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TMI Blog2021 (1) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... sons to exclude it. In view of this we do not find any infirmity in the order of the ld. Lower authorities in retaining this comparable. This comparable company cannot be excluded. Fortune Infotech Ltd. fails the receding sales filter applied by the TPO and also owns its own software Finetran index - this comparable company does not pass is a filter applied by the learned TPO himself. In view of this, we direct the ld. TPO to exclude it. Igate Clobal Solutions Ltd - Such a large company whereby turnover of 509 times cannot be considered as a comparable. We direct the ld. TPO to exclude the same. Infosys BPO Ltd.- The turnover of the comparable is ₹ 1126 crores which is 616 times more than the assessee. Therefore, on this criteria itself, we direct the ld. TPO to exclude this comparable company. TCS E-Serve International Ltd - It has a huge brand value as it belongs to Tata Group. We find that this comparable company has a turnover of ₹ 1,492,956,000/ whereas the turnover of the assessee is merely ₹ 1.82 crores. Therefore on this criteria itself the learned TPO is directed to exclude this comparable company. TCS E Serve Limited company has a turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant on inappropriate and inadequate grounds; 3.3. rejecting the applicability of functional filter applied in the search process by the Appellant; 3.4. adopting a new search criterion and inconsistently applying certain additional quantitative filters; 3.5. rejecting the comparable companies selected by the Appellant without providing cogent and sufficient reasoning; 3.6. selecting companies which were not comparable to the Appellant on various grounds; 3.7. incorrectly computing the margins of comparable companies selected; 3.8. confirming the selection of current year (i.e. financial year 2009-10) data for comparability; and 4. That on the facts and circumstances of the case and in law the Ld. AO erred in not examining the validity of initiation of penalty proceedings u/s 271 (1) (c) of the Act. 5. That on the facts and circumstances of the case and in law, the Ld. AO erred in charging and computing interest under section 234A, 234B and 234C of the Act. 3. During the course of hearing of the appeal, assessee filed an additional ground of appeal challenging that the order passed by the Assessing Officer is bad in law. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. Dispute Resolution Penal-III, New Delhi. Assessee objected to the comparability analysis where certain comparables selected by the TPO and excluded by him were contested. The ld. DRP passed its direction on 22nd December, 2014. Based on those directions the ld. Assessing Officer passed an order under Section 143(3) of the Act on 30th January, 2015 wherein all 9 comparables were retained having adjusted PLI of 32.92% and final TP adjustment also remained un-changed at ₹ 30,44,698/-. Accordingly total loss was determined at ₹ 46,60,48,140/-. Thus this is the only dispute in this appeal is with respect to the transfer pricing adjustment on account of arm s length price of international transactions amounting to ₹ 30,44,698/-. 7. The ld. AR has contested only 6 comparables before us. That the ld. DR has contested the following comparables and submitted that they should be excluded:- (i) Accentia Technologies Limited; (ii) Fortune Infotech Ltd.; (iii) Igate Clobal Solutions Ltd.; (iv) Infosys BPO Ltd.; (v) TCS E-Serve International Ltd.; (vi) TCS E-Serve Ltd. 8. We have heard the contentions of the ld. AR who has submitted a detailed chart w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company. The annual accounts of the above company are placed before us at page Nos. 525 to 631 of the paper book. Stand alone annual accounts are available at page Nos. 588 to 607 of the paper book. Looking to the Revenue model of the comparable company as per Schedule 8, it earned income from medical prescription, billing and collection and income from coding. In short, it provides HRCM services. It is in fact the Health Care BPO services. As the assessee is also providing BPO services, we do not find that there is any functional dissimilarity as both are in the BPO business. Merely because the assessee as well as the comparable company operates in different business segment, it does not make their functions different. It is undisputedly both are engaged in BPO services. As the comparable company has only one segment of Health Care BPO services, we do not find any requirement of segmental information. With respect to the extra-ordinary events stated by the ld. AR it is apparent that this company has entered into scheme of amalgamation wherein earlier the subsidiary of the company, amalgamated with the assessee company, with effect from 1st April, 2008. Therefore, in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble has a turnover of ₹ 932 crores whereas turnover of the assessee is merely ₹ 1.83 crores, which is 509 times more. We rely on the decision of the honourable Bombay High Court in CIT versus Pentair Water India [2016] 69 taxmann.com 180 (Bombay)/[2016] 381 ITR 216 (Bombay)/[2016] 282 CTR 160 (Bombay) We are of the view that such a large company whereby turnover of 509 times cannot be considered as a comparable. We direct the ld. TPO to exclude the same. (iv) Infosys BPO Ltd. : The assessee has contested that the turnover of the comparable is ₹ 1126 crores which is 616 times more than the assessee. Therefore, on this criteria itself, we direct the ld. TPO to exclude this comparable company. (v) TCS E-Serve International Ltd. : The assessee has contested that it has a huge brand value as it belongs to Tata Group. We find that this comparable company has a turnover of ₹ 1,492,956,000/ whereas the turnover of the assessee is merely ₹ 1.82 crores. Therefore on this criteria itself the learned TPO is directed to exclude this comparable company. (vi) TCS E Serve Limited we also find that this comparable company has a turnover of ₹ 1359 crores ..... X X X X Extracts X X X X X X X X Extracts X X X X
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