TMI Blog2016 (8) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... file of the TPO for consideration and decide thereupon if it is functionally comparable to the asessee s case and turnover of that company is commensurated with the assessee company. Turnover of CG-VAK Software Exports Ltd. is around Rs. One crore as against the turnover of the assessee company is ₹ 317 crores. Accordingly, in our opinion, turnover of very small company cannot be compared with the assessee company s turnover. This ground is rejected. Datamatics Financial Services Limited is functionally comparable and if its turnover is commensurating with the assessee company s turnover, it is to be considered as comparable to determine the ALP. Accordingly, this issue is remitted to the TPO for fresh consideration. Fortune Infotech Limited requires to be excluded from the list of comparables as it has developed and owns its unique web based software by which it provides niche services to its customers The Healthcare Business Services Ltd company was not functionally comparable to the assesse s case and this company is in health care outsourcing services and in addition, it also renders software development services and it is the fact that segmental information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble DRP have erred, in law and on facts, by rejecting R Systems Limited as comparable to the Appellant on the ground that the company follows a different accounting year, without appreciating the submissions made by the Appellant that application of a different accounting year filter is inappropriate. 7. The learned AO/TPO and the Hon'ble DRP have erred, in law and on facts, by rejecting CG-VAK Software Exports Limited as comparable to the Appellant on the ground that the company's turnover is less than ₹ 1 crore, without appreciating the submissions made by the Appellant that application of a turnover filter is inappropriate. 8. The learned AO/TPO and the Hon'ble DRP have erred, in law and on facts, by not considering two additional comparable companies namely (1) Migrogenetics Systems Limited (2) Datamatics Financial Services Limited for computation of ALP without appreciating the submissions made by the Appellant that the above companies are functionally comparable to the Appellant and satisfy all the filters adopted by the learned AO/TPO and the Hon'ble DRP. 9. The learned AO/TPO and the Hon'ble DRP, in law and in facts, by dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bles: i) Cosmic Global Limited ii) Fortune Infotech Limited iii) Jeevan Scientific Technology Ltd.(Segmental) iv) e4e Healthcare Business Services Ltd.(formerly known as Nittany outsourcing services private limited) 4. Now, the assessee wants to include or exclude the following comparables: i) R Systems International Ltd., ii) Microgenetics Systems Ltd. According to the ld. AR, R Systems International Ltd.(RSIL) is comparable to the assessee s case. He submitted that TPO as well as DRP accepted that this company has functional comparability to the assessee s case. However, it was excluded by the TPO solely on the reason that its financial year is different without considering that the data for the financial year adopted by the assessee can be easily complied from the audited financial statement of that company. According to him, RSIL is to be considered as comparable to the assessee s case. 5. On the other hand, the ld. DR submitted that RSIL was not considered as comparable by the TPO for the reason that the entity has a different accounting year. It has closed the books of account by 31.12.2009. One of the filters adopted by the TPO is to exclude compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile of the TPO for consideration and decide thereupon if it is functionally comparable to the asessee s case and turnover of that company is commensurated with the assessee company. 10. CG-VAK Software Exports Ltd. : This company was not considered as comparable on the reason that the turnover is less than Rs. One crore and failed to satisfy this filter. 11. We have heard both the parties. Admittedly the turnover of CG-VAK Software Exports Ltd. is around Rs. One crore as against the turnover of the assessee company is ₹ 317 crores. Accordingly, in our opinion, turnover of very small company cannot be compared with the assessee company s turnover. This ground is rejected. 12. Datamatics Financial Services Limited : This comparable was rejected by the assessee, as this was functionally different from the assessee. Before the DRP, the assessee has stated that both are in BPO operations and submitted that it is to be considered as comparable and placed reliance on the order of Tribunal, Mumbai Bench in the cases of Tata Power Solar Systems Ltd. v. DCIT [TS-14-ITAT-2014(Mum)-TP] and Sumit Diamond (India) P Ltd. v. Addl. CIT, wherein it was held that a company wron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard both the sides and perused the material on record. This company was not functionally comparable to the assesse s case and this company is in health care outsourcing services and in addition, it also renders software development services and it is the fact that segmental information was not available. The company was also a 100% EOU, under STPI guidelines. Hence, we are inclined to accept the contention of the ld. AR that this company should be excluded from the comparables. Reliance placed on by the ld. AR also supports our view. Accordingly, we direct the TPO to exclude this company from the comparable companies. 17.1 Further, we make it clear that the ld. AR has not argued any other grounds relating to TP issues before us. Accordingly, all other grounds raised by the assessee in this appeal with reference to TP issue are dismissed as infructuous. 18. Coming to other ground not relating to TP, the contention of the ld. AR is that an alternate claim of the assessee relating to allowability of deduction is to be considered u/s.10A instead of sec.10B of the Act. 19. We have heard both the parties and perused the material on record. The Tribunal is consistently holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer was not that of plant and machinery alone but of sale of the whole business unit of the transferor company which was primarily only to the export of articles or things. Even though the assessee originally claimed relief under section 10B, it was cautious enough to make an alternative plea under section 10A in view of the fact that the assessee's vendor had the benefit under section l0A. It was not denied by the Revenue that the assessee had the whole business transferred to its favour and that the factum of transfer was also intimated to the Software Technology Park of India. Thus, as a software technology park, the assesseewas entitled to place its claim under section l0A. In any event, even assuming for a moment, the assessee had not referred to the section correctly, the fact remained that if the claim could be favourably considered under any of those special deduction provisions and on the conditions specified therein being satisfied, there did not exist any justifiable ground for the Revenue to contend that the assessee shall not be entitled to have the benefit of section 10A. The assessee was entitled to exemption under section 10A. 8. Respectfully following ..... X X X X Extracts X X X X X X X X Extracts X X X X
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