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TMI Blog2016 (12) TMI 1745X X X X Extracts X X X X X X X X Extracts X X X X ..... arketing services. The assessee company e-filed its Return of Income for the A.Y. 2009-10 on 15.03.2011 declaring a total income of ₹ 2,40,41,041/-. The Return of Income filed was processed u/s. 143(1) of the I.T. Act on 31.3.2011. 3. The case was selected for scrutiny manually, as the assessee's international transaction entered with its Associated Enterprises during the year was more than ₹ 15 crores. Notices u/s. 143(2) was issued on 28.9.2010 and served on the assessee. Subsequently, notice u/s. 142(1) was issued. 4. As the Arm Length Price declared by the assessee company was more than ₹ 15 crores, the case was referred to the DCIT (Transfer Pricing)-V, Bangalore to determine the correctness of Arm Length Price declared by assessee with the prior approval of the Commissioner of Income-tax, Bangalore-III, Bangalore. The Transfer Pricing Officer vide order u/s. 92CA of the Act dated 16.1.2013 has determined at an adjustment of ₹ 2,04,50,189/- to the Arms Length Price declared by the assessee. 5. Accordingly, a draft assessment order was passed on 15.3.2013 u/s. 143(3) r.w.s. 144C of the Act proposing to make addition of ₹ 2,04,50,189/- on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '. 5 Grounds on comparables and rejection of TP analysis of the appellant 5.1 The learned TPO erred in rejecting the comparables selected by the appellant on unjustifiable grounds and Hon'ble DRP erred in upholding the same. 5.2 The learned TPO erred in rejecting the transfer pricing analysis undertaken by the appellant on unjustifiable grounds and Hon'ble DRP erred in upholding the same. 5.3 The learned TPO erred in rejecting the TP documentation maintained by the appellant as per the Rules and erred on facts treating the filters applied by the appellant as defective. 6. Grounds relating to TP analysis of the TPO 6.1 The learned TPO has erred in doing a fresh transfer pricing analysis despite the absence of any defects in the transfer pricing analysis submitted by the appellant and Hon'ble DRP has erred in upholding the same. 6.2 The learned TPO erred on facts by not appreciating that on or before the due date of filing return, the relevant financial year data of comparable companies was not available in public domain and by undertaking a fresh search for comparability analysis (FY 2008-09) after September 30, 2009, which is beyond the date of complia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd 9.97 5 Tata Elxi Ltd (Seg.) 20.28 6 Sasken Communication Technologies Limited (Seg.) 27.91 7 Persistent Systems Ltd 41.4 8 Zylog Systems Ltd 7.81 9 Mindtree Ltd (Seg) 5.52 10 Larsen & Toubro Infotech 24.72 11 Infosys Limited 45.61 Average 24.32 8. Comparables sought to be excluded are as follows: S. No Name of Company Turnover One-tenth Turnover of Appellant Ten times the Turnover of Appellant Reasons for Seeking exclusion Decision relied upon 1 Tata Elxi Ltd (Seg). 3,78,43,000 2,12,19,774 2,12,19,77,370 High turnover M/s. Mcafee Software (India) Pvt. Ltd. v. DIT 2 Sasken Communication Technologies Limited 4,05,31,20,000 2,12,19,774 2,12,19,77,370 High turnover M/s. Mcafee Software (India) Pvt. Ltd. v. DIT 3 Persistent Systems Ltd 5,19,69,10,000 2,12,19,774 2,12,19,77,370 High turnover M/s. Mcafee Software (India) Pvt. Ltd. v. DIT 4 Zylog Systems Ltd 7,34,93,51,475 2,12,19,774 2,12,19,77,370 High turnover M/s. Mcafee Software (India) Pvt. Ltd. v. DIT 5 Mindtree Ltd (Seg). 7,93,22,79,326 2,12,19,774 2,12,19,77,370 High turnover M/s. Mcafee Software (India) Pvt. Ltd. v. DIT 6 Larsen & Toubro Infotech 19,50,83, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid decisions, the tribunal has taken the view that Bodhtree Consulting Ltd. Is in the business of software products and was engaged in providing open & end to end web solutions software consultancy and design & development of software using latest technology. The decision rendered by the Mumbai Bench of the Tribunal in the case of Nethawk Network Pvt. Ltd. (supra) is in relation to A.Y. 2008-09. It was affirmed by the learned counsel for the Assessee that the facts and circumstances in the present year also remains identical to the facts and circumstances as it prevailed in AY 08-09 IT(TP)A No. 271/Bang/2014 Page 18 of 61 as far as this comparable company is concerned. Following the aforesaid decision of the Mumbai Bench of the tribunal, we hold that Bodhtree Consulting Ltd. cannot be regarded as a comparable. In this regards, the fact that the assessee had itself proposed this company as comparable, in our opinion, should not be the basis on which the said company should be retained as a comparable, when factually it is shown that the said company is a software product company and not a software development services company." (Emphasis Supplied) Similar view has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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