TMI Blog2016 (8) TMI 1424X X X X Extracts X X X X X X X X Extracts X X X X ..... of the DRP in directing the AO/TPO to exclude the companies from the list of comparables considering their advantageous brand value along with high turnover. Accordingly, this ground of appeal of revenue is dismissed. - ITA No. 180/Hyd/2015, ITA No. 326/Hyd/2015 - - - Dated:- 24-8-2016 - SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER For The Revenue by : Shri T. Venkat Reddy For The Assessee by : Shri A.V. Raghuram ORDER PER S. RIFAUR RAHMAN, A.M.: Both these appeals filed by the assessee and revenue are cross appeals directed against the order passed u/s 143(3) r.w.s. 92CA(3) r.w.s.144C(13) of the Income Tax Act, 1961 (in short Act ) dated 30/01/2015 relating to AY 2010-11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver but also from the total turnover for the purpose of computation of deduction i/s 10A of the Act. 4. Aggrieved by the order of the DRP, the revenue is in appeal before us raising the following grounds of appeal: 1. The DRP erred in directing to exclude e-Clerx Services Ltd, TCS Eserve Ltd., and Infosys BPO ltd., as comparable without any basis. 2. The DRP erred in directing to exclude telecommunication charges from both total turnover and export turn over when definition was given only for Export Turn Over but not Total Turn Over which goes to defeat the spirit and intention of the parliament. 5. As regards ground No. 1 regarding exclusion of comparables of three companies, the same are to be decided as under: 5.1 eCle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he DRP held as follows: 11.2 The taxpayer vehemently argued that the four companies should not be included in view of their brand value and high turnover as well as relying on the decision of the ITAT to exclude M/s. Infosys Technologies Ltd also argued that M/s Eclerx is KPO not comparable. The panel feels that only M/s Infosys SPO and TCS E serve Ltd should not be included as comparable in view of their advantageous brand value along with high turnover of 1000 crores and above. Similarly, M/s. Eclerx Services that also to be excluded as it renders high end services and considered as KPO. However, the argument of the taxpayer with regard to the comparable company M/s. TCS Eserve International Ltd. is not acceptable, as the said company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of CIT vs. Gem Plus Jewellery (330 ITR 175) as well as different Benches of Tribunal including ITAT, Chennai Bench (SB) in the case of ITO vs. Sak Soft (313 ITR (AT) 853) wherein it is held that communication charges attributable directly to the export of article or thing outside India has to be excluded both from export turnover as well as total turnover while computing exemption u/s 10A of the Act. In view of the ratio laid down as above, the finding of the DRP on this issue is upheld and ground raised by the Revenue is dismissed. 9. In the result, appeal of the revenue is dismissed. ITA No. 326/Hyd/2015 by assessee 10. The assessee has raised the following grounds of appeal in its appeal: 1. The learned Assessing Officer/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cesses. Moreover, the OP/OC % is abnormally high being 51.51%. The ld. AR relied on the following case laws: 1. Market Tools Research Ltd. Vs. ACIT, 2013 32 Taxmann.com 358 (Hyd.). 2. HCL EAI Services Ltd. Vs. DCIT, [2013] 35 Taxmann.com 146 (Bang.) 3. Witness Systems Software India (P) Ltd. Vs. DCIT, [2013] 34 Taxmann.com 183 (Bang.) 4. Maersk Global Centres (India) (P) Ltd. Vs. ACIT (SB) Mum. ITAT 5. CNO IT Services (India) P. ltd. Vs. DCIT, [2014] 43 Taxmann.com 231 (Hyd.) 6. Cordys R D (India) P. ltd. Vs. DCIT, 43 Taxmann.com 64 (Hyd.) 7. DE Shaw India (Software (P) Ld. Vs. ACIT, [2014] 42 Taxmann.com 74 Hyd. 8. M/s Avineon India P. Ltd. Vs. DCIT, ITA No. 152/Hyd/2015 and others, dated 20/01/2016. 9. C3i Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Ltd., in ITA No. 1743/Hyd/2014 for AY 2010-11 vide order dated 13/11/2015, wherein the Tribunal has held as follows: 11.2.2. We find that the assessee s contentions about the presence of brand value and owning of intangibles is supported by the evidence on record. However, as regards the extraordinary event or exceptional circumstance there is no material placed before us by the Ld. Counsel for the assessee. Therefore, merely because the TPO in another case has held that there is an extraordinary event for which this company has to be excluded from the list of comparables, it cannot be excluded. Such claim has to be supported by evidence on record. As regards the functional dissimilarity and huge turnover and brand value is conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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