2021 (11) TMI 1151 - AT - Income Tax

TP Adjustment - Comparable selection for Mapping Segment - HELD THAT - Infosys BPM Ltd. comparable doesn t meet the FAR profile with the assessee. Hence we direct it to be deleted from the final list of comparable. Dun Bradstreet Technology and Data Services Pvt. Ltd.specializes in providing Predictive Analytics Decision Management and In formation Management platforms and services to Dun Bradstreet and its clients globally. Value added services by the company are Predictive analytics Risk management Rating and scoring Business intelligence and SME banking thus the functional profile of the assessee matches with that of the comparable cannot be affirmed. Nihilent Analytics Limited has developed and been awarded a patent for Change Management based on MC3 framework for Performance Management and Strategy Execution. Nihilent also has a patent for its predictive Customer Loyalty Evaluation . We find that the companies primarily rendering software services and doesn t hold any inventory. We have gone through the record before us and find that the ld. DRP has rightly allowed the inclusion of this comparable subjected to the availability of the accounts and passing of the filters. Hence we decline to interfere with the order of the ld. DRP on this issue.

Summary

Issues Involved:
1. Selection of comparables for Mapping Segment.

Analysis:
The appeal was filed against the order passed by the Assessing Officer under sections 143(3) read with 144C(13) of the Income Tax Act, 1961. The issue at hand pertains to the Mapping Segment of the assessee's business operations. The Group's parent company, COWI Holding A/S, is a significant entity in the field of engineering, environmental science, and economics. COWI India Private Limited, a subsidiary of COWI A/S, operates under two major segments: Engineering Design services and Mapping services.

Comparables Selection:
The assessee raised objections to the selection of two comparables, namely Infosys BPM Ltd., Dun & Bradstreet Technology & Data Services Pvt. Ltd, and Nihilent Analytics Limited. Infosys BPM Ltd. was found unsuitable as it did not align with the functional profile of the assessee. The Tribunal directed the exclusion of Infosys BPM Ltd. from the final list of comparables. Regarding Dun & Bradstreet Technology and Data Services Pvt. Ltd., it was noted that the company had significant related party transactions, rendering it incomparable to the assessee. Thus, the Tribunal upheld the objection and ruled against including Dun & Bradstreet Technology and Data Services Pvt. Ltd. as a comparable.

Nihilent Analytics Limited:
The assessee contested the inclusion of Nihilent Analytics Limited as a comparable. Nihilent is primarily engaged in providing software services and does not hold any inventory. The Tribunal reviewed the details and concurred with the decision of the Dispute Resolution Panel (DRP) to include Nihilent Analytics Limited as a comparable, subject to certain conditions. Consequently, the Tribunal declined to interfere with the DRP's order on this particular issue.

In conclusion, the Tribunal partially allowed the appeal of the assessee, emphasizing the importance of selecting appropriate comparables for a fair assessment. The judgment was pronounced in open court on 02/11/2021.