9911796707
TMI Blog2018 (12) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... een submitted that assessee operates in four segments being; software services segment, back office support services segment, marketing support services segment and maintenance and technical services segment. 2.1 Ld. Counsel submitted that for the year under consideration, assessee filed its return of income on 28/11/2014 declaring total income of Rs. 148,64,57,280/-, under normal provisions of the Act. The book profits u/s 115 JB of the Act was determined at Rs. 141,72,78,834/-. The return of income of assessee was selected for scrutiny and draft assessment order was issued by Ld.AO, wherein an adjustment made by Ld.TPO amounting to Rs. 68,65,52,173/- was proposed in addition to Rs. 23,58,11,169/- on account of difference of income offere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was 'necessary or expedient' to refer the matter to the Ld. ACIT, Transfer Pricing Officer - I(1)(1), New Delhi (hereinafter referred to as "Ld. TPO") for computation of arm's length price ("ALP"). TP adjustment in relation to software services [INR 20,56,61,108] 3. That on the fact of the case and in law, the Ld. AO/TPO/Hon'ble DRP have erred, in making an adjustment of INR 20,55,61,108/- to the total income of the Appellant in respect of international transaction pertaining to provision of software services by the Appellant to its associated enterprise ("AE"). 3.1 That on the fact of the case and in law, the Ld. AO/TPO/Hon'ble DRP has erred by not accepting the economic analysis undertaken by the Appellant in accordance with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resorting to cherry picking of comparable companies. 3.4.1 That on the facts of the case and in law, the Ld. TPO, in particular, erred in selecting Thirdware Solutions Limited without appreciating the fact that DRP directed to include the same only if segmental data is available. However, the Ld. TPO erroneously included it based on geographical segment data available in annual report of the company for FY 2013-14. 3.4.2 That on the facts of the case and in law, the Ld. TPO/Hon'ble DRP, in particular, erred in selecting Infobeans Technologies Limited, Persistent Systems Limited, Larsen & Toubro Infotech Limited, Cigniti Technologies Limited, RS Software (India) Limited and Mindtree Limited as comparable companies without appreciating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited and Maveric Systems Limited as comparable to the Appellant in relation to the international transaction pertaining to provision of software services. 3.5 That on the facts of the case and in law, the Ld. TPO/Hon'ble DRP have erred, in law and on facts and circumstances of the case, by selecting companies which are earning supernormal profits as compared to the Appellant. 3.6 That on the facts of the case and in law, the Ld. TPO/Hon'ble DRP have erred, in law and on facts and circumstances of the case, by treating foreign exchange gain/loss as non-operating items while determining the ALP of the subject international transaction. 3.7 That on the fact of the case and in law, the Ld.TPO/Hon'ble DRP has erred in not allowing a ris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... length price after considering working capital adjusted margins of comparable companies, no separate adjustment can be made for such inter-company receivables. 4.4 That on the facts of the case and in laws, the Ld. TPO/Hon'ble DRP has erred in determining the arm's length interest rate for inter-company receivables at LIBOR plus 400 basis points on an arbitrary basis without any cogent reasons. 4.5 That on the facts of the case and in law, the Ld. TPO/Hon'ble DRP has erred in granting the credit of period of 60 days instead of 90 days having regard to the provisions of Section 92CE of the Act. 4.6 That on the facts of the case and in law, the Ld. TPO/Hon'ble DRP has erred, by not appreciating that Appellant has earned more than arm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re or at the time of hearing of the appeal. The Appellant prays that appropriate relief be granted based on the above grounds of appeal and the facts and circumstances of the case." 6. Before us, Ld. Counsel submitted that, regarding Transfer Pricing adjustment in respect of software development services, if certain comparable companies selected by Ld.TPO/Hon'ble DRP are excluded, adjustment would stand automatically deleted. He submitted that comparables objected by assessee for its inclusion, cannot be considered due to functional dissimilarity. In stay application in Annexure E, Applicant is relying upon certain decisions, wherein comparables disputed by assessee has been rejected by orders of this Tribunal. Ld. Counsel further subm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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