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TMI Blog2017 (12) TMI 1683X X X X Extracts X X X X X X X X Extracts X X X X ..... 410881/- 2. According to the transfer pricing study report submitted by the assessee, the assessee has the functions of software development segment as per page No. 176 of the paper book. According to that assessee is carrying on in activity from its Noida unit and Bangalore unit with regard to the low end chip design/software development services. Assessee is provided with the detailed specification from the group companies and based on these specifications received from the above company the assessee perform functions are related to development of software that can be embedded in the semiconductor chips. The complete initialization of the process the group companies conceptualize the product and create the architectural design specification. Thereafter a part of the development functions is outsourced to the free scale Indian assessee and other group companies. According to the assessee it carries on low-level chip designing and develop the software tools/applications. It does not have any research and development activities but only provides captive service is based on complete and detailed specifications provided by the group. It also follows a quality review process at each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer/TPO to modify the adjustment on account of transfer pricing from Rs. 302823803/- to Rs. 259842195/- . Consequently the ld Assessing Officer passed the assessment order u/s 143(3) read with section 144C of the Act on 30.1.2015 determining total taxable income of the assessee at Rs. 440753890/-. Therefore, aggrieved, the assessee has raised the following grounds of appeal in ITA No. 1263/Del/2015 for the Assessment Year 2010-11 before us:- "1. That on the facts and in the circumstances of the case and in law, the order passed by the learned Assessing Officer ("Ld. AO") is bad in law and void ab-initio. 2. That on facts and circumstances of the case and in law, the Ld. AO/Ld. TPO/Ld. Dispute Resolution Panel ("DRP") erred in making an addition of Rs. 25,98,42,195 under section 92 of the Act by re-computing the arm‟s length price of the international transactions in Software Development Segment (SDS) and Market Support Segment (MSS). 3. The Ld. AO/Ld. TPO/Ld. DRP erred in: 3.1 Not accepting the quantitative filters applied by the Appellant in its transfer pricing documentation & fresh search and has instead applied certain modified quantitative filters which lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer stating that assessee has not demonstrated how the services to a single customer is not comparable to it as assessee services are also to its single associated enterprise only. With respect to the functional dissimilarity same was also rejected. Other issues with respect to abnormal margins, supernormal growth have also been rejected. He also rejected the contention of the assessee that company owns significant intangibles in the form of software. Similar arguments were also advanced before us by the Ld. authorised representative stating that the Infinite data systems private limited should be excluded from the comparability analysis. For this he relied on the decision of the coordinate bench in ITA No. 1051/KOL/2015 for assessment year 2009 - 10 dated 19-10-2016 wherein at para No. 8.3 the above comparable was excluded from the comparability analysis in case of a Labvantage solutions private limited,. 11. The Ld. departmental representative vehemently objected to the claim of the Ld. authorised representative about exclusion of the above comparables stating that Ld. transfer pricing officer as well as the Ld. DRP has given adequate reasons for inclusion of the above compara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... software for its clients and do not perform any IT enabled services. The Ld. dispute resolution panel also confirmed the action of the Ld. transfer pricing officer. The Ld. authorised representative reiterated the same arguments which were raised before the Ld. lower authorities. Over and above ld AR relied up on decision of the coordinate bench in ITA No. 1051/KOL /2015 for assessment year 2009 - 10 dated 19 - 10 - 2016 wherein in para No. 8.2 the above comparable company was excluded. 14. The Ld. departmental representative vehemently submitted that the Ld. transfer pricing officer and the Ld. dispute resolution panel has given enough reasons for inclusion of the above comparable and the Ld. authorised representative could not state anything further that how the order of the Ld. transfer pricing officer and the Ld. dispute resolution panel is erroneous but merely citing a decision does not help the case of the Ld. authorised representative as it was compared with the functions of the that appellant in that case. 15. We have carefully considered the rival contention. From the business profile of the above company it is evident that it is engaged in the IT and IT enabled service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove contention. Before us, the ld AR submitted that this comparable should be excluded in view of the decision of Hon'ble Delhi High Court in case of Agnity India Technologies Ltd 262 CTR 291. He further stated that this comparable has been excluded in the case of the assessee for AY 2007-08 by the coordinate bench. 17. The ld DR relied upon the orders of the lower authorities. The ld DR could not point out that why we should not follow the decision in the assessee‟s own case without there being any change pointed out, hence, we respectfully follow the decision of the coordinate bench in assessee‟s own case for AY 2007-08 and directs the ld Transfer Pricing Officer to exclude the above comparable. 18. The 4th comparable contested by the Ld. authorised representative is with respect to the Sonata software limited stating that it breaches RPT filter adopted by the Ld. transfer pricing officer. He referred to the page number 769 2836 of the balance sheet of the comparable company showing that its RPT is higher than the filter. The similar objection was raised by the Ld authorised representative with respect to the earlier years wherein we have set aside this comparab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selected by the Ld. Transfer Pricing Officer, which is engaged in three segments such as registrar and transfer agent activity, records management activity and pay roll and trust fund activity. According to the Ld. Transfer Pricing Officer and Ld. Dispute Resolution Panel, this is a good comparable. However, the Ld. Authorised Representative submitted that this company is engaged in Share Registry Services and other support services. Further as per annual report of the company, it is primarily engaged in provision of share registry and related financial services and therefore, cannot be compared with the Assessee, a captive market support service provider. It is also contended that company has earned a high profit margin of 41.86% during the FY 2009-10. The Ld. Authorised Representative placed reliance in this regard on the decision of Delhi ITAT in case of Microsoft Corporation India (P.) Ltd vs. DCIT, ITA 5766/Del/2011. We have carefully considered the rival contention and perused the balance sheet of the company, which is placed the paper book, which says that it is mainly engaged in the business of registrar and share transfer agent. As per segment reporting shows, that out of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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