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TMI Blog2019 (10) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... red to as DRP ) have grossly erred by not considering the upper limit of turnover filter applied by the appellant thereby ignoring the numerous jurisdictional precedents. The following comparable are sought to be rejected under this ground: a. Infosys BPO Limited b. TCS e-Serve Ltd c. Accentia Technologies Ltd d. e4e Healthcare Services Pvt Ltd 2. The learned TPO and the Hon'ble DRP have grossly erred by considering BNR Udyog Ltd as comparable even though it fails the RPT criteria as applied by the learned TPO himself. 3. The learned TPO and the Hon'ble DRP have grossly erred by comparing the appellant with companies which have an entirely different functional and risk profile. The following comparables are sought to be rejected under this ground: a. Infosys BPO Limited (this also fails on upper limit of turnover filter) b. TCS E Serve Ltd (this also fails on upper limit of turnover filter) c. BNR Udyog Ltd (this also fails on RPT filter) The learned Assessing Officer has erred in initiati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed addition in the draft assessment order. On objection appeal by the assessee, the DRP excluded 3 out of 10 comparable companies chosen by the TPO. 5. The AO passed the final assessment order after giving effect to the order of the DRP and the addition ultimately sustained was a sum of ₹ 44,96,326/-. Against the aforesaid addition, the assessee is in appeal before the Tribunal. 6. At the time of hearing of the appeal, the learned Counsel for the assessee pleaded for exclusion of 3 out of 7 comparable companies that remained after the order of the DRP viz., Infosys BPO Ltd., TCS E-Service Ltd., and BNR Udyog Ltd. As far as Infosys BPO Ltd., is concerned, the learned Counsel for the assessee brought to our notice a decision of the ITAT, Bangalore Bench, in the case of Zyme Solutions Pvt. Ltd., Vs. ACIT in IT(TP)A No.1661/Bang/2016 dated 16.11.2018 and another order in the same case dated 28.06.2019. In the aforesaid order dated 28.06.2019, the Tribunal considered exclusion of Infosys BPO Limited in the case of assessee who is also engaged in rendering ITES such as the assessee. The Tribunal held that the aforesaid 2 companies sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fosys 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 comparable companies chosen by the TPO is BNR Udyog Ltd. In original order passed by the Tribunal this company was retained as a comparable company. In the M.P. filed by the Assessee it was pointed out that the chart filed at the time of hearing before the Tribunal, the assessee company sought to exclude this company on the ground that the turnover of this company was only 1.7 cores and it cannot be compared with turnover of assessee which was 30.6 crores. It was also submitted on behalf of the assessee that this company has related party transaction (RPT) over and above the threshold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se in AY 201112 in ITA No.99/Del/2016 reported in (2017) 87 taxmann.com 251 (Del) in BT e-Serve (India) Pvt.Ltd. Vs. ITO giving identical reasons for excluding BNR Udyog Limited from the list of comparable companies in the field of companies rendering ITES such as the Assessee. Respectfully following the aforesaid decision, we direct exclusion of the aforesaid company from the list of comparable companies chosen by the TPO. 7. In view of the aforesaid decision of the Tribunal which is also in relation to Assessment Year 2012-13, we hold that the aforesaid 2 companies should be excluded from the list of comparable companies. 8. As far as TCS E Service Ltd., is concerned, the comparability of this company was considered by this Tribunal in the case of Zyme Solutions Ltd., in its order dated 16.11.2018 as follows:- 11. TCS E Service Ltd.: This company was selected by the TPO and objected by the assessee for inclusion in the list of comparables on the ground that it is functionally different as it is engaged in the business of BPO, banking, finance, insurance domain. This contention was rejected by the TPO by hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancy Services' (TCS) strategy to build on its 'Full Services Offerings' that offer global customers an integrated portfolio of services ranging from IT services to BPO services. The Company provides its services from various processing facilities, backed by a robust and scalable infrastructure network tailored to meet clients' needs. A detailed Business Continuity Plan has also been put in place to ensure the services are provided to the customers without any disruptions. Thus, this company is also stated to be a Knowledge Process Outsourcing and therefore for the reasons stated by us while dealing with this issue of comparability of the company Infosys BPO Ltd. shall equally hold good and therefore we direct the AO/TPO to exclude this company from the list of comparables. Since the appellant company is into low end BPO, it cannot be compared with KPO service provider. 11.4 Respectfully following the decision of the co-ordinate bench of Tribunal, we direct for exclusion of this company from the list of comparable. 9. Respectively following the aforesaid decision, we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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