TMI Blog2019 (1) TMI 1580X X X X Extracts X X X X X X X X Extracts X X X X ..... lude M/s. VJIL as a comparable on the ground that it is not a persistent loss making company, is not shown to be perverse. Thus, no interference is warranted. Thus, the proposed question is not entertained. M/s. FCS Software Solutions Ltd. - Tribunal on examination of facts found that the comparable M/s. FCS Software Solutions Ltd., had income from its software development service (comparable with the activity of the Respondent) to the extent of 99.99% of the total revenue. Thus, on the above facts, the Tribunal came to a finding of fact that M/s. FCS Software Company is a comparable to the Respondent for the purpose of arriving at the ALP on application of the TNM Method of the Respondent's transactions with its AE' - this finding of fact by the Tribunal does not give rise to any substantial question of law M/s. Infosys Technologies Ltd. , cannot be held as a comparable. This on application on functions, assets and risks test. It being a giant company has larger profits and, therefore, is not a comparable with a company which is smaller in size. M/s. Transworld India Ltd. - revenue derived from exports of software was just 2.21% of its total revenue while Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the caseand in law, the Tribunal erred in including the loss making Company VJIL as comparable with the company having Cost + model? (d) Whether on the facts and in the circumstance of the caseand in law, the Tribunal erred in holding that inclusion of Company Quintegra engaged in the proprietary software products and having substantial R D activities resulting it into creation of IPRs can be considered as comparable company with the assessee engaged in software development activity? (e) Whether on the facts and in the circumstance of the caseand in law, the Tribunal was correct in excluding the Infosys as comparable on the ground of its higher turnover and having higher assets? (f) Whether on the facts and in the circumstance of the caseand in law, the Tribunal was justified in excluding Transworld Infotech Ltd., from the list of comparable companies? (g) Whether on the facts and in the circumstance of the caseand in law, the Tribunal erred in excluding KALS Information Solutions Ltd. and M/s. Helios Matherson Information Technology Ltd. from the list of comparables on the basis of previous years documentations of the assessee without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Revenue, would amount to double disallowance as correctly held by the Tribunal. (vi) In the above view, the question (a) as proposed, does not give rise to any substantial question of law. Thus, not entertained. 4 Re Question (b): (i) It is an agreed position between the parties that the issue raised herein stands concluded in favour of the Respondent Assessee and against the Appellant Revenue by the decision of this Court in CIT v/s. Gem Plus Jewellery India Pvt. Ltd., 330 ITR 175. (ii) In the above view, as the issue stands concluded by the decision of this Court in Gem. Plus Jewellery India Pvt. Ltd., (supra), the question as proposed does not give rise to any substantial question of law. Thus, not entertained. 5 So far as Question (c) to (h) are concerned, they raise issues of computation of income from international transactions. The fact common to the above questions (c) to (h) are that Respondent is, inter alia, engaged in providing three types of services to its Associated Enterprise viz: (a) software development services, (b) design, engineering, testing and authoring services and (c) business support services. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ope the above observations would be kept in mind both by the Revenue and the Assessee who seek to prefer appeals from the orders of the Tribunal on Transfer Pricing particularly inclusion/exclusion of comparables. The Commissioner of Income Tax and the Assessee in general would do well to also review the appeals filed and withdraw the same, in case the only challenge therein is to findings of facts, if the same is without evidence of any perversity or is in the face of settled legal position. The counsel of the Revenue is directed to serve a copy of this order on the Principal Chief Commissioner of Income Tax within the State of Maharashtra for necessary action. Mr. Tejveer Singh, learned Counsel for the Revenue, informs us that the impugned order of the Tribunal has been examined in the light of the above observations. Mr. Singh, further states that the Revenue seeks to challenge the impugned order as it is perverse. 6 Re Question (c): (i) The Respondent in its transfer pricing study to determine the ALP of its transactions with its AE, had included the VJIL Consulting Ltd., (VJIL) as a comparable. However, the TPO has rejected the same as compara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8 Re Question (e): (i) The Respondent had in its transfer pricing study to determine the ALP had included M/s. Infosys Technologies Ltd., as a comparable. However, thereafter, it was contended by the Respondent that M/s. Infosys Technologies Ltd., is not a comparable because of the disparity between M/s. Infosys Technologies Ltd and the Respondent Assessee in sheer size i.e. turnover, assets and risks taken. (ii) The Respondent invited attention of the TPO and the DRP that in earlier Assessmentnamely Assessment Year 2006 07 in the Assessee's own case, the TPO had excluded M/s. Infosys Technologies Ltd., as a comparable. Notwithstanding the above, both the TPO and the DRP included M/s. Infosys Technologies Ltd.. as a comparable. (iii) On appeal before the Tribunal, the impugned order held that M/s. Infosys Technologies Ltd., cannot be held as a comparable. This on application on functions, assets and risks test. Besides, the impugned order of the Tribunal places reliance upon the decision of the Delhi High Court in CIT v/s. Agnity India Technologies Pvt. Ltd., reported in 219 Taxmann. 26 wherein it held that M/s. Infosys Technolog ..... X X X X Extracts X X X X X X X X Extracts X X X X
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