9911796707
TMI Blog2018 (7) TMI 1903X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order passed by Deputy Commissioner of Income Tax, Circle - 24(2) (erstwhile Circle 9(1 )), New Delhi ("the AO") pursuant to the directions of the Hon'ble Dispute Resolution Panel - III ("the DRP"), are bad in law and void ad-initio. 2. The AO has erred in law and on the facts of the case in determining the total income of the Appellant at Rs. 479,668,511 as against returned income of Rs. 197,866,765 and thereby made an upward adjustment of Rs. 281 ,801 ,746. Part I - Transfer Pricing Grounds 3. That on facts of the case and in law, the DRPI TPO/AO have erred in not demonstrating that the motive of the Appellant was to shift profits outside of India by manipulating the prices charged in its international transactions as envisaged under provisions of Chapter X of the Act. 4. That on facts of the case and in law, the DRPI TPO/AO have erred in rejecting certain companies and adding certain companies to the final set of alleged comparable companies on an ad-hoc basis, thereby resorting to cherry picking of comparable companies for benchmarking the international transaction pertaining to IC design and software development services ("impugned transaction") 5. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the 5 percent range as the Appellant has the right to exercise this option under the second proviso to section 92C(2) of the Act. 14. That on facts of the case and in law, the DRP/TPO/AO have erred in using single year data for financial year ("FY") 2009-10 of alleged comparable companies without considering the fact that the same was not available to the Appellant at the time of complying with the transfer pricing documentation requirements and disregarding the Appellant's claim for use of multiple year data for computing the arm's length price. 15. That on facts and in law, the DRP/AO has erred in confirming that TPO has discharged his statutory onus by establishing that the conditions specified in clause (a) to (d) of Section 92C (3) of the Act have been satisfied before disregarding the arm's length price determined by the Appellant and proceeding to determine the arm's length price. Part II - Corporate Tax Grounds 16. That the DRP and learned AO has erred on facts and in law in treating the software expenses amounting to Rs. 1,227,686 as capital in nature. 17. Without prejudice to the above and assuming without accepting the above revenue expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Transaction and computation of Arm's length price in relation to software development services. 2. Whether the decision of the Hon'ble DRP to exclude M/s. Infosys Technologies Ltd. is unsustainable in law, being cryptic and having been given without any cogent reasons in the face of detailed analysis given by the TPO for selecting the company as a comparable in benchmarking the international transaction. 3. Whether the Hon'ble DRP has erred in summarily holding that M/s.Infosys Technologies Ltd. is not a proper comparable ignoring the TPO's detailed analysis of the company on all the relevant parameters in support of his finding as to how M/s. Infosys Technologies Ltd. qualifies as a comparable for benchmarking the translation. 4. Whether the Hon'ble DRP has erred in mechanically and selectively relying upon the decision in the case of M/s. Agnity India Technologies Pvt. Ltd. without appreciating that the decision in the said case turned on the specific fact-situation involved therein as the Hon'ble ITAT had rendered an uncontroverted finding regarding the difference in the functional & risk profiles between the assessee and M/s. Infosys Tech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances like persistent losses, declining sales, extra ordinary income or expenses, mergers and acquisition. By applying the aforesaid filters, Transfer Pricing Officer (TPO) rejected 7 comparables chosen by the taxpayer and has selected 20 comparables having average OP/OC of 27.88% and working capital adjusted OP/OC at 22.47% for benchmarking the international transactions, detailed as under :- S.No. Company Name OP/OC (%) Working Capital adjusted OP/OC (%) i. Akshav Software Technologies Ltd. -1.04 -3.77 ii. E-Infochips Bangalore Ltd. 72.69 62.79 iii. Evoke Technologies Pvt Ltd 19.02 16.32 iv. E-Zest Solutions Ltd. 18.66 11.46 v. Infinite Data Systems Pvt. Ltd. 88.25 81.39 vi. Infosys Ltd. 45.08 43.05 vii. Larsen & Toubro Infotech Ltd. 20.48 17.63 viii. LGS Global Ltd. 12.79 5.11 ix. Mindtree Ltd. 16.62 12.14 x. Persistent Systems Ltd. 30.50 25.50 xi. R S Software (India) Ltd. 10.29 7.82 xii. Sasken Communication 17.54 15.51 xiii. Tata Elxsi Ltd. 19.82 14.68 xiv. Thinksoft Global Services Ltd. 17.35 11.27 xv. Thirdware Solutions Ltd 41.63 35.70 xvi. CAT Technologies 11.48 1.29 xvii. Maveric Systems L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn, its maintenance, verification and software development. So, for the purpose of benchmarking the international transactions, the assessee is to be treated as a contract captive design centre. 