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TMI Blog2016 (1) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... ational Systems Inc. ('RISL'), USA. Further, RISL is a 100% subsidiary of Fiserv Inc. USA ('FI'). During the relevant AY, FIPL provided software development and maintenance services to its associate enterprises ('AEs'), namely, Fiserv Global Services Inc., USA ('FGSI'), for which it was compensated in terms of the Master Service Agreement ('MSA') entered into between FIPL and FGSI on cost plus 15%. In its Transfer Pricing ('TP') document furnished for the AY in question, FIPL disclosed certain international transactions with its AEs. This included transactions involving the payment towards software development services for the value of Rs. 204,03,31,108. The arm's length price ('ALP') was determined by FIPL by applying transactional net ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h February 2014 assessing the total income of the FIPL after making a transfer pricing addition of Rs. 19,04,65,871. 5. Before the ITAT, the Assessee confined its grievance to the exclusion of 6 comparables from the final set of comparables selected by the DRP. The ITAT held that since the Assessee was engaged in software development services and one of the comparables viz., Bodhtree Consulting Limited, was engaged in software development programmes, the said comparable was directed to be excluded. As far as another comparable viz., Infosys Limited, it was held that since the Assessee was captive service provider to its AE, Infosys Ltd. was not a valid comparable. 6. As regards M/s. Thirdware Solutions, the ITAT took note of the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, the Revenue has projected the following questions for consideration by the Court: (i) Whether the ITAT was right in rejecting the comparables, as noted above, and whether the application of stringent standards of comparability will defeat the purpose of flexibility provided in the comparability analysis for determining ALP? (ii) Whether the ITAT was right in foreign exchange fluctuation as operating expenses/income without considering that it has no bearing on the transaction and that Safe Harbour Rules stipulate exclusion of foreign exchange gain/loss as operating expenses/income? 10. As regards question (ii) it is pointed out by learned counsel for the Assessee that the Safe Harbour Notification dated 18th September 2013 relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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