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TMI Blog2018 (7) TMI 2074X X X X Extracts X X X X X X X X Extracts X X X X ..... certain comparables to be good comparables to arrive at an 'Arm's Length Price' in the case of the assessees with which the assessees may not be satisfied and have filed such appeals before this Court. Therefore we clarify that mere dissatisfaction with the findings of facts arrived at by the learned Tribunal is not at all a sufficient reason to invoke Section 260-A of the Act before this Court. - IT Appeal No. 174 Of 2015 - - - Dated:- 25-7-2018 - Dr. Vineet-Kothari And Mrs. S Sujatha JJ. E.I. Sanmathi, Adv. for the Appellant. Mallaha Rao, Adv. and Parth, Adv. for the Respondent. JUDGMENT 1. The Appellants - Revenue have filed this appeal raising purported substantial questions of law arising from the Order of the learned Income Tax Appellate Tribunal Bench 'A', Bangalore, Annexure A dated 12/12/2014 in IT(TP)A.No.108(Bang.)/2014 for AY 2009-10. 2. The substantial questions of law raised in the Memorandum of appeal by the Appellants-Revenue are quoted below for ready reference:- 1. Whether on the facts and in the circumstances on the case, the Tribunal is right in law in setting aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has to succeed. In the case of M/s Triology E-Business Software Ltd. v. DCIT [2011] 140 ITD 540 it was held as under, with regard to forex gain/loss. ** ** ** 26. Before parting, it will be inappropriate, if we do not deal with the decision of Bombay Bench of the Tribunal in the case of M/s Capgemini Ltd., v. ACIT [2014] 147 ITD 337 strongly relied on by the learned DR. No doubt, it was held by the Tribunal in the above decision that Dun Bradstreet classification according to the size of the company could not be accepted, since there was no empirical evidence to suggest relation between margin and turnover. But in the said case, revenue was able to show through a graph plotted between margin and turnover for each of the comparables selected by the assessee that there was no linear relationship between margin and turnover. This exercise has not been done here by the assessee. Therefore, we are of the opinion, that the decision in the case of M/s Capgemini Ltd., (supra) would not further the case of the revenue. 27. We therefore, direct the TPO to re-work the average margins of the comparables as per our dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further submitted that size as a criteria for selection of comparables is also recommended by OCED in its TP guidelines. The observation of OCED in para 3.43 of the chapter on guidelines reads as follows: ** ** ** 8.2 The learned counsel for the assessee submitted that similar observations were also made by ICAI in para 15.4 of TP guidance note. He submitted that TPO's range of ₹ 1 crore to infinity has resulted in selection of companies like M/s Infosys which is having a turnover of ₹ 9,028 crores which is 1,1007 times bigger than the assessee company which has a turnover of ₹ 8.15 crores. He further submitted that NASSCOM has also categorized the companies based on the turnover as follows: 8.3 The learned Departmental Representative rebutted this argument and submitted that the Act or Rules does not provide for the turnover filter. He submitted that as rightly pointed out by the TPO in the case of service sector, the size of the company does not matter because, the infrastructure layout is very less and it will not affect the profit ratio in any way. He drew out attention to the particular port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as software product company and functionally different from the assessee which was into software development services. In the case of M/s Cisco System Pvt. Ltd. v. DCIT (ITA No.271/Bang/2014 dated 14-08-2014 which was also a company rendering software development services with regard to adoption of M/s Bodhtree Consulting Ltd., as a comparable, it was held as under at para-20 of the order; 20. We have perused the orders and heard the contentions. There is no dispute that the M/s.Cisco Systems India (P.) Ltd. (supra) is an affiliate of the assessee company and engaged in similar business like that of the assessee namely rendering software services development etc. Though the said company was having other business also, with regard to its software development segment, this Tribunal held Bodhtree Consulting Ltd. Infosys Ltd, Kals Information Systems Ltd and Tata Elxsi Ltd to be not proper comparables. Relevant paras of the order dated 14.08.2014 is reproduced hereunder: Accordingly, we direct that M/s. Bodhtree Consulting Ltd., being functionally different is to be excluded from the comparables. The appeal filed by the Revenue against the judgment of the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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