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TMI Blog2020 (2) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... earned AR restricted her arguments in respect of ground No.4, ground No.5.12 and ground No.5.13. In ground No.5.12 also, the learned AR canvassed for inclusion of only two comparable companies, viz., Powersoft Global Solutions Limited and Evoke Technologies Private Limited. The learned AR made a statement at bar that the assessee is not pressing other grounds. The ground pressed by the learned AR, viz., ground no.4, 5.12 and 5.13 read as under:- "4. Determination of Net Cost Margin of the Appellant The Ld.AO/Ld.TPOhad erred on facts and in law in not acknowledging that the sub-contracting charges incurred by the Appellant represents arm's length consideration and was thereby required to be considered as pass-through cost and that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as profit level indicator. The TPO accepted the TNMM method as well as profit level indicator of the assessee. The assessee had computed arithmetical mean of 12.52 % in respect of comparables owing PLI of the assessee was 18.16%. Accordingly, the claim that its international transactions relating to software development services is at arm's length. 5. Rejecting the TP study of the assessee, the TPO selected following 10 comparables:- Sl. No. Name of the Company Mark-up on Total costs (WC-unadj) (in %) Mark-up on Total costs (WC-adj) (in %) 1. Datamatics Global Services Ltd. 14.57 15.25 2. Genesys International Corporation Ltd. 30.09 25.94 3. ICRA Techno Analytics Ltd. 17.24 16.42 4. Infosys Ltd. 43.10 42 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airly admitted that the assessee made identical claim in the immediately preceding assessment year, i.e., assessment year 2011-2012 and it has been rejected by the Tribunal. 10. We heard the learned Departmental Representative on this issue and perused the record. We noticed that identical issue was considered by the co-ordinate Bench of the Tribunal in assessee's own case for assessment year 2011-2012 in IT(TP)A No.17/Bang/2016 dated 21.09.2016 and the same has been decided against the assessee with the following observations:- "7. We have considered the rival submissions as well as the relevant material on record. Undisputedly, the assessee is charging a mark up on the software development services provided to the AE being captive serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the operating cost and operating revenue of the said segment of services. Accordingly, the cost of software development services cannot be treated in this fashion as claimed by the assessee. Hence we do not find any merit or substance in the contention raised by the assessee on this issue." 10.1 Since there is no change in facts relating to this claim, consistent with the view taken by the co-ordinate Bench, we also reject this ground of the assessee. 11. In ground No.5.12, the assessee seeks inclusion of only two companies, viz., Powersoft Global Solutions Limited and Evoke Technologies Private Limited, even though some more companies also mentioned in the ground. 12. With regard to these two companies, according to the learned AR, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8]. 15. We heard the learned DR and perused the record. We noticed that M/s.CGI Information Systems and Management Consultants Pvt. Ltd. (supra) is also engaged in the business of providing contract software development services and information technology enabled services to its holding company, as captive service provider. We noticed that the coordinate Bench, in the above said case, has followed the decision rendered by the Delhi Bench of the Tribunal in the case of Agilis India Technologies (P.) Ltd. v. ITO [(2018) 89 taxmann.com 440 (Delhi-Trib.)] in excluding both the companies referred above. The co-ordinate bench noticed that M/s.Agilis India Technologies (P.) Ltd. was also capital service provider to its AE and the Delhi Bench of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct company and segmental information on SWD services was not available. The Tribunal also noticed that the appeal filed by the revenue against the tribunal's order was dismissed by the Hon'ble Delhi High Court in ITA No.682/2016. (c) Persistent Systems Ltd., was excluded from the list of comparable companies on the ground that this company was a software product company and segmental information on SWD services was not available. The Tribunal in coming to the above conclusion referred to the decision rendered by ITAT Delhi Bench in the case of Cash Edge India Pvt.Ltd. Vs. ITO ITA No.64/Del/2015 order dated 23.9.2015 and the decision of Hon'ble Delhi High Court in the case of Saxo India Pvt.Ltd. (supra). The findings in this regard are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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