-communication charges and insurance expenditure incurred in foreign currency from the export turnover as well as the total turnover as directed by the CIT(A). 4.1 We have heard the learned DR as well as the learned authorised representative of the assessee and considered the relevant material on record. The AO, while computing deduction u/s 10A of the Income-tax Act, 1961, [ the Act for short], excluded tel .....

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hould be uniformity in the ingredients of both the numerator and she denominator of the formula, since otherwise it would produce anomalies or absurd results. Sec. 10A is a beneficial section. It is intended to provide incentives to promote exports. The incentive is to exempt profits relatable to exports. In the case of combined business of an assessee, having export business and domestic business, the legislature intended to have a formula to ascertain the profits from export business by apport .....

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port turnover and domestic turnover. The export turnover would be a component, or part of a denominator, the other component being the domestic turnover. In other words, to the extent of export turnover, there would be a commonality between the numerator and the denominator of the formula. In view of the commonality, the understanding should also be the same. In other words, if the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excl .....

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en a particular word is not defined by the legislature and an ordinary meaning is to be attributed to the same, the said ordinary meaning to be attributed to such word is to be in conformity with the context in which it is used. When the statute prescribes a formula and in the said formula, export turnover is defined, and when the total turnover includes export turnover, the very same meaning given to the export turnover by the legislature is to be adopted while understanding the meaning of the .....

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r includes export turnover, the meaning assigned by the legislature to the export turnover is to be respected and given effect to, while interpreting the total turnover which is inclusive of the export turnover. Therefore, the formula for computation of the deduction under s. 10A, would be as under : Profits of the business of the undertaking x Export turnover (Export turnover + domestic turnover) total turnover 11. In that view of the matter, we do not see any error committed by the Tribunal in .....

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) on this issue. 5. Ground No.3 is regarding exclusion of comparables viz., M/s Flextronics, M/s iGate Global Solutions Ltd., M/s Infosys Technologies, M/s Mindtree Ltd, M/s.Persistent Systems Ltd., M/s Sasken Technologies Ltd., M/s Tata Elxsi and M/s Wipro Ltd., from the set of comparables selected by the Transfer Pricing Officer (TPO). The revenue has challenged the impugned order of the CIT(A) excluding these companies from the list of comparables by applying turnover filter. It is pertinent .....

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Systems Ltd. Tata Elxsi Ltd and Wipro Ltd are to be excluded from the list of comparables on the ground of being functionally different apart from failing the upper turnover filter of ₹ 200 crores. Brief facts relating to the ground of the revenue and the additional ground of the assessee are that the assessee is a private limited company incorporated on 14th August, 2003 under the provisions of the Companies Act. The assessee is an 100% EOU registered as STPI. The assessee is a wholly own .....

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: As far as the marketing support services to its AE are concerned, the TPO accepted the said international transaction at arms length. The international transaction in respect of SDS has been bench marked by the assessee by adopting TNMM as the most appropriate method (MAP) in respect of 12 comparables selected by the assessee and arrived at average profit margin of 14.23% on the cost OP/TC as PLI. Hence, the assessee claimed that the margin earned by the assessee at 11.99% on operating cost wa .....

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d raised the objection in respect of comparable companies selected by the TPO. The objections raised by the assessee were based on the ground that these companies are having very high turnover in comparison to the turnover of the assessee and therefore, are not good comparables for determining the arms length price in respect of international transaction of the assessee. The CIT(A) accepted the objections raised by the assessee and directed the AO/TPO to exclude 9 companies from the list of comp .....

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to 7 which we will deal in the later part of this order. Thus, after exclusion of the 12 comparables and inclusion of a new company in the list of comparables by the CIT(A), the remaining set of comparables with operating margin(OM) are as under: 7. Since the assessee has filed an additional ground and raised a common issue as raised by the revenue in ground No.3 therefore, in the facts and circumstances, we admit the additional ground raised by the assessee for adjudication of the same on merit .....

