TMI Blog2024 (1) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... the TPO to exclude Vitae from the list of comparables. Access Healthcare company is engaged in providing professional, technical and business services. The nature of services provided by the company falls into the category of KPO. Thus, the services rendered by the company requires higher level of skill and specialized knowledge. The companies rendering KPO services are not comparable to the company providing ITES BPO services. R. Systems International Ltd. rejected as comparable on the ground of different financial year - It is not the case of Revenue that the company is in any manner functionally different from that of the assessee or the said company does not fall within any of the parameters of filters applied. The Hon ble Delhi High Court in the case of CIT vs. Mc Kinsey Knowledge Centre India Pvt. Ltd [ 2015 (3) TMI 1226 - DELHI HIGH COURT] has held that, if from the available data on record the results for financial year can reasonably be extrapolated then the comparable cannot be excluded solely on the ground that the comparables have different financial year endings. Thus, in light of our above observations we hold R-Systems to be a valid and good comparable and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nowledge processing services such as patent analysis, technical editing, deep indexing of scientific research papers, etc. The company is also providing assistance to the publishers and pharmaceutical companies to maximize the value of their information assets. To substantiate the activities carried out by Domex the ld.Counsel for the assessee referred to the Annual Report of the company at page 1 to 46 of the Paper Book. The ld.Counsel for the assessee further submitted that Domex is functionally dissimilar as it is engaged in diversified activities, including software development with usage of very high end software. No segmental information of various service segment is available in the Annual Report. In the absence of segmental data it is difficult to attribute income earned by the company in different segments including BPO services, hence, the said company should be rejected as comparable. The ld.Counsel for the assessee referred to the decision in the case of Katerra Technology Services LLP vs. ACIT, 152 taxmann.com 397(Pune-Trib) to contend that in A.Y. 2018-19 Domex was held as not comparable to a Information Technology service provider company. He further referred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than one acquisition in a short span of time. Therefore, such companies are not good comparables. To support this proposition he placed reliance on various decisions including: (i) Optiva India Technologies (P) Ltd. vs. ACIT, 141 taxmann.com 560 (Pune-Trib) (ii) Rage Framework India (P) Ltd. vs. ACIT, 147 taxmann.com 117 (Pune- Trib) (iii) JCIT vs. HSBC Professional Services (India) (P) Ltd., 145 taxmann.com 330 (Mum-Trib). (iii) Vitae International Accounting Services Pvt. Ltd . ( Vitae ) The ld.Counsel for the assessee submitted that the said company is primarily engaged in accounting, auditing, computer programming, consultancy, technical content writer, processing and staff services. To substantiate his submissions he referred to the Annual Report of the company for Financial Year ending on 31/03/2018 at page 259 to 293 of the Paper Book. He further submitted that website of Vitae suggest that the company is engaged in staffing services. It is a global staffing service provider for accounting, tax and pension firms worldwide. He referred to the decision of Pune Tribunal in the case of Rage Framework India P. Ltd. vs. ACIT(supra), wherein the said company was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsurance, banking, human resources, etc. The company was accepted as comparable by TPO in Assessment Year 2017-18 and 2020-21. There has been no change in the business activities of the company. Once the TPO accepted the company as comparable, without there being any change in the business activity of the company the TPO cannot exclude the said company from the list of comparables. 5. Shri Rignesh Das representing the Department vehemently defended the direction of the Dispute Resolution Panel (DRP) and impugned assessment order. Placing reliance on the order of TPO and DRP directions the ld. Departmental Representative prayed for rejecting the submissions of the assessee and accepting list of comparables prepared by the TPO as final. 6. We have heard the submissions made by rival sides and have examined orders of authorities below. The assessee is a BPO and a captive service provider. The assessee is providing Business Support Services to its AEs. The limited issue for adjudication in the present appeal is with reference to inclusion/exclusion of comparable companies. The assessee by way of sub- grounds to ground No.2 has raised multiple arguments, however, the ld.Counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be accepted as comparable. Thus, in the facts of the case, we find merit in argument of the assessee to exclude MPS Ltd. from the list of comparable. We direct accordingly. 7.3 Vitae - The assessee is seeking exclusion of Vitae on the ground of functional disparity. The said company is engaged in account, audit, computer programming, consultancy, technical content writing and staffing services. The ld. Counsel for the assessee has brought to the notice of Bench that in the case of Rage Frameworks India (P) Ltd. vs. ACIT(supra), Vitae was held to be functionally different from the company engaged in providing ITES. We find that in the aforesaid case the Co-ordinate Bench further observed that the said company is engaged in providing diversified services cannot be considered as comparable to ITES service provider. Taking into consideration entire facts, we direct the TPO to exclude Vitae from the list of comparables. 7.4 Access Healthcare The company is engaged in providing professional, technical and business services. The nature of services provided by the company falls into the category of KPO. Thus, the services rendered by the company requires higher level of skill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial year endings. Thus, in light of our above observations we hold R-Systems to be a valid and good comparable and direct the A.O to include R-Systems in the list of comparables. Sundaram Business Services - The TPO rejected the said company on the ground of functional disparity. The ld. Counsel for the assessee has pointed that the TPO had accepted the company as comparable in A.Y 2017-18 and 2020-21. There has been no change in the business activity of the assessee or comparable company in the impugned A.Y. The aforesaid facts have not been disputed by the Revenue. Once, the company has been accepted as functionally comparable in the preceding and the subsequent assessment years, there can be no plausible reason to reject the same on the ground of functional disparity in the sandwich assessment year. Hence, the said company is directed to be included in the list of comparables. The assessee succeeds on ground No.2.8 and 2.10. 9. No submissions were made by the ld. Counsel for the assessee with respect to ground No.2.1 to 2.7 and 2.9, hence, the aforesaid grounds are dismissed. 10. In ground No.3 of appeal, the assessee has assailed levy of interest u/s. 234B and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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