10. TPO has accepted TNMM as Most Appropriate Method (MAM) with OP/OC as PLI adopted by the assessee for TP analysis. The major dispute raised by assessee is inclusion of certain companies in the final set of comparables which are functionally dissimilar; treating the foreign exchange gain and provisions/liability as non-operating in nature; treating amortization of goodwill as operating expenses. To arrive at the logical conclusion qua TP adjustment made by the TPO/DRP/AO, we would discuss grounds no.6, 7 and 12 first. TAXPAYER'S APPEAL (ITA No.609/Del./2015) GROUNDS NO.1, 2 & 3 11. Grounds No.1, 2 & 3 are general in nature, hence do not require any specific adjudication. GROUND NO.6 12. It is the case of the assessee that foreign exchange and provision of doubtful debts are operating items for the purpose of computing the operating margin of the assessee as well as comparables. However, ld. TPO rejected the arguments raised by the assessee and treated the foreign exchange gain an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature in calculating the operating margin of the assessee as well as final comparable companies. So, ground no.6 is determined in favour of the assessee." 14. So, by following the decisions rendered by the coordinate Bench of the Tribunal, we direct the ld. TPO to treat foreign exchange gain/loss and provision of doubtful debt as operating in nature in calculating the operating margin of the assessee as well as final comparable companies. So, ground no.6 is determined in favour of the assessee. GROUND NO.7 15. Assessee has challenged the findings returned by TPO/DRP treating amortization of goodwill as not extra ordinary in nature. It is the case of the assessee that goodwill is on account of acquisition of units through slump sale under Business Transfer Agreement and in these circumstances, amortization of goodwill is an extra ordinary item and is not pertaining to the regular operation of the taxpayer, hence non-operating in nature. 16. Ld. AR for the assessee contended that ld. DRP in assessee's own case in AYs 2011-12 and 2012-13 and ld. TPO in AY 2013-14 has already amortized goodwill as extra ordinary in nature by excluding the same by computing operating margin of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjustment. It is settled principle of law that claim cannot be rejected merely on the ground that it cannot be quantified. 20. Coordinate Bench of the Tribunal in case cited as Hyundai Rotem Company vs. ACIT (supra) decided the issue in favour of the assessee by returning following findings :- "18. Ld. DRP for the Revenue contended that the risk has to be explained in case of each comparable and economic analysis cannot be the basis for risk adjustment in the absence of complete data provided by the taxpayer. However, the ld. AR for the taxpayer contended that the risk adjustment is required to be given on each comparable as has been held by the coordinate Bench 'A', Pune Bench of the Tribunal in case of Honeywell Turbo Technologies (India) Pvt. Ltd. vs. DCIT in ITA No.2584/PUN/2012 order dated 10.02.2017 by following the case of Sony India Pvt. Ltd. cited as 114 ITD 448 by making following observation:- "33. Further, the Delhi Bench of Tribunal in the case of Sony India Pvt. Ltd. reported in 114 ITD 448 has allowed 20% risk adjustment considering the fact that it may not be possible to quantify risk adjustments. The assessee applying the said ratio in the case of Sony ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. So, ground no.12 is determined in favour of the assessee for statistical purposes. GROUND NO.11, 13, 14 & 15 22. Grounds No.11, 13, 14 & 15 are dismissed having not been pressed during the course of arguments. GROUNDS NO.4, 5, 9 & 10 23. TPO has accepted the TNMM as most appropriate method with OP/OC as the PLI adopted by the taxpayer. The taxpayer in order to benchmark the international transactions sought exclusion of 9 comparables chosen by TPO/DRP viz. (i) E-Infochips Bangalore Ltd., (ii) Infinite Data Systems Pvt. Ltd., (iii) Wipro Technology Services Ltd., (iv) Larsen & Toubro Infotech Ltd., (v) Mindtree Ltd., (vi) Tata Elxsi Ltd., (vii) Thirdware Solutions Ltd., (viii) Persistent Systems Ltd. and (ix) E-Zest Solutions Ltd. The taxpayer also sought inclusion of 4 comparables excluded by TPO/DRP viz. (i) R System International Ltd., (ii) Caliber Point Business Solutions Ltd. (Seg), (iii) SIP Technologies & Exports Ltd. and (iv) CG-Vak Software & Exports Ltd.. First of all, we would examine the comparables sought to be excluded by the taxpayer one by one as under. COMPARABLES SOUGHT TO BE EXCLUDED BY THE TAXPAYER E-INFOCHIP BANGALORE LTD. (E-INFOCHIP) 24. