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TMI Blog2020 (9) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... icer for assessment year 2013-14 u/s 143(3) r.w.s. 144C of the Act in pursuance of directions given by Ld Dispute Resolution Panel (DRP). 2. At the time of hearing, the Ld A.R pressed grounds numbered as 3(d), 3(f), 3(g) and 3(h). In ground no.3(d) also, the Ld A.R did not press contentions relating to comparable companies named ICRA Techno Analytics Ltd, R.S. Software (India) Ltd and CG-Vak Software Exports Ltd. Accordingly, all other grounds, except those are pressed, are dismissed as not pressed. 3. The grounds pressed by the Ld A.R related to the addition made by way of Transfer pricing adjustment. Under these grounds, the assessee seeks exclusion of three companies, viz., Persistent Systems Ltd; Larsen & Toubro Infotech Ltd and Mind Tree Ltd. The assessee also inclusion of two companies, viz., R Systems Ltd and Akshay Software Technologies Ltd., in the list of comparables. 4. The assessee herein is providing technical support services on behalf of M/s Autodesk Singapore to its Associated Enterprises. As per T.P documentation, it has provided various types of services to its Associated Enterprises. We are concerned herewith services rendered under the title "Technical Suppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Larsen and Toubro Infotech Ltd. 4. Mindtree Ltd. (seg.) 5. Persistent Systems Ltd. 6. RS Software (India) Pvt. Ltd. 9. Now, the assessee seeks exclusion of following comparable companies out of the list of comparables upheld by Ld DRP:- (a) Persistent Systems Ltd (b) Larsen and Toubro Infotech Ltd (c) Mindtree Ltd. The Ld A.R submitted that the TPO has applied filter of minimum service revenue of Rupees One crore. However, he has failed to fix any upper limit on the turnover/service revenue. She submitted that the turnover of the assessee is ₹ 22.50 crores and hence the assessee falls under the category of companies having turnover between ₹ 1.00 crore to ₹ 200 crores. She submitted that the coordinate bench has held in the assessee's own case related to AY 2005-06 and 2008-09 reported in (2018) 96 taxmann.com 263 and also in the case of Tavant Technologies India P Ltd (IT(TP)A No.1700/Bang/2017 dated 21.08.2020) has held that the companies having turnover of more than ₹ 200 crores could not be taken as comparable companies for an assessee having turnover of less than ₹ 200 crores. The Ld A.R submitted that, on application of above sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dated 16.9.2015 has taken the view that turnover is a relevant criterion for choosing companies as comparable companies in determination of ALP in transfer pricing cases. There is no decision of the jurisdictional High Court on this issue. In the circumstances, following the principle that where two views are available on an issue, the view favourable to the Assessee has to be adopted, we respectfully follow the view of the Hon'ble Bombay High Court on the issue. Respectfully following the aforesaid decision, we uphold the order of the DRP excluding 5 companies from the list of comparable companies chosen by the TPO on the basis that the IT(TP)A No.1700/Bang/2017 5 companies turnover was much higher compared to that the Assessee. 17.8. In view of the above conclusion, there may not be any necessity to examine as to whether the decision rendered in the case of Genisys Integrating (supra) by the ITAT Bangalore Bench should continue to be followed. Since arguments were advanced on the correctness of the decisions rendered by the ITAT Mumbai and Bangalore Benches taking a view contrary to that taken in the case of Genisys Integrating (supra), we proceed to examine the said issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inclusion of following two companies:- (a) R Systems International Ltd (b) Akshay Software Technologies Ltd 13. The Ld A.R submitted that the TPO has rejected M/s R systems International Ltd., only for the reason that it adopts different accounting year. The Ld A.R submitted that the Hon'ble Punjab & Haryana High Court has held in the case of CIT vs. Mercer Consulting (India)(P) Ltd (2016)(76 taxmann.com 153) has held that so long as the data relating to the relevant financial year is available, companies ought not to be rejected merely because they follow a different financial year. The Ld A.R submitted that the data relating to this company for each quarter is available in public domain and it can be collated to arrive at the financials relating to the financial year adopted by the assessee company. She submitted that the assessee has already collated the details. Accordingly she prayed for inclusion of this company. 14. We heard Ld D.R, who submitted that this company may be restored to the file of AO/TPO for examining it afresh. In the written submissions, the Ld A.R has collated the financial details of this company for the four quarters ending 31.3.2013 in accordance wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "income from software services" given under the head "Revenue from Operations" , which mentioned that the Income from software services was ₹ 19.83 crores. Now the dispute boils down to the nature of functions performed by this company. It is the responsibility of the assessee to show that both the assessee and the comparable company perform similar functions. Before us, the Ld A.R placed her reliance on the decision rendered by co-ordinate bench in order to contend that this company is comparable. However, TPO has issued notice u/s 133(6) of the Act to the above said company and collected the details of functions performed by it, wherein the nature of activities performed by this company is stated as "providing professional services, procurement, installation, implementation and support & maintenance of ERP products and services". It is pertinent to note that the above said information was given by M/s Akshay Software Technologies Ltd Ltd. However, we find that they are general description of the functions performed. Specific functional details have not been furnished. What is required to be found out is whether these functions fall under the category of "Software developme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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