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various decisions of this Tribunal on this issue raised by the assessee in the additional ground, we find that the additional ground of the assessee does not require any examination or verification of the fresh facts and can be adjudicated on the facts already available on record. Thus, the additional ground of the assessee as well as the ground No.3 of the revenue s appeal are disposed of as under. 8. The assessee has raised objections against inclusion of 4 companies viz., Infosys Ltd., Persis .....

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of turnover. In view of the above facts, we will consider the comparability of 4 companies as raised by the assessee in the additional ground which are also common in ground No.3 of the revenue s appeal. I. Infosys Technologies Ltd.: We have heard the learned DR as well as the learned authorised representative of the assessee and considered the relevant material on record. The learned authorised representative of the assessee has relied upon various decisions of this Tribunal in support of the c .....

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5. M/s. Supportsoft India Pvt Ltd. V ITO - IT(TP)A No. 20/Bang/2012 AY: 2005-06 6. M/s. AMD India Pvt Ltd. V ITO - IT(TP)A No. 437/Bang/2013 AY:2008-09 7. Kodiak Networks(India) Pvt. Ltd v DCIT IT(TP) No. 1540/Bang/2012 AY: 2008-09 (i) At the outset, we note that the comparability of this company has been examined and decided by the co-ordinate bench of this Tribunal in the case of M/s. 3DPLM Software Solutions Ltd. in IT(TP)A No.1303/Bang/2012 dated 28/11/2013 in para.11.1 to 11.4 as under: 11. .....

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to the assessee in the case on hand. The learned Authorised Representative drew our attention to various parts of the Annual Report of this company to submit that this company commands substantial brand value, owns intellectual property rights and is a market leader in software development activities, whereas the assessee is merely a software service provider operating its business in India and does not possess either any brand value or own any intangible or intellectual property rights (IPRs). .....

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ence Infosys Technologies Ltd. cannot be comparable to the assessee ; (ii) the observation of the ITAT, Delhi Bench in the case of Agnity India Technologies Pvt. Ltd. in ITA No.3856 (Del)/2010 at para 5.2 thereof, that Infosys Technologies Ltd. being a giant company and market leader assuming all risks leading to higher profits cannot be considered as comparable to captive service providers assuming limited risk ; (iii) the company has generated several inventions and filed for many patents in I .....

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d., be excluded form the list of comparable companies. 11.3 Per contra, opposing the contentions of the assessee, the learned Departmental Representative submitted that comparability cannot be decided merely on the basis of scale of operations and the brand attributable profit margins of this company have not been extraordinary. In view of this, the learned Departmental Representative supported the decision of the TPO to include this company in the list of comparable companies. 11.4 We have hear .....

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Infosys Technologies Ltd is not functionally comparable since it owns significant intangible and has huge revenues from software products. It is also seen that the break up of revenue from software services and software products is not available. In this view of the matter, we hold that this company ought to be omitted from the set of comparable companies. It is ordered accordingly. As it is clear from the finding of the Tribunal that the comparability of this company has been examined in a seri .....

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s significant intangibles as well as brands earning revenue from software products apart from software development services. Since no separate segment of SDS and software products is available, therefore, this company cannot be considered as a good comparable for the purpose of ALP in respect of international transaction of rendering SDS. Accordingly, when this company is functionally not comparable with the assessee, we decline to interfere with the impugned order of the CIT(A). (ii) As regards .....

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n the additional ground only to functional dissimilarity and non comparability of certain companies, therefore, we do not propose to go into the issue of high turnover in rejecting the comparable. II. Persistent Systems Ltd. We have heard the learned DR as well as the learned authorised representative of the assessee and considered the relevant material on record. The comparability of this company has been examined and decoded by the co-ordinate bench of this Tribunal in the case of M/s. 3DPLM S .....

