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TMI Blog2016 (3) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, directed against an assessment done by the AO on 30.12.2014, pursuant to directions of the DRP u/s.144C of the Income-tax Act, 1961 ( the Act in short), it has altogether raised 14 grounds. 02. Ld. Counsel for the Assessee submitted that if his grievances with regard to rejection of certain comparables considered by the TPO, appearing as a part of its ground no.6 is considered, other grounds need not be adjudicated now. Accordingly we are confining ourselves to ground raised by assessee with regard to certain comparables considered by the TPO on which it is aggrieved. 03. Ld. AR submitted that assessee was a 100% export-oriented unit ( EOU in short) and providing ITE services to its holding company in British Virgin Islands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AVERAGE 26.86% 04. Ld. AR submitted that TPO had allowed working capital adjustment of 0.23% and a final adjustment of ₹ 54,46,46,045/-, as given hereunder was recommended : Arm's Length Mean Margin on cost 26.86% Less: Working Capital Adjustment (Annex. C) 0.23% Adjusted margin 26.63% Operating Cost 462,226,533 Arm's Length Price (ALP) 126.63% of Operating cost 585,317,459 Price Received 530,671,414 Shortfall being adjustment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re a copy of the decision in Novo Nordisk India (supra), was placed, Ld. AR submitted that Accentia Technologies Ltd, was directed to be excluded from the list of comparables in the ITES segment, in the said case. 07. Per contra, Ld. DR submitted that a change in the list of comparables would completely affect the matrix of the study under TNMM and therefore lower authorities should be given a free hand to make a fresh search. 08. We have perused the orders and heard the rival contentions. No doubt Accentia Technologies Ltd, formed a part of the list of comparables considered by the assessee in its TP study. However assessee had objected to its inclusion citing functional dissimilarity before the AO as well as the DRP. Question regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also perused the relevant material on record including the various decisions of the coordinate benches of the Tribunal cited by the learned counsel for the assessee. Accentia Technologies Limited 12. As regards the selection of Accentia Technologies Limited as comparable, the learned counsel for the assessee has relied on the decisions of this Tribunal in the cases of Capital IQ Information Systems (India) Pvt. Ltd. V/s. Addl./Dy. Commissioner of Income tax, Circle 1(2), Hyderabad and vice versa (ITA No.124 and 170/Hyd/2014 dated 31.7.2014); Excellence Data Research Pvt. Ltd., Hyderabad V/s. ITO Ward 2(1), Hyderabad (ITA No.159/Hyd/2014 dated 31.7.2014); and Hyundai Motors India Engineering P. Ltd., Hyderabad V/s. DCIT, Circle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessee, there was acquisition of a company by M/s. Accentia Technologies Limited during the relevant year, and the said company, therefore, cannot be considered as comparable due to this extraordinary event which occurred in the relevant year as rightly held by the Tribunal inter alia in the case of Excellence Data Research P. Ltd. (supra). Although the learned Departmental Representative has sought to contend that the acquisition of a company by M/s. Accentia Technologies Ltd. took place at the fag end of the year under consideration, the learned counsel for the assessee has pointed out that the process of acquisition had started on 15.5.2008 itself, i.e. in the earlier part of the year under consideration. We, therefore, follow t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited with Accentia Technology Ltd., and consequent thereto the assets and liabilities and accumulated reserves and the financial results for the year ended 31st March, 2010, of the amalgamating company were incorporated in the amgalamated company. As far as Infosys BPO Ltd., is concerned, the observations made by the Tribunal in the decision referred in the earlier paragraph will hold good for the present AY 2010-11 also. Respectfully following the decision of the Tribunal referred to above, we direct that the aforesaid 2 companies be excluded from the list of comparable companies for the purpose of computing arithmetic mean for comparability purpose. The TPO is directed to give effect accordingly. Even after exclusion of Accentia Tec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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