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable, the same cannot be a valid comparable vis-à-vis the taxpayer which is a routine software development service provider, hence we order to exclude E-Infochip from the final set of comparables. INFINITE DATA SYSTEMS PRIVATE LTD. (INFINITE) 29. The taxpayer sought to exclude Infinite on three grounds inter alia it provides services to Fujitsu Services Ltd. (Fujitsu), UK under contract with the holding company; that it earns revenue from Fujitsu Services Ltd. under Build, Operate and Transfer (BOT) model and Infinite has provided services to Fujitsu under contract between Infinite and Fujitsu Services Ltd., UK and the said contract is not available in the public domain. Ld. DR filed comprehensive written submissions opposing the exclusion of Infinite. 30. It is not in dispute that Infinite is a 100% subsidiary of Infinite Computer Solutions (India) Limited (ICS) which had signed agreement with Fujitsu Services Ltd., a company incorporated in UK to set up Global Delivery Center in India in order to render service to Fujitsu Services Ltd. and its associate with effect from January 1, 2009 on BOT model, as is evident form Director's report, available in the annual repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prising of technical consulting, design and development of software, maintenance, system integration, implementation, testing and infrastructure management services. We find from the paper book that the revenue is primarily derived from technical support and infrastructure management services. We find that Infinite Data Systems Pvt Ltd commenced its operations on 1st January 2009 and as per segment reporting disclosure, the company's operations predominantly relate to providing software technical consultancy services to its sole customer Fujitsu Services Limited. Further, as per the Annual Report of 2009, at Page l, it is stated that the Holding Company M/s Infinite Computer Solutions (India) Limited signed an agreement (Build, Operate and Transfer - BOT Model) with Fujitsu Services Limited to set up Global Delivery Centers in India to provide offshore delivery capabilities to Fujitsu & Fujitsu's associated companies. We find that these facts have also been acknowledged by the ld TPO at page 77 of his order. The ld. AR stated that it would be worthwhile to note that Infinite Data Systems Pvt Ltd completed its three years contract with Fujitsu, post which, the business was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the same at para 9.1 and 9.3 of its order. Therefore, the decision of the Tribunal in the said case is applicable to the case on hand, more particularly since the comparables adopted by the TPO in the said case are the same ill the assessee's case also. In the case of Hyundai Motors India Engg. (P.) Ltd. (supra) at Page 20, para 18, the Tribunal has held as under: "18. As regards M/s. Accentia Technologies Ltd., is concerned, we find that the DRP has directed to exclude this company by placing reliance upon the order of the ITA T in the assessee's own case for the A. Y. 2009-10 by holding that this company operates in a different business strategy of acquiring companies for inorganic growth as its strategy and considering the profit margins of the company and insufficient segmental data, held that this company cannot be selected as a comparable. It was also held by the DRP that on the very same reason of acquisition of various companies, being an extraordinary event, it had an impact on the profit of the company and the said company was directed to be excluded. 18.1 For the relevant A.Y. 2010-11, the Ld. Counsel for the assessee has drawn our attention to the inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport such as acquisition of India based captive business outsourcing arm, resulting in acquisition of an aggregate amount of $ 2.5 billion over a period of 9.5 years and its impact on the financial implications of the company also brought to our notice. It is submitted that these peculiar circumstances have been considered by the Coordinate Bench of this Tribunal in the case of Hyundai Motors India Engg. (P.) Ltd. (supra) for exclusion of the list of comparables. Respectfully following the decision of the Bench, these two comparables TCS e-Serve International Ltd and TCS e-Serve Ltd directed to be excluded. In view of the aforesaid findings and judicial precedent relied upon, we hold that the comparable chosen by ld TPO i.e Infinite Data Systems Pvt Ltd (Merged) is functionally not comparable with the assessee company." 