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is mainly a software development company and as per the details furnished in reply to the notice under section 133(6) of the Act, software development constitutes 96% of its revenues. In this view of the matter, the Assessing Officer included this company i.e. Persistent Systems Ltd., in the list of comparables as it qualified the functionality criterion. 17.1.2 Before us, the assessee objected to the inclusion of this company as a comparable submitting that this company is functionally differe .....

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Software Product Development Services for independent software vendors and enterprises. (iii) Website extracts indicate that this company is in the business of product design services. (iv) The ITAT, Mumbai Bench in the case of Telecordia Technologies India Pvt. Ltd. (supra) while discussing the comparability of another company, namely Lucid Software Ltd. had rendered a finding that in the absence of segmental information, a company be taken into account for comparability analysis. This princip .....

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he rival submissions and perused and carefully considered the material on record. It is seen from the details on record that this company i.e. Persistent Systems Ltd., is engaged in product development and product design services while the assessee is a software development services provider. We find that, as submitted by the assessee, the segmental details are not given separately. Therefore, following the principle enunciated in the decision of the Mumbai Tribunal in the case of Telecordia Tec .....

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exclude this company from the list of comparables. Accordingly, we are not inclined to interfere with the order of the CIT(A) in respect of this company. III. Tata Elxsi Ltd.: We have heard the learned DR as well as the learned authorised representative of the assessee and considered the relevant material on record. The comparability of this company has been examined and decided by the co-ordinate bench of this Tribunal in the case of M/s. 3DPLM Software Solutions Ltd (supra) in paras.13 to 13. .....

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onally comparable to the assessee as it performs a variety of functions under software development and services segment namely - a) product design, (b) innovation design engineering and (c) visual computing labs as is reflected in the annual report of the company. The learned Authorised Representative submitted that, (i) The co-ordinate bench of the Mumbai Tribunal in the case of TelecordiaTechnologies Pvt. Ltd. (supra) has held that Tata Elxsi Ltd. is not a functionally comparable for a softwar .....

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the segment software development services relates to design services and are not to software services provided by the assessee. (iv) Tata Elxsi Ltd. invests substantial funds in research and development activities which has resulted in the Embedded Product Design Services Segment of the company to create a portfolio of reusable software components, ready to deploy frameworks, licensable IPs and products. The learned Authorised Representative pleads that in view of the above reasons, Tata Elxsi .....

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ware development services. The details in the Annual Report show that the segment software development services relates to design services and are not similar to software development services performed by the assessee. 13.4.2 The Hon ble Mumbai Tribunal in the case of Telecordia Technologies India Pvt. Ltd. V ACIT (ITA No.7821/Mum/2011) has held that Tata Elxsi Ltd. is not a software development service provider and therefore it is not functionally comparable. In this context the relevant portio .....

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to consider it as a comparable party for comparing the profit ratio from product and services. Thus, on these facts, we are unable to treat this company as fit for comparability analysis for determining the arm s length price for the assessee, hence, should be excluded from the list of comparable portion. As can be seen from the extracts of the Annual Report of this company produced before us, the facts pertaining to Tata Elxsi have not changed from Assessment Year 2007-08 to Assessment Year 200 .....

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y. IV. Wipro Ltd.: We have heard the learned DR as well as the learned authorised representative of the assessee and considered the relevant material on record. The comparability of this company has been examined and decoded by the co-ordinate bench of this Tribunal in the case of M/s. 3DPLM Software Solutions Ltd (supra) in paras.12 to 12.5 as under: 12.1 This company was selected as a comparable by the TPO. Before the TPO, the assessee had objected to the inclusion of this company in the list .....

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ogy related intangibles, owns IPRs and has been granted 40 registered patents and has 62 pending applications and its Annual Report confirms that it owns patents and intangibles. (ii) the ITAT, Delhi observation in the case of Agnity India Technologies Pvt. Ltd. in ITA No.3856(Del)/2010 at para 5.2 thereof, that Infosys Technologies Ltd. being a giant company and a market leader assuming all risks leading to higher profits, cannot be considered as comparable to captive service providers assuming .....

