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TMI Blog2021 (7) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... it before DRP in which the turnover limit of ₹ 1000 crores alone is mentioned. In our opinion, this will not be very material, as the turnover filter of ₹ 200 crores has been applied in several cases by this Tribunal. The Assessee cannot be denied the right to seek its exclusion before the Tribunal and in this regard the learned counsel for Assessee has rightly placed reliance on the decision in the case of DCIT v. Quark Systems (P.) Ltd. [ 2009 (10) TMI 591 - ITAT, CHANDIGARH ] for the proposition that the Assessee cannot be precluded from seeking exclusion of a company selected by it in its TP study, when the company is otherwise not comparable to the Assessee. We therefore direct exclusion of the aforesaid 5 companies from the list of comparable companies. Treating provision for bad and doubtful debts as part of non operating expense while computing operating margin of comparables - On this issue, which is raised for the first time, we do not find any grounds raised before the lower authorities and hence this ground does not arise out of the order of the AO and hence dismissed. - IT (TP) A. No. 2751/Bang/2017 - - - Dated:- 24-6-2021 - N. V. Vasudevan , Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udy. The operating income was ₹ 15,86,27,520/-. The assessee chose companies who are engaged in providing similar services such as the assessee. The assessee identified comparable companies whose average arithmetic mean of profit margin was comparable with the Operating margin of the Assessee. The Assessee therefore claimed that the price it charged in the international transaction should be considered as at Arm's Length. 4. The Transfer Pricing Officer (TPO) to whom the determination of ALP was referred to by the AO, accepted TNMM as the MAM and also used the same PLI for comparison i.e., OP/TC. He also selected comparable companies from database. The TPO on his own identified 7 companies as comparable with the Assessee company and worked out the average arithmetic mean of their profit margins as follows: SI. No. Name of the taxpayer OP/OC I CG-VAK Software Exports Ltd 20.54% 2 I C R A Techno Analytics Ltd. 17.10% 3 Larsen Toubro Infotech Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding 5 comparable companies chosen by the TPO by application of Turnover Filter alone be adjudicated and all other grounds would be academic, hence need not be adjudicated. The Assessee seeks exclusion of the following 5 companies out of the 7 companies retained after the order of the DRP. a) Larsen Tourbo Infotech Ltd b) Persistent Systems Ltd. c) Tech Mahindra Ltd d) Mindtree Ltd e) RS Software India Pvt. Ltd. 8. We have heard the rival submissions. As far as ground No. 2 raised by the Revenue is concerned the question boils down on application of turnover filter in choosing comparable companies. The turnover of the Assessee is ₹ 15.86 Crores whereas the turnover of the 5 companies mentioned above ₹ 200 Crores. The turnover of these 5 companies are as follows: Sl. No. Comparables Operating Turnover for FY 2012-13 (INR crores) 1 Larsen Turbo Infotech Limited 3,609.32 2 Persistent System Limited 996.75 3 Tech Mahindra Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the list of comparable companies chosen by the TPO on the basis that the 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 issue also. On this issue, the first aspect which we notice is that the decision rendered in the case of Genisys Integrating (supra) was the earliest decision rendered on the issue of comparability of companies on the basis of turnover in Transfer Pricing cases. The decision was rendered as early as 5.8.2011. The decisions rendered by the ITAT Mumbai Benches cited by the learned DR before us in the case of Willis Processing Services (supra) and Capegemini India Pvt. Ltd. (supra) are to be regarded as per incuriam as these decisions ignore a binding co-ordinate bench decision. In this regard the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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