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TMI Blog2019 (9) TMI 1595X X X X Extracts X X X X X X X X Extracts X X X X ..... I 1797 - ITAT BANGALORE] . We hold and direct accordingly. Exclusion of provision of bad and doubtful debts from the operating cost of the comparable companies - While considering the international transaction in the distribution segment, the TPO has himself considered provision for bad and doubtful debts as part of the operating expenditure and by the same logic he should have treated provision for bad and doubtful debts as part of the operating cost in the hands of the comparable companies also. As far as the software development segment of the assessee is concerned, there is no provision for bad and doubtful debts. As in the case of Principal CIT Vs. Business Process Outsourcing India Pvt. Ltd., [ 2018 (7) TMI 380 - KARNATAKA HIG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee received a sum of ₹ 19,36,24,825/-. Besides the aforesaid international transaction, there were also other international transactions and those international transactions were considered by the Transfer Pricing Officer (TPO) to be at arms length. The operating profit to operating cost of the assessee in SWD services segment was arrived at by the assessee at 13%. The assessee, in its TP study, had chosen 5 comparable companies. The average mean of profit margin of those comparable companies was 12.52%. The assessee chose transaction net margin method (TNMM) as the most appropriate method for determination of the ALP. The assessee claimed that its profit margins were higher than that of the comparable companies and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Infotech India Vs. DCIT in IT(TP)A Nos.1418 and 2735/Bang/2017 for Assessment Year 2013-14, order dated 27.02.2019. In this decision, the Tribunal took a view following the decision of the ITAT Hyderabad Bench in the case of M/s. EPAM Systems India Pvt. Ltd., Vs. ACIT in ITA No.2122/Hyd/2017 for Assessment Year 2013-14 order dated 20.11.2017 that L T Infotech Ltd., was into software products and software solutions and no segmental details were available and therefore profit margin in the SWD segment could not be compared with the assessee s profit margin. The learned DR pointed out that the Bangalore Bench of the Tribunal in the case of CGI Information Systems and Management Consultants Pvt. Ltd., Vs. DCIT (2019) 101 taxmann.com 294 (B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is silent on these two important aspects as to this aspect that this company is having sizeable amount of bought out items for resale and have related party transactions in respect of sales of services and products. We also find that in the case of remaining three Tribunal orders i.e.Microsoft Research Lab India Pvt. Ltd.'s case (supra), WM Global Technology Services (India) (P.) Ltd. (supra) and in the case of Tecnotree Convergence Pvt. Ltd. (supra), the matter was remanded to the TPO for fresh decision. Hence, we feel it proper that in the present case also, this issue should go back to the file of TPO for fresh decision after providing adequate opportunity of being heard to the assessee and while deciding the issue afresh, all the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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