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of products and software services. (vi) the TPO has adopted consolidated financial statements for comparability purposes and for computing the margins, which is in contradiction to the TPO s own filter of rejecting companies with consolidated financial statements. 12.3 Per contra, the learned Departmental Representative supported the action of the TPO in including this company in the list of comparables. 12.4.1 We have heard both parties and carefully perused and considered the material on reco .....

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ed by him. Another major flaw in the comparability analysis carried out by the TPO is that he adopted comparison of the consolidated financial statements of Wipro with the stand alone financials of the assessee; which is not an appropriate comparison. 12.4.2 We also find that this company owns intellectual property in the form of registered patents and several pending applications for grant of patents. In this regard, the coordinate bench of this Tribunal in the case of 24/7 Customer.Com Pvt. Lt .....

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re, direct the Assessing Officer/TPO to omit this company from the set of comparable companies in the case on hand for the year under consideration. We find that a similar view has been taken by the Tribunal in the other decisions as relied on by the assessee. Following the earlier decision of this Tribunal, we direct the AO/TPO to exclude this company from the list of comparables. Accordingly, we decline to interfere with the order of the CIT(A) in respect of this company. 9. In view of the abo .....

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e have heard the learned DR as well as the learned authorised representative of the assessee and considered the relevant material on record. At the outset, we note that this company was neither selected by the assessee in the TP analysis nor by the TPO while passing the TP order under section 92CA of the Act. However, the CIT(A) included the same in the list of comparables while passing the impugned order without giving any opportunity of being heard to the AO/TPO. Since comparability of this co .....

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ial details and data in the public domain. It appears that during the appellate proceedings, the financial data were produced by obtaining directly from the company and therefore, these details including the functional comparability of the company are required to be examined. The ground No.4 of the revenue is allowed for statistical purposes. II. Avani Cincom Technologies Ltd. We have heard the learned DR as well as the learned authorised representative of the assessee and considered the relevan .....

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ee offers software development services to its AEs. The TPO had rejected the objections of the assessee on the ground that this comparable company has categorized itself as a pure software developer, just like the assessee, and hence selected this company as a comparable. For this purpose, the TPO had relied on information submitted by this company in response to enquiries carried out under section 133(6) of the Act for collecting information about the company directly. 7.2 Before us, the learne .....

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on the basis of which the TPO included this company in the final list of comparable companies, has not been shared with the assessee. In support of this contention, the learned Authorised Representative placed reliance on the following judicial decisions : i) Trilogy E-Business Software India Pvt. Ltd. V DCIT (ITA No.1054/Bang/2011) ii) Telecordia Technologies India Pvt Ltd V ACIT (ITA No.7821/Mum/2011) It was also submitted that this company has been held to be functionally not comparable to th .....

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es that it is primarily engaged in development of software products. The extract mentions that this company offers customised solutions and services in different areas; (ii) The Website of this company evidences that this company develops and sells customizable software solutions like DX Change, CARMA, etc. 7.4 The learned Authorised Representative submitted that a coordinate bench of the Tribunal in its order in Curram Software International Pvt. Ltd., in its order in ITA No.1280/Bang/2012 dt.3 .....

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doubt this company has been deleted as a comparable in the case of Triology EBusiness Software India Pvt. Ltd. (supra) and this can be a good guidance to decide on the comparability in the case on hand also. This alone, however, will not suffice for the following reasons :- (i) The assessee needs to demonstrate that the FAR analysis and other relevant facts of the Triology case are equally applicable to the facts of the assessee s case also. Unless the facts and the FAR analysis of Triology cas .....

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5.3 It is a well settled principle that the assessee is required to perform FAR analysis for each year and it is quite possible that the FAR analysis can be different for each of the years. That being so, the principle applicable to one particular year cannot be extrapolated automatically and made applicable to subsequent years. To do that, it is necessary to first establish that the facts and attendant factors have remained the same so that the factors of comparability are the same. Viewed in t .....

