9911796707
TMI Blog2014 (12) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... inst ₹ 24.02 lakhs of employee cost for the year ending 31st March, 2005, employee cost increased to ₹ 132.54 lakhs - also the data processing charges to the extent of ₹ 1.04 crores has increased which indicates that the assessee is outsourcing the work - due to amalgamation during the year the assessee's business model has changed - For all the three reasons, employee cost filter, outsourcing and amalgamation, and Nucleus Net Soft & GIS (India) Ltd. cannot be selected as comparable – thus, the TPO should verify the financials of the company and there after decide the issue taking into account the ratio of the decision on the issue – thus, the matter is remitted back to the TPO for decision – Decided partly in favour of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are different from the filters applied by the TPO for the A.Y. 2005-06. Therefore, it was pointed out that the ratio laid down by the Tribunal in the order for the A.Y. 2004-05 is not applicable for A.Y. 2005-06. 5. The applicant prayed in MA No. 46 that the Tribunal may adjudicate ground Nos. 1.2 and 1.3 by way of passing modification order. The MA was heard and order of Tribunal recalled. The recalled order has been heard by the Bench in ITA No. 988/Hyd/2011 on 10.11.2014 which is being adjudicated by this order. 6. Facts of the case are that on reference from the AO the TP order u/s. 92CA(3) of Income-tax Act, 1961 was passed on 30.09.2008. The TPO arrived at the PLI of the assessee at 0.08% and identified 9 comparables with arithm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the TPO-II held that the companies sought to be eliminated by the assessee are retained. 8. Following the order of the ITAT the revised PLI of the assessee after making necessary adjustments toward rent works out to 7.64% is as under: Description Amount (Rs.) Operating Revenue 148897637 Operating Cost* (148779413-10452000) 138327413 Operating Profit 10570224 Operating profit to Cost Ratio 7.64 * As directed by the ITAT, ₹ 1,04,52,000 paid as excess rent by the assessee is adjusted. 9. The TPO-II worked out the average P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd. 2.81 5. Maple Esolutions Ltd. 28.75 6. Nucleus Net Soft GIS India Ltd. 40.06 7. Ace Software Exports Ltd. 14.50 11. The learned counsel submitted that out of the above comparables item No. 3 i.e., Tulsyan Technologies Ltd., was not considered as comparable for the reason that it was noticed from the annual accounts that the company outsourced a considerable portion of the business. The learned counsel relied on the decision in the case of ACIT vs. Maersk Global Service Centre India Pvt. Ltd. (133 ITD 543) wherein the Mumbai Bench of this Tribunal held that this company (Tulsyan Technologies Ltd.) outsou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is apparent from two orders passed one by the Delhi Bench and the other by the Hyderabad Bench of the Tribunal that the case of Maple eSolutions Limited has been directed to be excluded from the list of comparables. As the assessment year under consideration is 2006-2007 and the Delhi Bench of the Tribunal has also considered the same assessment year while directing the exclusion of the case of Maple e Solutions Limited from the list of comparables, we are unable to accept the contention of the ld. DR in this regard. It is more so because no contrary view has been brought by the ld. DR to our notice. Respectfully following the precedents, we direct the exclusion of this case from the final list of comparables. Since the DRP in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that as against ₹ 24.02 lakhs of employee costs for the year ending 31st March, 2005, the employee cost has increased to ₹ 132.59 lakhs. Further, the data processing charges is also to the extent of ₹ 1.04 crores, which indicates that the assessee is outsourcing the work. Accordingly, it cannot be selected as a comparable. Due to amalgamation during the year, the assessee's business model has changed and because of employee cost filter also, this comparable has to be excluded. 17. We have gone through the objections filed by the assessee for taking Nucleus Net Soft GIS (India) Ltd., as comparable. We find from the annual report placed on record, as against ₹ 24.02 lakhs of employee cost for the year en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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