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TMI Blog2015 (6) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... gement ERP applications etc. It’s functional profile is quite different from the assessee company, which is purely providing software services in the field of 3D animation. Thus, it cannot be held to be a comparable company for the purpose of bench marking the assessee’s margin or caring out any comparability analysis. The ITAT Pune Bench in the case of PTC Software (I) Pvt. Ltd. [2015 (1) TMI 466 - ITAT PUNE], has held that the Kals, which is engaged in the sale of software products cannot be held to be a comparable case with the companies providing software services. Similarly, in view of series of other decisions of the Tribunal as noted by the DRP, Kals cannot be held to be comparable company for bench marking with the companies prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount (Rs.) AY 2008-09 Method used OP/TC 1 Provision of 3D animation content 731,504,989 TNMM 14.49% In the TP study report, the assessee has benched mark its margin on the basis of following comparables:- Sr. No. Name of the company Company Average 1 Silverline Animation Ltd. 8.48% 2 Crest Animation Studios Ltd. -13.51% 3 DQ Entertainment Ltd.(Seg) 27.89% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. 4.30 9 Persistent Systems Ltd. 16.18 10 Sasken Communication Technologies Ltd. 15.99 11 Tata Elxsi Ltd. 20.29 12 Thirdware Solutions Ltd. 22.37 13 Wipro Ltd. (Seg) 26.64 14 Silverline animation 8.48 15 DQ entertainment (Seg) 27.89 16 Laser Infomedia 17.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mparables will come to 19.64%, which will fall within +/- 5% range. In support of the contention that the said company cannot be included as comparables, various Tribunal decisions were relied upon, the list of such decisions has incorporated by the DRP in para 6.1 page 13 of the order. 5. The Ld. DRP after examining the functional profile of Kals Information System Ltd. and also considering the decision of ITAT in the case of Triology E-business, held that the said company cannot be taken as a comparable company and therefore, same should be excluded from the list of final comparables. The relevant finding and observation of the DRP are as under:- We have carefully considered the list of software service company included by the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself as being engaged in computer software industry. The Kals Information System Ltd. is also engaged in software development and products and hence, it is functionally similar to the assessee s profile therefore, it has rightly been included as comparable for bench marking the assessee s margin. 7. On the other hand learned counsel for the assessee, Ms. Karishma R. Phatarphekar, submitted that exclusion of Kals Information System Ltd. from other software companies due to its functional peculiarity which is purely development of software products, has been upheld by various decisions of the Tribunal as noted by the DRP. Further in the case of PTC Software (India) Pvt. Ltd., ITAT Pune Bench has held that it cannot be taken as a comparab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld to be a comparable case with the companies providing software services. Similarly, in view of series of other decisions of the Tribunal as noted by the DRP, Kals cannot be held to be comparable company for bench marking with the companies providing software services. Thus, the order of the DRP as noted above is upheld. Accordingly, the ground raised by the Revenue is dismissed. C.O. No. 101/Mum/2014 for Assessment Year: 2009-10 9. In the Cross Objection the assessee has raised following ground:- On the facts and in the circumstances of the case and in law, the learned Additional Commissioner of Income Tax, Transfer Pricing II-(2), ( TPO ) and the learned Income Tax Officer 7(1)(4) ( AO ) under directions issued by the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X
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