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ration is similar to that of the earlier Assessment Year 2007-08. In view of facts as discussed above, we deem it fit to remand the matter back to the file of the Assessing Officer / TPO to examine the comparability of this company afresh by considering the above observations. The TPO is directed to make available to the assessee information obtained under section 133(6) of the Act and to afford the assessee adequate opportunity of being heard and to make its submissions in the matter, which sha .....

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rised Representative took us through the relevant portions of the TP order under section 92CA of the Act and the show cause notices for both the earlier year i.e. Assessment Year 2007-08 and for this year and contended that the selection of this company as a comparable violates the principle enunciated in Curram Software International Pvt. Ltd. (supra) that a company can be selected as a comparable only on the basis of FAR analysis conducted for that year and therefore pleaded for its exclusion. .....

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tmental Representative supported the order of the TPO / DRP for inclusion of this company Avani Cincom Technologies Ltd. in the final set of comparables. 7.6.1 We have heard both parties and perused and carefully considered the material on record. It is seen from the record that the TPO has included this company in the final set of comparables only on the basis of information obtained under section 133(6) of the Act. In these circumstances, it was the duty of the TPO to have necessarily furnishe .....

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the ground that this company was selected in the earlier year. Even in the earlier year, it is seen that this company was not selected on the basis on any search process carried out by the TPO but only on the basis of information collected under section 133(6) of the Act. Apart from placing reliance on the judicial decision cited above, including the assessee s own case for Assessment Year 2007-08, the assessee has brought on record evidence that this company is functionally dis-similar and diff .....

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ITA No.845/Bang/2011 dt.22.2.2013, and in the case of Triology EBusiness Software India Pvt. Ltd. (ITA No.1054/Bang/2011), we direct the A.O./TPO to omit this company from the list of comparables. A similar view has been taken by the Tribunal in other decisions relied upon by the assessee. Following the orders of this Tribunal, we hold that this company cannot be considered as functionally comparable with the assessee. Accordingly, we do not find any error or illegality in the order of the CIT(A .....

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y the TPO for inclusion in the final list of comparables. Before the TPO, the assessee had objected to the inclusion of this company in the list of comparables for the reasons that it is functionally different form the assessee and that it fails the employee cost filter. The TPO, however, brushed aside the objections raised by the assessee by stating that the objections of functional dissimilarity has been dealt with in detail in the T.P. order for Assessment Year 2007-08. As regards the objecti .....

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the field of bio-technology, pharmaceuticals, etc. and therefore is not functionally comparable to the assessee; (ii) This company has been held to be functionally incomparable to software service providers by the decision of the co-ordinate bench of this Tribunal in the assessee s own case for Assessment Year 2007-08 (supra); (iii) The co-ordinate bench of this Tribunal in its order in the case of Triology E-Business Software India Pvt. Ltd. (supra) at para 43 thereof had observed about this c .....

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egard. (iv) The rejection / exclusion of this company as a comparable for Assessment Year 2007-08 for software service providers has been upheld by the co-ordinate benches of this Tribunal in the cases of LG Soft India Pvt. Ltd. in ITA No.112/Bang/2011, CSR India Pvt. Ltd. in IT(TP)A No.1119/Bang/2011 and by the ITAT, Delhi Bench in the case of Transwitch India Pvt. Ltd. in ITA No.6083/Del/2010. (v) The facts pertaining to this company has not changed from Assessment Year 2007-08 to Assessment Y .....

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y the assessee are for Assessment Year 2007-08 and therefore there cannot be an assumption that it would continue to be applicable for the period under consideration i.e. Assessment Year 2008-09. 9.4.1 We have heard both the parties and perused and carefully considered the material on record. While it is true that the decisions cited and relied on by the assessee were with respect to the immediately previous assessment year, and there cannot be an assumption that it would continue to be applicab .....

