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TMI Blog2019 (6) TMI 1397X X X X Extracts X X X X X X X X Extracts X X X X ..... value associated with it. This can be further confirmed by the presence of brand related expenses incurred by Infosys BPO Ltd. Further, Infosys BPO Ltd. has acquired Australian based company M/s Portland Group Pty Ltd. during financial year 2011-12. They provide sourcing and category management services in Sydney, Australia. Therefore, this company also failed the TPO s own filter of rejecting companies with peculiar circumstances BNR Udyog Ltd. - this company was carrying out medical transcription, medical billing and coding whereas the Assessee was a captive service provider. The Tribunal followed its own ruling in the same Assessee s case in AY 2011- 12 in BT e-Serve (India) Pvt.Ltd. Vs. ITO [ 2017 (11) TMI 64 - ITAT DELHI] giving identi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies chosen by the TPO viz., Infosys BPO, BNR Udyog Ltd., and Excel Info Ltd. 3. The issue that came up for consideration in the appeal was with regard to determination of Arms Length Price (ALP) in respect of international transaction u/s 92 of the Act. The assessee rendered information technology enabled services (ITES) to its Associated Enterprise (AE) which was subject matter of determination of ALP. The TPO had chosen 10 comparable companies. On objection by the assessee, the DRP excluded one company out of the 10 companies chosen by the TPO. In the appeal by the assessee it sought exclusion of 7 out of 9 remaining companies. The comparability of the three companies, which we now we need to examine, consequent to the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that there is apparent error in the order of the Tribunal. The error has to be set right by recalling the order of the Tribunal to the extent of rendering decision only on exclusion of Infosys BPO as comparable company." 5. We have heard the rival submissions on the comparability of Infosys BPO as a comparable company. The Delhi ITAT in the case of Baxter India Pvt. Ltd. Vs. ACIT ITA No.6158/Del/2016 for AY 2012-13 in the case of a company rendering ITES such as the Assessee, vide order dated 24.8.2017 Paragraph 23 held that Infosys BPO is not comparable with a company rendering ITES for the following reasons:- "23. In so far as exclusion of Infosys BPO Ltd. is concerned, we find from the submissions made by the assessee befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are of the considered opinion that Infosys BPO Ltd. should not be included in the list of comparables. We accordingly direct the Assessing Officer/TPO to exclude Infosys BPO Ltd. from the list of comparables for the purpose of computing the average margin." 6. It was also brought to our notice that the Hon'ble Delhi High Court in ITA No.260/2018 in the appeal filed by the Revenue against the aforesaid order dismissed the appeal at the admission stage observing that rationale given by the ITAT for exclusion was correct. In view of the aforesaid decision, we direct exclusion of Infosys BPO from the list of comparable companies chosen by the TPO. 7. The next company that is sought to be excluded by the assessee from the list of comparabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n functional comparability of this company. On the above objections in the MP, the Tribunal recalled the original order for analysis the comparability of this company afresh, with the following observations: "7. We have considered the submissions of the Ld. counsel for the assessee and are of the view that the contention in the MA that this company was sought to be excluded by the assessee on functional comparability and that the tribunal's order in the case of CGI Information Systems (supra) did not consider functional comparability or application of RPT filter of this company is correct. Therefore there is error in the order of the Tribunal in as much as functional comparability of this company with ITeS company has not been considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limit of 25% and that there were peculiar economic circumstances which impacted the profit margin of this company thereby rendering this company as not comparable company. The Tribunal while adjudicating of exclusion of this company in paragraph 14.3 of its order held that on application of employee cost filter that the Assessee has failed to show as to how the findings of the TPO and DRP are not correct. 10. The assessee has pointed out certain facts with regard to employee cost and diminishing revenue of this company which takes it out of the comparability and these aspects have not been considered by the Tribunal in its order. On the above objections in the MA, the Tribunal held as follows:- "8. We have examined the contents in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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