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TMI Blog2019 (5) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... it is engaged in end to end development of a product nor does it own any products. The assessee diagnosis and correct the software and further updates for the bugs in those software. It also performed routine maintenance for the software whereas the Infosys Technologies Ltd. operates at full fledged risk and perform the services of application design, software engineering and the technology lapse. The assessee was not even the developer of the software but merely providing software support services. As concluded that the Infosys Technologies Ltd. could not be treated to be a comparable in the present case for assessing ALP and, thus, it directed the TPO to exclude Infosys Technologies Ltd. from the comparability analysis of software su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in its TP Study Report? 2. Briefly stated, the facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee filed its return of income on 14.11.2007 for the assessment year 2007-08 declaring an income of ₹ 1,82,91,080/-. A reference was made to the Transfer Pricing Officer (TPO) to determine the Arm's Length Price (ALP). The TPO vide order dated 26.10.2010 (Annexure A-I) passed under Section 92CA(3) of the Act proposed the Transfer Pricing Adjustment at ₹ 2,98,61,631/-. The Assessing Officer vide draft order dated 20.12.2010 (Annexure A-II) made the addition of ₹ 2,98,61,631/- on account of Transfer Pricing Adjustments and ₹ 14,29,434/- on account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. as a comparable company in its transfer pricing study report and vide letter dated 13.10.2010 accepted it to be so before the TPO without any comment. However, it was challenged for the first time before the CIT(A). The assessee claimed that Infosys Technologies Ltd. was not a valid comparable to the assessee as the assessee was a pigmy as compared to the giant Infosys Technologies Ltd. 6. The Tribunal while accepting the plea of the assessee had recorded that the assessee is providing services of commissioning of software embedded in the equipment supplied by M/s ZTE Telecom to its customers in India. The services provided by the assessee also includes localization and customization and is engaged in providing low end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find himself that Infosys is having the similar FAR as compared to the assessee. Before the ld. Transfer Pricing Officer the updated margins were also provided of this company and no objections were taken. This fact is evident from the letter of Transfer Pricing Officer dated 31.08.2010 addressed to the assessee. Furthermore, before the Transfer Pricing Officer vide letter dated 13.10.2010 has accepted the comparable without any comment. Therefore, it is apparent that assessee has not challenged this comparable before the ld. TPO. However, for the first time it was challenged before the ld CIT(A) on the above ground. The functional profile of the assessee of the software support segment is that assessee is providing services of commissioni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... banks worldwide. Furthermore, the Hon'ble High Court in CIT Vs. Agnity India Technologies Pvt. Ltd. 36 Taxmann.com 289 (Del) wherein, in para No.6 on the similar arguments has approved the order of the coordinate bench for exclusion of this company compared with a company which is engaged in the business of development of software. In the present case, the assessee is not even the developer of the software but merely providing software support services. In view of this respectfully following the decision of the Hon'ble Delhi High Court we direct the ld Transfer Pricing Officer to exclude Infosys Technologies Ltd. from the comparability analysis of software support systems segment of the assessee while determining Arm's length pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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