TMI Blog2022 (5) TMI 1515X X X X Extracts X X X X X X X X Extracts X X X X ..... learly meets the filter of 75% of export to total sales. In view of this fact, we do not find any merit in the grounds of appeal no.1 raised by the Revenue. Accordingly, the ground of appeal no.1 stands dismissed. India Tourism Development Corporation Ltd. as comparable in the business support services segment - Revenue is seeking exclusion of this company on the ground that it is loss making company and also failed to meet export filter. This company was rejected by the TPO from the set of comparables on the ground of functionality differences - Admittedly, this is a Government of India company and this company is not comparable with that of the respondent-assessee company which is a pure private company as Govt. company is not driven by profit motive alone, but other consideration also weigh in such as discharge of social obligation etc. as held in the case of CIT vs. Thyssen Krupp Industries India (P.) Ltd.,[ 2016 (4) TMI 88 - BOMBAY HIGH COURT ]. Thus, it is not a comparable. In the circumstances, it is not necessary for us to advert to other contentions raised seeking exclusion of this company by the Revenue. Accordingly, we direct the Assessing Officer/TPO to exclude th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irecting to include Silverline Technologies Pvt Ltd, as a comparable, despite the fact it is rejected by the assessee itself, in its T. P. Study Report, on the ground that it is functionally different company. 9. The DRP has erred on the facts and circumstances of the case and in law, in directing to include India Tourism Development Corporation Ltd., as a comparable, despite the fact it is a loss making company and it also fails export filter. 10. The appellant craves leave to add, alter or amend any or all the grounds of appeal. 3. Briefly, the facts of the case are as under : The respondent-assessee is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of providing software development services, IT enabled services and sales support services to overseas BMC group entities. The return of income for the assessment year 2011-12 was filed on 27.11.2011 declaring total income of Rs.9,77,92,780/-. The respondent-assessee company also reported the following international transactions with its Associated Enterprises (AEs) within the meaning of section 92B of the Act :- Sr.No. Natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Pricing Officer (TPO) u/s 92CA(1) for the purpose of benchmarking the above international transactions reported by the respondent-assessee company in Form No.3CEB. The TPO vide order dated 29.01.2015 passed u/s 92CA(3) of the Act suggested the TP adjustment of Rs.41,79,38,397/-. While doing so, the TPO had rejected the TP study report submitted by the respondent-assessee by using a single year data, modified certain filters, rejected certain comparable companies selected by the respondent-assessee company and accepted certain additional companies as comparables. Accordingly, the TPO computed the profit level margin of the comparables in respect of the international transactions of software development services at 26.23% as against 11.44% of the respondent-assessee company. As a result, the TPO suggested upward adjustment of Rs.37,77,97,287/- in respect of software development services. The TPO also computed the margin of comparables in respect of IT enabled services at 25.59% as against 11.44% of respondent-assessee company and suggested an adjustment of Rs.1,01,83,479/-. The TPO also computed the margin of the comparables in respect of sale support services at 35.82% as against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enging the direction of the ld. DRP in directing the Assessing Officer/TPO to include Maveric System Ltd. in the software segment as it is a loss making company and failed to export filter. We do not find merit in this contention raised on behalf of the Revenue i.e. the company is a loss making company for the last 3 years. We find at page no.542 of the Paper Book (financial performance of the this company for the previous years), wherein, it is clearly shown that even in the financial year 2009-10, the company made profit of Rs.609.53 lakhs, which is extracted as under :- (Amount in Rupees Lakhs) 2010-11 2009-2010 Income From Operations (497.66) 717.68 Profit Before Depreciation (587.41) 659.81 Less: Depreciation 117.61 50.28 Profit Before Tax (705.02) 609.53 Less: Provision for Tax Prior Period adjustments 49.17 103.67 Profit after Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent-assessee company that one of the segment of company known as Ashok Reservation Marketing Services Division is engaged in providing group marketing services. Thus, this segment results is comparable with the assessee company in respect of business support services segment. Now, the Revenue is seeking exclusion of this company on the grounds mentioned above. Admittedly, this is a Government of India company and this company is not comparable with that of the respondent-assessee company which is a pure private company as Govt. company is not driven by profit motive alone, but other consideration also weigh in such as discharge of social obligation etc. as held by the Hon ble Bombay High Court in the case of CIT vs. Thyssen Krupp Industries India (P.) Ltd., 385 ITR 612 (Bom.). Thus, it is not a comparable. In the circumstances, it is not necessary for us to advert to other contentions raised seeking exclusion of this company by the Revenue. Accordingly, we direct the Assessing Officer/TPO to exclude this company from the list of comparables in respect of business support services segment. Accordingly, this ground of appeal no.9 stands allowed. 15. In the result, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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