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TMI Blog2016 (8) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... tative and qualitative filters applied by the Appellant (without providing any cogent reasons) and applying certain additional filters, which are arbitrary in nature, for the purposes of determining the ALP. 4. The learned AOITPO and the Hon'ble DRP have erred, in law and in facts, by not providing the detailed search process (i.e. accept/reject matrix and the reason of rejections of the companies rejected qualitatively) of the fresh search conducted, thus resorted to cherry picking of the comparables. 5. The learned AOITPO and the Hon'ble DRP have erred, in law and on facts, by selecting the following companies viz, (1) Fortune Infotech limited (2) Nittany Outsourcing Services Private Limited as functionally comparable to the Appellant based on their own conjectures and surmises. 6. The learned AO/TPO and the Hon'ble DRP have erred, in law and on facts, by rejecting R Systems Limited as comparable to the Appellant on the ground that the company follows a different accounting year, without appreciating the submissions made by the Appellant that application of a different accounting year filter is inappropriate. 7. The learned AO/TPO and the Hon'ble DRP have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich he passed u/s.143(3) r.w.s.144C of the Act. Aggrieved by the aforesaid order, the assessee has raised objections in an application filed in form 35A before the DRP, Chennai. 3.1 The assessee is a 100% subsidiary company of Data Entry International Private Limited. The assessee company is engaged in the business of information technology enabled services to the group companies. While making the TP adjustment so as to make determine the ALP, the TPO considered the following comparables: i) Cosmic Global Limited ii) Informed Technologies India Limited iii) Fortune Infotech Limited iv) Jeevan Scientific Technology Ltd.(Segmental) v) e4e Healthcare Business Services Ltd. 3.2 However, when the assessee carried the matter before the DRP, the DRP considered the following comparables: i) Cosmic Global Limited ii) Fortune Infotech Limited iii) Jeevan Scientific Technology Ltd.(Segmental) iv) e4e Healthcare Business Services Ltd.(formerly known as Nittany outsourcing services private limited) 4. Now, the assessee wants to include or exclude the following comparables: i) R Systems International Ltd., ii) Microgenetics Systems Ltd. According to the ld. AR, R Systems Internati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TP study prepared by the assessee. According to the ld. AR, now, the data is available in public domain and it may be considered. 8. On the other hand, the ld. DR submitted that this did not form part of the assessee's choice of comparables before the TPO. The search process initiated by the TPO also did not result in these two comparables and therefore, they were not considered. 9. We have heard both the parties and perused the material on record. It is brought to our notice that that financials for the year ended March 2010 relating to this company was uploaded in the MCA portal on 15th December, 2011 and the assessee is in a position to place necessary financials of this company before the TPO. Accordingly, this issue is remitted to the file of the TPO for consideration and decide thereupon if it is functionally comparable to the asessee's case and turnover of that company is commensurated with the assessee company. 10. CG-VAK Software & Exports Ltd. : This company was not considered as comparable on the reason that the turnover is less than Rs. One crore and failed to satisfy this filter. 11. We have heard both the parties. Admittedly the turnover of CG-VAK Software & Expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the list of comparables and the same decision was taken by the Delhi Bench in the case of Equant Solutions India Pvt. Ltd. in ITA No.1202/Del/2015 dated 21.1.2016. In view of this, we direct the TPO to exclude Fortune Infotech Limited from the list of comparable companies. 15. Regarding e4e Healthcare Business Services Ltd., the ld. AR, submitted that the financial statement shows that the company has software development centres and therefore, should be rejected as comparables. He placed reliance on the order of the Tribunal in the case of Bechtel India P. Ltd. in ITA No.1478/Del/2015 dated 21.12.2015 to support his case. 16. On the other hand, the ld. DR relied on the orders of the lower authorities. 17. We have heard both the sides and perused the material on record. This company was not functionally comparable to the assesse's case and this company is in health care outsourcing services and in addition, it also renders software development services and it is the fact that segmental information was not available. The company was also a 100% EOU, under STPI guidelines. Hence, we are inclined to accept the contention of the ld. AR that this company should be excluded from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Industries (Development & Regulation) Act, 1951 and rules made thereunder. In this case, assessee is a unit recognized by the STPI. It was not placed on record to suggest that unit was approved by the Board appointed by the Central Government under section 14 of Industries (Development and Regulation) Act, 1951, therefore assessee is not eligible for 10B deduction. However, if the assessee is not entitled for deduction under section 10B, the claim made by the assessee under section 10A of the Act should be considered by the lower authorities. 7. The Hon'ble Madras High Court in the case of CIT Vs.Heartland KG Information (supra) held as under:- "Held, dismissing the appeal, (i) that the transfer was not that of plant and machinery alone but of sale of the whole business unit of the transferor company which was primarily only to the export of articles or things. Even though the assessee originally claimed relief under section 10B, it was cautious enough to make an alternative plea under section 10A in view of the fact that the assessee's vendor had the benefit under section l0A. It was not denied by the Revenue that the assessee had the whole business transferred to its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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