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TMI Blog2017 (11) TMI 1895X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of appeal are as under: "GENERAL 1. The assessment order dated January 27, 2015 passed by the learned Assessing Officer ("AO") pursuant to the directions passed by the Honorable Dispute Resolution Panel ("DRP") is not in accordance with the law and is contrary to the facts and circumstances of the present case and in any case in violation of the principle of equity and natural justice. TRANSFER PRICING 1. The Honourable DRP and the learned AO erred in fact and in law in making an adjustment to the Arm's Length Price ("ALP") of the international transactions of the Appellant in the software development segment; 2. The Honorable DRP and the learned AO have erred in upholding the action of the Transfer Pricing Officer (" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g companies selected by the Appellant despite the same being functionally comparable to the Appellant and qualify the legally acceptable criteria for comparability: - Akshay Software Technologies Limited - LGS Global Limited - Quintegra Solutions Limited - Helios and Matheson Information Technology Limited - Silverline Technologies Limited - Sagarsoft India Private Limited - R Systems International Limited 8. The Honorable DRP has erred in upholding the Learned TPO/AOs action of wrongly computing the operating margin of the Appellant and comparable companies; 9. The Honorable DRP and the learned AO / TPO have erred in not granting the risk adjustment, as claimed by the Appellant; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, whether the Hon'ble Dispute Resolution Panel can make adjustment on the basis of advance received from AEs in absence of debtors and inventory in the case of assessee for calculating the cost of working capital built in the profit margin. 5. On the facts and in the circumstances of the case, whether the Hon'ble Dispute Resolution Panel were justified in directing the TPO to adjust the profit margin of the assessee for the entire amount of advances received from AE on the ground that there is time value of money. 6. On the facts and in the circumstances of the case, the Hon'ble Dispute Resolution Panel erred by not upholding the approach of the TPO in its order. 7. The facts and in the circumstances of the case, wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the grounds mentioned above." 4. At the very outset, it was pointed out by the bench that as per ground no. 10 of the appeal of the revenue, it is the grievance of the revenue that the DRP was not correct in applying onsite filter in software development segment in the case of M/s. RS Software India Ltd. As per ground no. 9, this is the grievance of the revenue as to whether the application of new filter (Onsite filter) is within the purview of the DRP. The bench observed that this Tribunal is taking a consistent view that if a new filter is applied, it should be applied to all comparables and not to particular comparables on pick and choose basis and therefore, in that situation where new filter is applied, the matter has to go back t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusion of this comparable i.e. M/s. RS Software India Ltd. but there is no objection on this aspect in the grounds raised before us that onsite filter should not be applied. Onsite filter is very relevant and important filter in TP study and therefore, it cannot be said that onsite filter cannot be applied. Hence, we hold that in the facts of the present case, onsite filter has to be applied but since it was applied by the DRP to only one comparable, all the comparables should be examined in the light of this filter and thereafter, the list of comparables should be finalized. We want to mention that in respect of those comparables which are passing through this filter i.e. onsite filter, the DRP should examine the applicability of all ot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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