TMI Blog2016 (8) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirmed M/s ICRA Online Ltd (Seg.) - Exclusion of this company was directed by DRP by applying export revenue filter of 75% and it was submitted by the ld. AR of the assessee before us that he has no objection if this filter of 75% export is not applied. Accordingly, we reverse the order of the DRP regarding exclusion of this company and direct the AO/TPO to include this company i.e. M/s ICRA Online Ltd (Seg.)as a good comparable. M/s Sundaram Business Services Ltd. - Regarding this comparable, we find that this is noted by the DRP on page-24 of its order that only 36.91% of the turnover is from exports and therefore, this company is failing 75% export earning filter since both sides agreed that this filter i.e. 75% export earning filter should not be applied, we reverse the order of DRP on this comparable and hold that this comparable company i.e. M/s Sundaram Business Services Ltd., should be reinstated as a comparable. Accordingly, the appeal of the revenue regarding this segment is partly allowed. M/s Acentia Technologies Ltd exclusion confirmed M/s Microland Ltd - as from the perusal of the annual report of this company i.e. M/s Microland Ltd., it is seen that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that these are qualifying the qualitative and quantitative filters applied by the TPO. 4. On the facts and in the circumstances of the case, the Dispute Resolution Panel erred in directing the TPOI AO to exclude the comparables M/s Tata Elxsi Ltd., without appreciating the fact that the selection of comparables in a case depends on assessee specific FAR analysis and this is functionally comparable company which qualifies all the qualitative and quantitative filters applied by the TPO. 5. On the facts and in the circumstances of the case, the Dispute Resolution Panel erred in directing the TPO/AO to exclude the comparables M/s Eclerx Ltd., without appreciating the fact that the rejection or selection of comparables in a case on the basis of its appropriateness/inappropriateness in some other case is not possible. 6. On the facts and in the circumstances of the case, as per the directions of the Dispute Resolution Panel, whether working capital adjustment can be made on the basis of advance received from AEs in absence of debtors and inventory in the case of assessee for calculating the cost of working capital built in the profit margin. 7. On the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... norable DRP and the learned TPO have erred in law and on facts in undertaking a new search and arriving at a fresh set of comparable companies for benchmarking the transactions. 4. Use of multiple year data The Honorable DRP and learned TPO have erred in law and on facts in rejecting the use of multiple year data, without considering that the past year data had an influence on the determination of arm's length price and that the Appellant had considered contemporaneous data available at the time when it carried out the benchmarking study having regard to the statutory requirement to maintain the Transfer Pricing documentation by the specified date. 5 . Filters and quantitative criteria applied by the Appellant 5.1 Without prejudice to the above, the Honorable DRP and the learned TPO have erred in law in adopting/modifying the additional filters for conducting TP analysis, without appreciating the TP documentation prepared by the Appellant. 5.2. The Honorable DRP, has erred in law and on facts, in upholding the inclusion of additional comparable companies including the following comparable companies selected by the learned TPO without considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned AOITPO to rectify the errors made in computing the working capital adjustment. Corporate tax matters 6.4 The Honorable DRP / learned AO has erred, in law and on facts, in granting credit under section 115JAA of the Act amounting to ₹ 6,023,724 after computing surcharge and education cess on the tax payable. 6.5 The Honorable DRP / learned AO has erred, in law and on facts in not including surcharge and education cess as part of the credit under section 115JAA of the Act. 6.6 The learned AO has erred on facts, in holding that the Appellant was granted a refund of ₹ 2,356,520, whereas the actual refund granted was ₹ 1,663,079. 6.7 The learned AO has erred, in law and on facts, in upholding the levy of interest under section 234B and 234D of the Act. The appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds, at any time before or at the time of hearing of the appeal. Each of the above objections is independent and without prejudice to the other grounds preferred by the appellant. 4. The ld. AR of the assessee submitted a chart in respect of its three segments. In the software development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that this issue is covered in favour of the assessee by the Tribunal order rendered in the case of M/s Novo Nordisk India Pvt. Ltd., in IT(TP)A No.146(Bang)/2015 and he pointed out that para-30 to 33 of the Tribunal order are relevant. 12. He further submitted that the assessee is requesting for inclusion of one comparable i.e. M/s Microland Ltd. and he submitted that this company had profits in the earlier two years and incurred a loss only in the financial year 2009-10 and therefore, this company is not incurring persistent losses and therefore, this should not be excluded. He has drawn our attention to para-983,989 990 of the paper book containing annual report of this company. 13. Regarding the third segment i.e. marketing support services segment, he submitted that out of additional five comparables, the DRP has directed for exclusion of two comparables for which the revenue is in appeal and the issue regarding both these comparables is covered in favour of assessee by the Tribunal order rendered in the case of M/s Electronics for Imaging India (P)Ltd. (Supra). He further submitted that the assessee is seeking exclusion of two comparables i.e. M/s Asian Busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o segment information available for sale of software services and product. In the light of these facts, it was held by DRP that this company should be excluded from the list of final comparables. Under these facts, we find no infirmity in the order of the DRP for directing exclusion of this comparable. Accordingly, appeal of the revenue in respect of this segment i.e. software development segment is dismissed. 19. Now we take up the second segment i.e. ITES segment. In this segment, the TPO has adopted10 comparables out of which DRP has rejected 4 comparables for which the revenue is in appeal before us and the assessee is in appeal for exclusion of one comparable i.e. M/s Acentia Technologies Ltd., and inclusion of one comparable i.e. M/s Microland Ltd., and the assessee has not pressed its ground regarding exclusion of M/s Informed Technologies Ltd., 20. Regarding revenue s appeal for this segment, we find that one comparable M/s Acentia Technologies Ltd.(Seg.) has been rejected by the DRP on this basis that this company fails employees cost filter of 25%. AS per page-21 of its order, the DRP has noted that it is noticed from the P L account of this company that out of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, the appeal of the revenue regarding this segment is partly allowed. 24. Regarding this segment i.e. ITES, the assessee is seeking exclusion of one comparable i.e. M/s Acentia Technologies Ltd., and it has been stated that this issue regarding this company is covered in favour of the assessee by the Tribunal order rendered in the case of M/s Novo Nordisk India Pvt. Ltd., (Supra). Since the ld. DR of the revenue could not point out any difference in facts, by respectfully following this Tribunal order, we hold that this company should be excluded from the list of final comparables. 25. Regarding this segment, the assessee has also raised a ground for exclusion of M/s Informed Technologies Ltd. but in course of hearing before us, it was submitted by the ld. AR of the assessee that this ground is not pressed and accordingly, this ground of the assessee is rejected as not pressed. 26. For this segment, the assessee is seeking exclusion of one comparable i.e. M/s Microland Ltd. and it has been stated before us that the TPO has initially included this company in show cause notice but later, he did not include the same in the list of final comparable and the claim of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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