35. In view of what has been discussed above, we are of the considered view that Infinite is not a valid comparable vis-à-vis the taxpayer for TP analysis. So, we order to exclude the same from the final set of comparables. WIPRO TECHNOLOGY SERVICES LTD. (WIPRO) 36. The taxpayer sought exclusion of Wipro on the ground that it involved in providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avis Open Solutions Software Services Pvt. Ltd. engaged in software development, research and other related services and found the same to be invalid comparable in the light of the provisions contained u/s 92B(2) of the Act by returning following findings :- "The aforesaid provision clearly envisages that, if a transaction has been entered into by an enterprise with unrelated party, then for the purpose of Section 92B(1) it is deemed to be transaction entered into between related parties (two A.Es) if there exists prior agreement in relation to the relevant transaction between third party and the A.E. In other words, as per terms of Section 92B(2), even if the transaction is between unrelated party and an enterprise, then, it would be deemed to be an international transaction if there was any prior agreement between the related parties on the basis of which present transaction is being undertaken." 40. So, when Wipro has received the revenue by virtue of MSA with Citi Group on account of pre-arrangement, it is deemed to be international transactions and in these circumstances, Wipro fails RPT filter applied by the TPO. 41. Ld. DR for the Revenue in order to repel the arguments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he annual report of this company, available at page 1465 to 1540 of the Paper Book, we can easily make out that this company is into software development services, product design services, innovation design engineering services, system integration and support services. But the TPO has taken software development services only for the purpose of comparability with the assessee. However, perusal of the detail segment goes to prove that design and development of hardware is also included in the software services. In other words, Tata Elexi Ltd. is into software produce as is evident from the annual report and as such, cannot be taken as a valid comparable. So, we order to exclude this company from the final list of comparables." 46. In view of what has been discussed above, we are of the considered view that Tata Elxsi is not a valid comparable vis-à-vis the taxpayer, hence we order to exclude the same from the final set of comparables. THIRDWARE SOLUTIONS LTD. (THIRDWARE) 47.The taxpayer sought exclusion of Thirdware on ground of functional dissimilarity being engaged into sale of software products and on the ground that Thirdware has been ordered to be excluded by the coo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Persistent, available at page 1848 of the Paper Book - IV, it shows that the substantial income of Persistent is from sale of software services and products and has earned its revenue from sale of licensing of products and royalty. For ready perusal, revenue recognition of Persistent, available at page 1858, is extracted as under :- "H. Revenue recognition Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company an revenue can be reliably measured. I. Income from software services Revenue from time and material engagements is recognised on time basis in accordance with the terms contracts. In case of fixed price contracts, revenue is recognised based on the milestones achieved as specified in the contracts on proportionate completion basis. Revenue from licensing of products is recognised on delivery of products. Revenue from royalty is recognised on sale of products in accordance with the terms of the relevant agreement. Revenue from maintenance contracts are recognised on a prorata basis over the period of the contract as and services are rendered. Unbilled revenue represents revenue recognised in relatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services/ outsourced product development services, Enterprise application development and IT services. However, no segmental information is available. 56. Comparability of E-Zest was examined by the coordinate Bench of the Tribunal in case of ST Microelectronics Private Ltd. (formerly Genesis Microchip (India) Pvt. Ltd. in IT (TP) A.No.949/Bang./2011 order dated 06.01.2017, available at page 2459 of Paper Book - V vis-à-vis ST Microelectronics Private Ltd., a software development service provider and ordered to exclude the same by returning following findings :- "14.4 We have heard the rival submissions and perused and carefully considered the material on record. It is seen from the record that the TPO has included this company in the list of comparables only on the basis of the statement made by the company in its reply to the notice under section 133(6) of the Act. It appears that the TPO has not examined the services rendered by the company to give a finding whether the services performed by this company are similar to the software development services performed by the assessee. From the details on record, we find that while the assessee is into software development s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that TPO had no complete data at that time and there is no estoppel against statute as the issue can be challenged at any point of time during proceedings, the application for additional ground is allowed. Moreover no evidence is required to be brought on record to adjudicate the controversy raised by the taxpayer by way of additional evidence. 