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arables is defective and suffers from serious infirmity. 9.4.2 Apart from relying on the afore cited judicial decisions in the matter (supra), the assessee has brought on record substantial factual evidence to establish that this company is functionally dis-similar and different from the assessee in the case on hand and is therefore not comparable and also that the findings rendered in the cited decisions for the earlier years i.e. Assessment Year 2007-08 is applicable for this year also. We agr .....

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e, following the decision of the co-ordinate benches of the Tribunal in the assessee s own case for Assessment Year 2007-08 in ITA No.845/Bang/2011 and Triology E-Business Software India Pvt. Ltd. in ITA No.1054/Bang/2011, we hold that this company ought to be omitted form the list of comparables. The A.O./TPO are accordingly directed. A similar view has been taken by the Tribunal in other decisions relied upon by the assessee. Following the orders of this Tribunal, we hold that this company can .....

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bench of this Tribunal in the case of M/s. 3DPLM Software Solutions Ltd (supra) in paras.10 to 10.4 as under: 10.1 This is a comparable selected by the TPO. Before the TPO, the assessee had objected to the inclusion of this company in the set of comparables on grounds of functional differences and that the segmental details have not been provided in the Annual Report of the company with respect to software services revenue and software products revenue. The TPO, however, rejected the objections .....

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ollowing reasons :- (i) This company is functionally different from the software activity of the assessee as it is into software products. (ii) This company has been held to be functionally not comparable to software service providers for Assessment Year 2007-08 by the co-ordinate bench of this Tribunal in the assessee s own case. This company has been held to be different from a software development company in the decision of the Tribunal in the case of Bindview India Pvt. Ltd. V DCIT in ITA No .....

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herefore this company cannot be considered for the purpose of comparability in the case on hand and hence ought to be excluded from the list of comparables. In support of this contention, the learned Authorised Representative drew our attention to various parts of the Annual Report of this company. (v) This company is engaged not only in the development of software products but also in the provision of training services as can be seen from the website and the Annual Report of the company for the .....

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therefore there cannot be an assumption that it would continue to be applicable to the year under consideration i.e. A.Y. 2008-09. To this, the counter argument of the learned Authorised Representative is that the functional profile of this company continues to remain the same for the year under consideration also and the same is evident from the details culled out from the Annual Report and quoted above (supra). 10.4 We have heard both parties and perused and carefully considered the material .....

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Year 2007-08 (supra) and in the case of Triology E-Business Software India Pvt. Ltd. (supra) have held that this company was developing software products and was not purely or mainly a software service provider. Apart from relying of the above cited decisions of co-ordinate benches of the Tribunal (supra), the assessee has also brought on record evidence from various portions of the company s Annual Report to establish that this company is functionally dis-similar and different form the assessee .....

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sions relied upon by the assessee. Following the orders of this Tribunal, we hold that this company cannot be considered as functionally comparable with the assessee. Accordingly, we do not find any error or illegality in the order of the CIT(A) and decline to interfere with the order of the CIT(A) qua this issue. 11. In the result, the revenue s appeal is partly allowed. 12. The assessee has raised the following grounds: GROUNDS RELATING TO PROCEDURE 1) The Order of the learned Commissioner of .....

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ansfer Pricing Officer arid the Commissioner of Income Tax (Appeals) - IV erred in: 3) passing the order without demonstrating that the appellant had motive of tax evasion; 4) not appreciating that the charging or computation provisions relating to income under the head Profits & Gains of Business or Profession do not refer to or include the amounts computed under Chapter X and therefore addition made under Chapter X is bad in law; 5) adopting a flawed process for issuing notices u/s 133(6) .....

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omparable companies which was not available at the time when the appellant undertook its transfer pricing documentation and reporting obligations; 8) adopting companies as comparables even though they are not comparable to the appellant; 9) rejecting comparables proposed by the appellant on unjustified grounds; 10) not appreciating that the law does not compel adopting many (or any minimum) companies as comparables and that the appellant could justify the price paid/charged on the basis of any o .....

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