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TMI Blog2018 (6) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... o end mobile solutions as infrastructure services etc. and hence functionally dissimilar with that of assessee. Their is huge turnover difference between M/s. Infosys BPO Ltd. and the assessee, and hence being dissimilar cannot be treated as comparable. M/s. Cosmic Global Ltd. was also excluded from the list of comparable to determine the ALP since had a business model of subcontracting its work to others while providing services - while the business model of the Assessee was an inhouse business model - thus the appeal of revenue is dismissed. - Income Tax Appeal No. 57 of 2016 - - - Dated:- 12-6-2018 - M. S. Sanklecha And Sandeep K. Shinde, JJ. Mr. Suresh Kumar, for the Appellant Mr. Madhur Agrawal i/b. A. K. Jasani, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Associated Enterprises (AE) abroad. The Arms Length Price (ALP) of the RespondentAssesseee's transaction with its AE was arrived at by using the Transactional Net Margin Method (TNMM) as a most appropriate method to determine the same. 4 Revenue's grievance is essentially with the impugned order of the Tribunal excluding certain companies from the list of comparables to determine the ALP through the TNM Method. 5 Re Question (a): (i) M/s. Kals Information System Ltd., is engaged in developing Software Products, development of software services and also engaged in running a training centre for software professional on online projects. The Respondent-Assessee is engaged in the activities of providing software solution i.e. s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t give rise to any substantial question of law. Thus, not entertained. 6 Re Question (b): (i) M/s. Transworld Infotech Ltd., was excluded from the list of comparable by the impugned order of the Tribunal. This, as the data of the comparable was for a financial year, that did not correspond to the financial year of the Respondent-Assessee's transaction with its AE's . This was by relying upon Section 10(B) (4) of the Income Tax Rules, 1962. Further, the Tribunal also noted that the TPO included M/s. Transworld Infotech Ltd., as comparable without in any manner showing the same to be a comparable when the data available of the comparable is in respect of a financial year different from the financial year of the tested party to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilarity. (iii) We find that the Tribunal found on fact that, the software development services are completely different from that provided by the Assessee. Further, the impugned order also notes the fact that the customer profile of M/s. Compucom Software Ltd., is completely different inasmuch as it dealt with Government bodies as against, Respondent dealing only with its AE. The Tribunal also notes the fact that the above functional differences were pointed out before the lower authorities but the same was not dealt with by them. In the circumstances, the Tribunal took the view that M/s. Compucom Software Ltd., was not a comparable. (iv) We note that on above facts, the view taken by the Tribunal that M/s. Compucom Software Ltd., i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court in CIT v/s. Pentair Water India (P) Ltd., 381 ITR 216 has taken a view that huge difference in turnover between the tested party and the comparable would necessarily require the proposed comparable to be excluded from the list of comparables. (iv) We find that the view taken on the aforesaid finding of fact is a possible view. (v) Therefore, the question No.(b) as proposed does not give rise to any substantial question of law. Thus, not entertained. 9 Re Question (e): (i) By the impugned order of the Tribunal, M/s. Cosmic Global Ltd., was also excluded from the list of comparable to determine the ALP of the Respondent-Assessee's transaction with its AE. The impugned order of the Tribunal noted the fact that M/s. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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