59. Keeping in view the fact that L&T and Mindtree taken as comparables for benchmarking the international transactions have not been analyzed for benchmarking the international transactions having been challenged now by way of additional grounds, we are of the considered view that the issue is required to be sent back to the TPO to decide afresh after providing an opportunity of being heard to the taxpayer. COMPARABLES SOUGHT TO BE INCLUDED BY THE TAXPAYER R. SYSTEMS INTERNATIONAL LTD. (R. SYSTESM) CALIBER POINT BUSINESS SOLUTIONS LTD. (CALIBRE) 60. The taxpayer sought inclusion of R. Systems on the ground that it is functionally similar. The TPO has excluded R. Systems on the sole ground that its financial year is calendar year and also on the ground that data for the quarter ending December 2009 was unaudited and as such quar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rule 10(B)(4) which reads as under:- "10B(4) The data to be used in analysing the comparability of an uncontrolled transaction with an international transaction shall be the data relating to the financial year in which the international transaction has been entered into". 31. The Rule does not exclude from consideration the data of an entity merely because its financial year is different from the financial year of the assessee. What the Rule requires is that the data to be used in analyzing the financial results of an uncontrolled transaction with an international transaction shall be the data relating to the financial year in which the international transaction has been entered into. Thus so long as the data relating to the financial year is available, it matters not, if the financial year followed is different. In the case before us the data relating to the relevant financial year of R.Systems International Limited is available. 32. We are, therefore, entirely in agreement with the decision of the Tribunal that if the data relating to the financial year in which the international transaction has been entered into is directly available from the annual accounts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, it has been elaborated as follows:- Cost of services Rs. Cost of services - Overseas 2,77,32,337 Cost of services - Domestic 2,58,40,435 Transcription charges 3,97,389 Web Designing charges 1,64,602 Staff welfare 11,43,144 Staff training 3,63,496 Contribution to PF & ESI 15,47,906 Gratuity 13,04,894 Ex Gratia 0 HRD expenses 3,10,87 5,88,05,074 (iii) It was submitted by the ld. Counsel for the assessee that the TPO ignored the contribution to PF & ESI, Gratuity and Ex Gratia payments and arrived at the employee cost. According to the ld. Counsel for the assessee, doing so was not proper. If all the employee costs are properly considered, then this company can pass the filter applied by the TPO for excluding it. (iv) We have considered the submission of the ld. counsel for the assessee and are of the view that prima facie the submission of the ld. counsel are acceptable. We, however, feel that it would be just and appropriate to direct the TPO to consider including this company as a comparable afresh in the light of the facts brought to our notice by the ld. counsel for the assessee. We hold and direct accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed comparable companies for determining the ALP of the international transactions of the taxpayer in accordance with the provisions of the Act. AO/TPO has failed to comply with the directions. So, they are directed to comply with the directions issued by ld. DRP. Consequently ground no.8 is determined in favour of the taxpayer for statistical purposes. GROUND NO.16 69. Ld. DRP/AO has treated the software expenses amounting to Rs. 12,27,686/- as capital in nature. The ld. AR for the taxpayer contended that software expenses cannot be capitalized and this issue is already decided in favour of the taxpayer in its own case for AY 2009-10 (supra). Operative part thereof is extracted as under:- "55. Assessee in the profit and loss account has debited an amount of Rs. 3,84,651/- being expenditure on time based licences. AO treated the software time based licence expenses of Rs. 3,84,651/- as capital in nature and thereby disallowed the same. However, the AO allowed the assessee to depreciation thereon @ 60% which is Rs. 2,30,791/- and added back the remaining amount of Rs. 1,53,860/- to the returned income. DRP also affirmed the decision rendered by AO. 56. Ld. AR for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RP