TMI Blog2018 (8) TMI 1852X X X X Extracts X X X X X X X X Extracts X X X X ..... . and 7) Tata Elxsi Ltd. are also covered in favour of the assessee by the same tribunal order rendered in the case of Applied materials India Pvt. Ltd. vs. ACIT (Supra). Respectfully following the same, we uphold the exclusion of these Seven comparables also. Exclusion of E Infochips Ltd. is covered in favour of the assessee by the tribunal order rendered in the case of Saxo India Pvt. Ltd. vs. ACIT [ 2016 (2) TMI 604 - ITAT DELHI] . Respectfully following the same, we uphold its exclusion. Respectfully following this tribunal order, we exclude these 10 comparables i.e. 1) Accropetal Technologies Ltd. (Seg.), 2) E Zest Solutions Ltd., 3) E Infochips Ltd., 4) ICRA Techno Analytics Ltd., 5) Infosys Ltd., 6) Larsen Toubro Infotech Ltd., 7) Persistent System Solutions Ltd., 8) Persistent Systems Ltd., 9) Sasken Communication Technologies Ltd. and 10) Tata Elxsi Ltd. Regarding MYM Technologies Ltd., we find that this comparable was excluded on this basis that data for current financial year are not available. Before us, it was submitted that page 2244 of (ARC) is relevant. We find that on this page, Directors Report is available containing brief Financial result for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tree Ltd., M/s. R.S. Software (India) Ltd., M/s. Larsen and Toubro Infotech Ltd., from the list of comparables, holding them to be functionally dissimilar as they are having significant onsite revenues, thereby seeking exact comparability while searching for comparable companies of the assessee under TNMM method, whereas requirement of law and international jurisprudence require seeking similar comparable companies. Also, the nature of activity, i.e., software development remains the same, irrespective of the company engaged in providing onsite or offshore services. 3. The DRP erred in directing the AO to exclude M/s. Acropetal Technologies Ltd., from the list of final comparables also for the reason that clear segmental information of the employee cost and export earning filter was not available without appreciating that proper segmental information is available on Prowess database as well as audited financials. 4. The DRP erred in directing the AO to exclude M/s. Mindtree Ltd., from the list of comparables holding it to be functionally dissimilar also for the reason that there were extraordinary event of merger when it has not been proved that such merger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ologies Ltd., from the list of comparables merely to maintain consistency, even in the absence of objection with respect to inclusion of the said comparables in the list. Corporate Issue: 10. The DRP erred in directing the AO to follow the ratio laid down by the Hon'ble Court in the case of Tata Elxsi Limited 349 ITR 98 and exclude communication expenses (dataline charges) from the total turnover also, while computing the deduction u/s 10A of the I.T. Act, without appreciating the fact that there is no provision in section 10A that such expenses should be reduced from the total turnover also, as clause (iv) of the explanation to section 10A provides that such expenses are to be reduced only from the export turnover. 11. The DRP erred in not appreciating the fact that the jurisdictional High Court's decision in the case of Tata Elxsi Limited 349 ITR 98 has not been accepted by the department and an appeal has been filed before the Hon'ble Supreme Court. 12. For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the DRP be reversed and that of the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of multiple year data. [corresponding to ground no. 4 (v)] 9. The Ld. AO in pursuance of the order of the Ld. TPO and the directions of the Ld. DRP erred on facts and law while including Persistent Systems and Solutions Limited as a comparable whereas the same should have been excluded for the reasons of functional dissimilarity. [corresponding to ground no. 4 (vi)] 10. The Ld. AO in pursuance of the order of the Ld. TPO and the directions of the Ld. DRP erred on facts and law while including Persistent Systems Limited as a comparable whereas the same should have been excluded for the reasons of functional dissimilarity. [corresponding to ground no. 4 (vi)] 11. The Ld. AO in pursuance of the order of the Ld. TPO and the directions of the Ld. DRP erred on facts and law while including Sasken Communication Technologies Limited as a comparable whereas the same should have been excluded for the reasons of functional dissimilarity. [corresponding to ground no. 4 (vi)] 12. The Ld. AO in pursuance of the order of the Ld. TPO and the directions of the Ld. DRP erred on facts and law while excluding Intertec Communications Ltd as a comparable b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments before or at the time of hearing of this Appeal. 4. Learned DR of the revenue supported the Draft Assessment order passed by the A.O. Learned AR of the assessee supported the order of DRP in respect of the appeal filed by the revenue. Regarding the appeal filed by the assessee, he submitted that only Ground Nos. 9, 10, 11 14 are to be decided and the remaining grounds are not pressed. He also submitted a chart regarding all 13 comparables selected by the TPO and submitted that out of the same, DRP has excluded 10 comparables and the revenue in its appeal is challenging all these 10 exclusions. He submitted that the assessee agrees for inclusion of 3 comparables out of 10 exclusions ordered by DRP and these three comparables are 1) Evoke Technologies Pvt. Ltd., 2) Mindtree Limited (Seg.) and 3) R S Software (India) Ltd. He submitted that the issue regarding exclusion of remaining seven comparables excluded by DRP ad 3 comparables not excluded by DRP but exclusion being requested by the assessee i.e. total 10 exclusions is covered in favour of the assessee by the tribunal order rendered in the case of Commscope Networks India Pvt. Ltd. in IT (TP) A No. 166/Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Case law Compendium for ready reference. This Para reads as under:- 9. Now we decide about the remaining 6 comparables excluded by DRP and 4 comparables retained by DRP but for which the assessee is seeking exclusion. Out of these 6 comparables excluded by DRP, one comparable ICRA Techno Analytics Ltd. is having RPT in excess of 15% and therefore, for this reason alone, this comparable has to be excluded although DRP has excluded it for a different reason that it is having various activities and segmental data are not available. We uphold its exclusion on account of RPT filter. Exclusion of Acropetal Technologies Ltd. (Seg) is covered in favour of the assessee by the same tribunal order rendered in the case of Applied materials India Pvt. Ltd. vs. ACIT (Supra). Respectfully following the same, we uphold its exclusion. Exclusion of 1) e Zest Solutions Ltd., 2) Infosys Ltd., 3) Larsen Toubro Infotech Ltd., 4) Persistent Systems Solutions Ltd., 5) Persistent Systems Ltd., 6) Sasken Communication Technologies Ltd. and 7) Tata Elxsi Ltd. are also covered in favour of the assessee by the same tribunal order rendered in the case of Applied materials India Pvt. Ltd. vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this ARC, the corresponding audited Balance Sheet and P L Account are not available. Hence, we find no merit in the assessee s request for inclusion of this comparable. 9. Regarding FCS Software Solutions Ltd., it is seen that it is noted by DRP on page 8 of its directions that revenue of ₹ 115.99 Crores has been shown from Software Development and other services and there is no segmental information available in respect of Software Development. It is also noted by DRP that it is not possible to ascertain as to whether this company passes employees cost filter or not. It is also noted that this company is predominantly engaged in onsite development of software. Learned AR of the assessee has placed reliance on the tribunal order rendered in the case of Marvell India Pvt. Ltd. (Supra) and our attention was drawn to page 2466 of case Law Compendium. In this tribunal order, only this aspect was considered and decided that only for this reason that working capital adjustment is high, a comparable cannot be excluded but there is no discussion or decision on this aspect that there is no segmental information available and regarding employees cost filter and onsite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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