TMI Blog2018 (10) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... ity took into account irrelevant considerations or excluded relevant factors in determination of Arm's Length Price and that impacts significantly the same. See THE PR. COMMISSIONER OF INCOME TAX-1 VERSUS BARCLAYS TECHNOLOGY CENTRE INDIA PRIVATE LTD. [2018 (8) TMI 574 - BOMBAY HIGH COURT]. We think that whether one instance or one illustration or one entity is comparable to another in determination of the Arm's Length Price, is essentially a question of fact. There, the relevant factors and tests are applied to the circumstances of the given case. The entity before the Court or Tribunal its business and that of the comparables business activity is, therefore, the crucial issue. We do not see how the Revenue can complain before us when th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two questions, it is fairly conceded that the first question stands answered in favour of the Assessee and against the Revenue by a judgment of the Hon'ble Supreme Court of India rendered on 24th April, 2018 in the case of Commissioner of Income Tax, Central-III v/s HCL Technologies Limited (Civil Appeal Nos.8489-8490 of 2013 and Others). 3. The remaining question and as re-framed pertains to the direction of the Tribunal to the Assessing Officer to rework the Arm's Length Price by excluding the seven comparables, out of the 16 selected by the Transfer Pricing Officer. 4. Before we refer to the facts in connection with this question, we deem it appropriate to bring to the notice of all concerned, the observations of this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that of the comparables business activity is, therefore, the crucial issue. We do not see how the Revenue can complain before us when this Court has been emphasizing throughout such an aspect. 5. In the instant case what the Tribunal has noticed while passing the impugned order is that, there are 16 entities selected as comparables. The Transfer Pricing Officer has analyzed various issues in detail, worked out the operating margins of various selected companies and identified 17 comparables whose arithmetic mean of operating profits to total cost was arrived at 26.59%. After working capital adjustment of 1.94%, the arithmetic mean of the PLI was arrived at 24.65%. On operating cost of ₹ 39.24 Crores, Arm's Length Price of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above referred case of Intoto Software India Pvt Ltd, complete details were not placed on record, therefore, the matter was sent to AO for verification whereas in this case assessee has objected even before the AO/CIT(A), therefore, there is no need to set aside the issue to the file of the AO for examination as was done in the case of Intoto Software (supra). We are, therefore, of the opinion that on the basis of facts placed on record, the case of Exensys Software Solutions Ltd. cannot be taken as comparable. 9. Similarly, the other cases, Bodhtree Consulting Ltd, Four Soft Ltd, Infosys, Sankhya Infotech Ltd, Thirdware Solutions Ltd, Tata Elexi (seg) etc, are also to be excluded as they are considered and analyzed in various cases r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seven entities as comparables, we are not in agreement with Mr. Mohanty that the instant Appeals raise any substantial question of law. This is not a matter where the Revenue can project the questions as re-framed as substantial questions of law. That is referring to a mixed issue of fact and law. After the legal principles are noted, they have to be applied to the facts and circumstances of each case. In the circumstances, the Tribunal's order deleting the comparables as prayed by the Assessee containing reasons, cannot be termed either as perverse or vitiated by any error of law apparent on the face of the record. 9. Once we reach the above conclusion, we are of the opinion that the re-framed Question No.2 is also not a substantia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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