have treated expenditure of Rs. 13,84,084/- claimed by the taxpayer as expenditure on training of employees as capitalized in nature being of enduring benefit to the taxpayer. The ld. AR for the taxpayer contended that this issue has already been decided in favour of the taxpayer in its own case for AY 2009-10 (supra). Operative part thereof is extracted as under:- "60. Assessee debited an amount of Rs. 38,09,220/- in his profit & loss account on account of training expenses and claimed the same as revenue expenditure. However, AO being not satisfied with the explanation given by the assessee came to the conclusion that these expenses have been incurred for providing various training which is in the nature of giving enduring benefit to the assessee and treated the same as capital expenditure and then added to the income of the assessee. 61.However, ld. AR for the assessee contended that the payment of training expenses is in the nature of revenue expenses and relied upon the decision rendered by Hon'ble High Court of Delhi in judgment cited as Commissioner of Incometax-II vs. Munjal Showa Ltd. - (2010) 329 ITR 449 (Delhi). 62.The ratio of the judgment in case of Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t been disputed by both the ld. Representatives of the parties that the judgment cited as Goetze (India) Ltd. as relied upon by DRP is not applicable to the facts and circumstances of the case and when the issue has been raised during assessment proceedings, though no depreciation was claimed in the return of income, AO was duty bound to decide this issue. So, we hereby restore this ground to the AO to decide afresh after providing an opportunity of being heard to the assessee. Accordingly, this ground is determined in favour of the assessee." 76. Following the findings returned by the coordinate Bench of the Tribunal in AY 2009-10 (supra), this issue is ordered to be remanded back to the AO to decide afresh after providing an opportunity of being heard to the taxpayer in the light of the directions issued in AY 2009-10. GROUDS NO.22 & 23 77. Grounds No.22 & 23 9 being consequential in nature need no specific findings. REVENUE'S APPEAL (ITA No.168/Del./2015) 78. Revenue has challenged exclusion of Infosys Technology Ltd. (Infosys) by ld. DRP. Ld. DRP has excluded Infosys by returning following findings :- "In addition to the above, the assessee has objected to the inclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (refer page 117 of the paper book) Contract Software Development Services. Revenue Rs.9, 028 Crores Rs.16.09 Crores Ownership of branded/proprietary products Develops/owns proprietary products like Finacle, Infosys Actice Desk, Infosys iProwe, Infosys mConnect, Also, the company derives substantial portion of its proprietary products (including its flagship banking product suite "Finacle‟) Onsite Vs. Offshore As much as half of the software development services rendered by Infosys are onsite (i.e., services performed at the customer's location overseas). And offshore (50.20%) (Refer page 117 of the paper book) than half of its service, income from onsite services. The appellant provides only offshore services (i.e., remotely from India) Advertising/Sales promotion and brand building 100% services are provide to AEs) Expenditure on Research & Development Rs. 102 crores Rs. Nil Other 100% offshore (from India) 6. Learned counsel for the Revenue has submitted that the tribunal after recording the aforesaid table has not affirmed or given any finding on the differences. This is partl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own branch cannot be a valid comparable. Infosys was ordered to be excluded in taxpayer's own case for AY 2009-10. However, it is brought to our notice that the Revenue has went in appeal against the order of the Tribunal passed in taxpayer's own case for AY 2009-10 (supra) in which question of law has been framed. 81. Hon'ble High Court of Delhi in case of Pr. CIT vs. Fiserv India P. Ltd. in ITA 602/2016 order dated 07.10.2016 also ordered to exclude Infosys as a comparable vis-à-vis Fiserv India P. Ltd. which was into software development on the ground that Infosys is having its own brand intangibles, an advantage which the taxpayer does not possess. 82. In view of what has been discussed above, we are of the considered view that ld. DRP has rightly excluded Infosys from the final set of comparables. However, our findings are subject to the decision pending before Hon'ble High Court in assessee's own case for AY 2009-10 and as such, TPO/AO to proceed accordingly. 83. Resultantly, the appeal filed by the taxpayer is partly allowed for statistical purposes and the appeal filed by the Revenue is dismissed. Order pronounced in open court on this 3rd day of July, 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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