TMI Blog2018 (7) TMI 2077X X X X Extracts X X X X X X X X Extracts X X X X ..... ce S.Sujatha Sri K.V.Aravind, Adv. For The Appellants. Sri K.mallaha Rao, Adv. Sri Sandeep S. Karhail, Adv. For The Respondent. JUDGMENT S. Sujatha, These Appeals are filed by the Revenue purportedly raising substantial questions of law arising from the Order of the Income Tax Appellate Tribunal, Bangalore Bench A , Bangalore, in S.P. No.130/Bang/2014 and IT[TP]A No.271/Bang/2014 dated 14.08.2014, relating to the Assessment Year 2009-10. 2. The substantial questions of law framed by the Revenue in the Memorandum of Appeals are as under: 1. Whether on the facts and in the circumstances of the case, the Tribunal was justified in allowing relief to the assessee b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or comparable financial cycle as the tested party and Tribunal the Tribunal accepted assessee s comparables without adducing any reason for the same? 5. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Resale Price Method (RPM) as adopted by the TPO is not applicable in the case the tax payer on the ground that the purchase and sale transactions are with the same AE and that TNMM is the right method to be adopted? 3. The learned Tribunal, after discussing the rival contentions of both the Appellants-Revenue and Respondent-Assessee, has returned findings as under: Regarding Substantial Question No.2: 9. At the time of hearing, it was brought to o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of realization of proceeds from debtors, taken to creditors, intercompany statements etc., was a sum of ₹ 179,01,08,756. Out of the above, the assessee on his own has excluded foreign exchange fluctuation on account of advances towards share capital charged to P L account and foreign exchange fluctuation in the matter of purchase of fixed assets charged to P L account. It is thus clear from the chart that a sum of ₹ 37,89,23,185 which was sought to be added as part of the operating income on rendering software development services is only on account of transactions of rendering software development services by the assessee to its AE and the foreign exchange fluctuation at the time of realization of the payment for rendering sof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices. In this regard, the learned counsel for the assessee has brought to our notice the decision of the Mumbai Bench of the Tribunal in the case of Nethawk Networks Pvt. Ltd., v. ITO, ITA No.7633/Mum/2012, order dated 06.11.2013. In this case, the Tribunal followed the decision rendered by the Mumbai Bench of the Tribunal in the case of Wills Processing Services [I] P. Ltd., ITA No.4547/Mum/2012. In the aforesaid decisions, the Tribunal has taken the view that Bodhtree Consulting Ltd., is in the business of software products and was engaged in providing open end to end web solutions software consultancy and design development of software using latest technology. The decision rendered by the Mumbai Bench of the Tribunal in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present year also remains identical to the facts and circumstances as it prevailed in AY 08-09 as far as this comparable company is concerned. Respectfully following the decision of the Tribunal referred to above, we hold that Infosys Ltd., be excluded from the list of comparable companies. 26.3 KALS Information Systems Ltd: As far as this company is concerned, it is not in dispute before us that this company has been considered as not comparable to a pure software development services company by the Bangalore Bench of the Tribunal in the case of M/s. Trilogy E-Business Software India Pvt. Ltd., [supra]. The following were the relevant observations of the Tribunal:- xxxxx Following the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he questions like Treaty Shopping, Base Erosion and Profit Shifting (BEPS), Transfer of Shares in Tax Havens (like in the case of Vodafone etc.), if based on relevant facts, such substantial questions of law could be raised before the High Court under Section 260-A of the Act, the Courts could have embarked upon such exercise of framing and answering such substantial question of law. On the other hand, the appeals of the present tenor as to whether the comparables have been rightly picked up or not, Filters for arriving at the correct list of comparables have been rightly applied or not, do not in our considered opinion, give rise to any substantial question of law. 56. We are therefore of the considered opinion that the present a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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