9911796707
TMI Blog2015 (4) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... DR that the difference in the revenues earned by the assessee vis-a-vis Infosys Technologies Limited was not of such a magnitude as was in the case of Agnity India Technologies (P.) Ltd. (2013 (7) TMI 696 - DELHI HIGH COURT), does not advance the case of the Revenue. Mphasis BFL Limited learned AR submitted that it is engaged in diversified IT services segment offering business process operations, application development and maintenance etc. as against the assessee being a contract software development services. Certain other points were also highlighted to justify the exclusion of this case. On a pointed query from the Bench, the learned AR agreed that such points of difference have not been considered by the authorities below. Remit the matter to the file of the TPO for computing the ALP of the international transactions afresh in the light of our above discussion - Appeal decided in favour of assessee for statistical purposes. - ITA No.5024/Del/2010 - - - Dated:- 23-4-2014 - R.S. SYAL AND RAJPAL YADAV, JJ. For the Appellant : Rohit Tiwari and Ms. Anisha Relan. For the Respondent : Peeyush Jain and Y.K. Verma. ORDER R.S. Syal, Accountant Member - This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On the basis of the DRP's direction, the Assessing Officer passed final order making addition on account of transfer pricing adjustment amounting to ₹ 24,23,12,445/-. The assessee is aggrieved against the inclusion of Infosys Technologies Limited and Mphasis BFL Limited. 4. We have heard the rival submissions and perused the relevant material on record. At the outset it is relevant to note that the area of dispute in the present appeal is confined to inclusion or exclusion of these two cases. The assessee is satisfied on all other issues. It is relevant to note that the assessee suo motu included these two cases in its Transfer pricing study. However, it was argued before the authorities below that these cases were not comparables. The Special Bench of the Tribunal in Dy. CIT v. Quark Systems (P.) Ltd. [2010] 38 SOT 307 (Chd.)(SB) has held that if the assessee has wrongly included some cases in the list of comparables, which position has not been disturbed by the TPO, then there can be no embargo on pleading by the assessee for the exclusion of such a case. In the light of the above Special Bench decision, we hold that the assessee can contend for the exclusion of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Expenditure on Advertising/sales promotion and brand building Rs.499 Crores (Please refer pg 60 of the Paper Book) Nominal expense of ₹ 2.7 lakhs is incurred by the appellant (Pg 75 of the Paperbook) Expenditure on Research Development Rs.102 Crores (Please refer pg 36 of the Paper Book) Rs. Nil Onsite Vs. Offshore - As much as half of the software development services rendered by Infosys are onsite (i.e. services performed at the customer's location overseas) Revenue split - Onsite (49.8%) and offshore (50.2%). - Typically, onsite services command higher billable rates and consequently it would not be appropriate to compare the appellant which earns more than half of its income from onsite services. (Please refer pg 48of the Annual Report) 100% Offshore (remotely from India) 6. The learned DR opposed the contention raised on behalf of the assessee by stating that the difference in the revenues earned by the assessee and Infosys Technologies Limited was not so vast as in the case of Agnity India Technologies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. The above facts clearly indicate that prima facie the case of Infosys Technologies Limited does not appear to be comparable with that of the assessee. The contention of the learned DR that the difference in the revenues earned by the assessee vis-a-vis Infosys Technologies Limited was not of such a magnitude as was in the case of Agnity India Technologies (P.) Ltd. (supra), does not advance the case of the Revenue. The reason is that the case of Infosys Technologies Limited has been held to be excludible not only on the strength of difference in the revenue of two companies but also on several other factors as have been tabulated in the judgment by Hon'ble Delhi High Court. It is noticed that the assessee took up such objections before the authorities below also and argued for the exclusion of such case. It can be seen from the orders passed by them that the assessee's objections in this regard have not been appropriately dealt with. Though we hold in principle that the judgment of the Hon'ble Delhi High Court in Agnity India Technologies (P.) Ltd.'s case (supra) appears to be prima facie applicable, we equally appreciate the contention of the ld. DR that the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
