TMI Blog2020 (11) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... lected by the learned Transfer Pricing Officer and therefore he should have brought on record necessary details to show that this company is not engaged in development of the software but in the similar kind of functions as performed by the assessee. For this reason , we do not find any infirmity in the order of the learned Dispute Resolution Panel in directing the learned TPO to exclude this comparable company. Thus, direction of the learned Dispute Resolution Panel with respect to exclusion of this comparable is upheld. E Clrex Services Limited - This company is in the business of providing Knowledge Process Outsourcing services which is not the function of the assessee. Therefore, we do not find any infirmity in the direction of the learned dispute resolution panel in directing the learned transfer pricing officer to exclude this comparable company. Thus, direction of the learned dispute resolution panel with respect to this comparable is upheld. Infosys BPO Ltd and TCS E serve Ltd - No infirmity in the direction of the learned dispute resolution panel to exclude both these comparable from the comparability analysis on the basis of their turnover being multiple times then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) Infosys BPO Ltd. v) TCS E-Serve Ltd. 5. The assessee has raised the following grounds of appeal in cross objection number 49/del/2016 - 1. That on the facts and circumstances of the case and in law, the present appeal is not maintainable and non-est as it does not comply with the provisions of section 253(6) of the Act. 2. That on the facts and circumstances of the case and in law, the Dispute Resolution Panel ( DRP ) erred in partially upholding the order of the Transfer Pricing Officer ( TPO ) which is arbitrary, bad in law and void ab-initio. 3. That on the facts and in law the action of the AO in invoking the provisions of Chapter X - Special Provisions relating to avoidance of tax of the Act, without appreciating that there would have been no profit shifting from India is bad in law. Further, DRP erred in sustaining the same.Grounds relating to Transfer Pricing ( TP 1 adjustments: 4. The AO / DRP / TPO erred in law and on facts by rejecting the transfer pricing study of the Assessee without providing any cogent reason for the same. 5. AO / DRP / TPO have erred in law and facts by ignoring the provisions of Rule 10B / 10CA of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Commissioner Of Income Tax, Transfer Pricing Officer 3 (2), New Delhi examined the same and rejected the filters adopted by the assessee as well as the comparable companies selected by the assessee and its accept/ reject metrics. He considered all the seven comparable selected by the assessee and found them not a suitable comparable. Therefore he carried out his own search and found 10 comparable companies whose margin was computed at 25.74% and assessee is margin was computed at 15.63% , therefore, an adjustment was proposed by the show cause notice of ₹ 29,396,019/ . The assessee objected to the showcause notice raising several issues. The learned Transfer Pricing Officer considered the arguments of the assessee and ultimately reached the set of 10 comparable companies whose margin was computed after granting working capital adjustment of 32.26%. The arm s-length price of the international transaction on the total operating cost of 29,08,51,595 was then determined at ₹ 384,680,320/ and thus an adjustment of ₹ 48,359,544 was made by passing an order u/s 92CA (3) of the act on 29/1/2015. The learned assessing officer passed a draft assessment order u/s 144C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tia technologies Ltd we find that the learned Dispute Resolution Panel has excluded this comparable by following the decision in case of Telecordia technologies India private limited (ITA number 7821/MU M/2011 and host of other rulings. The learned Dispute Resolution Panel in its direction has also given a finding in paragraph number 4 that this comparable is engaged in software development and also into product sales hence not comparable. The learned authorised representative has drawn our attention to page number 298 300 of the paper book submitted wherein it is claimed by the learned authorised representative that this company is involved in the development of the software. We find that these pages do not relate to the standalone balance sheet , which has been used by the learned transfer pricing officer for the comparability analysis but is part of the Accentia technologies Ltd on consolidated basis. At page number 40 53 we find that the standalone balance sheet of the above comparable company is submitted. The same is at page number 306 to 323 of the paper book. We also looked at the schedule number 8 wherein income with respect to sales and services are shown. This is at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer pricing officer to exclude these comparable. With respect to E Clrex services Ltd it is held that this company is functionally not comparable as it has diverse functionality of high-end business. This fact was examined by us by looking at the annual account submitted by the assessee at page number 432 559 of the paper book standalone financial statements are available at page number 56 (page number 433 of the paper book) of annual accounts at Page number 499 of paper book speaks about the revenue recognition of comparable company which is that revenue from that analytic services and process solution comprises of both time/unit price and fixed fee based service contracts.. Further in note number 19 at page number 79 of the annual report (page number 512 of the paper book) clearly shows that this company is in the business of providing Knowledge Process Outsourcing services which is not the function of the assessee. Therefore, we do not find any infirmity in the direction of the learned dispute resolution panel in directing the learned transfer pricing officer to exclude this comparable company. Thus, direction of the learned dispute resolution panel with respect to this comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
