9911796707
TMI Blog2022 (3) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is general in nature, hence, requires no adjudication. 5. Ground Nos. 2 to 8, 10 and 11, the ld. AR submits that the assessee has not interested to prosecute ground Nos. 2 to 8, 10 and 11. Accordingly, the same are dismissed as not pressed. 6. Ground No. 9 raised by the assessee contending that both the authorities below in appropriately considered Infobeans Systems Private Limited (Infobeans) as comparable to the assessee, thereby, the assessee intends to exclude the Infobeans from the final set of comparable companies. 7. The brief facts of the case regarding the assessee i.e. SAS R&D is a wholly owned subsidiary of SAS Institute Inc (SAS US). The assessee was established on 28-07-2000 as a private limited company. The assessee is primarily engaged in providing software development and software consultancy services to its AEs during the year under consideration. For the sake of convenience these services hereinafter called as software services. The total value of provision of software development support and consultancy services is Rs. 88,02,72,835/-. The assessee selected TNMM as the most appropriate method to benchmark the international transactions of software servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent at Page No. 192 of the paper book. On perusal of the Consultant Agreement at Page Nos. 192 to 194 of the paper book wherein the conditions of services provided by the consultant is reflected. On an examination of said agreement we note that the assessee in the capacity of consultant provide professional services in support of the Institute"s R&D department with a condition that the consultant shall not subcontract any of consultant"s obligations. The Institute also has the right to inspect work at any time, stop work, require changes to the work and request modifications to the work. The Institute is the sole owner of all proceeds in any form developed pursuant to the agreement. The consultant has no ownership interest in any material, data, specification, tape, or program, or any confidential information provided to the consultant in connection with this agreement. Further, we note that the consultant shall invoice the institute each month for the previous month"s services and expenses or upon completion of the services, whichever occurs earlier. We find an invoice at Page No. 976 of the paper book which is similar to the invoice reflecting in Page No. 191 of the paper book. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed accounts which clearly shows the financial statements of the said concern included the financial statements of software business of demerged company which in our opinion is an extraordinary event which has taken place making the said concern has not comparable to the company. The similar issue came up before this Tribunal in assessee"s own case for A.Y. 2012-13, the order of which is placed at Page No. 749 of the paper book. The relevant discussion is made at Para No. 23 of the said order wherein we note that this Tribunal considering the order in the case of M/s. PubMatic India Private Limited held the Infobeans is not a comparable in view of demerger and directed the AO/TPO to exclude Infobeans Systems Private Limited from the final set of comparables. The ld. DR did not dispute the same nor placed on record any view contrary to the decision of the Tribunal in assessee"s own case for A.Y. 2012-13. Having considering the facts and circumstances of the case and the discussion made by us here-in-above following the same findings as rendered by the CO-ordinate Bench of Tribunal in assessee"s own case for A.Y. 2012-13, we direct the AO/TPO to exclude Infobeans Systems Private Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. The ld. AR submits that the above ground raised by the assessee is purely legal ground and raised for the first time before this Tribunal. Since, the Education Cess paid by the assessee available with the respondent revenue which does not require any further examination of facts and prayed to allow the additional ground. Further, he submitted that this Tribunal taking support from the decision of Hon"ble High Court of Bombay in the case of Sesa Goa Ltd. reported in 423 ITR 426 directed the AO to allow deduction paid towards Education Cess. 14. After hearing both the parties, we note that the assessee paid Education Cess while computing the taxable income. The Hon"ble High Court of Bombay in the case of Sesa Goa Ltd. (supra) was pleased to hold that the Education Cess is an allowable expenditure as per the provision of the I.T. Act. The relevant portion of the order of Tribunal in ITA No. 1578/PUN/2017 for A.Y. 2011-12 in the case of M/s. Advik Hi-Tech Pvt. Ltd. is reproduced here-in-below for ready reference : "12. The assessee has also preferred additional ground which reads as follows: "The Ld. AO be directed to allow deduction of Rs. 12,91,464/- paid towards Education C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deductable from total income of the assessee. 14. The Pune Bench of the Tribunal in the case of DCIT Vs. Bajaj Allianz General Insurance Company Limited, ITA Nos.1111 & 1112/PUN/2017 for the assessment years 2013-14 & 2014-15 dated 25.07.2019 on the issue has held and observed as follows: "13. On hearing both the parties on this issue, we find that this issue is covered one by the decision of the Hon'ble High Court of Judicature for Rajasthan Bench at Jaipur in the case of Chambal Fertilisers and Chemicals Ltd. Vs. JCIT, Range -2, Kota wherein substantial question of law No.3 is relevant in this regard (Para 3) and the same was adjudicated by the Hon'ble High Court at Para 12 of the judgment. The Hon'ble High Court on this issue held the said question No.3 is answered in favour of the assessee. For the sake of completeness, the said Paragraph is extracted as under: "12. We have heard consel for the parties. On the third issue in appeal no.52/2018, in view of the circular of CBDT where word "Cess" is deleted, in our considered opinion, the tribunal has committed an error in not accepting the contention of the assessee. Apart from the Supreme Court decision referred that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted by the ld. AR that the M/s. Lucid Software Limited engaged in rendering software development services and referred to Page No. 466 of the paper book and contended that 95% of operating revenues were derived from software services. The ld. AR argued that the M/s. Lucid Software Limited should be considered as comparable in view of the details as submitted by the assessee. The CIT(A), we note that discussed about M/s. Lucid Software Limited in the impugned order from Page Nos. 19 to 22 wherein we note that the CIT(A) on his satisfaction with the annual report of the said company held functionally comparable to the assessee. The ld. DR did not bring on record anything contrary to the material evidence against the view of CIT(A) and we uphold the direction of CIT(A) in directing the AO to include the M/s. Lucid Software Limited as comparable in the final list of comparable companies. 20. Likewise the TPO and CIT(A) rendered the same view as expressed in M/s. Lucid Software Limited in respect of Evoke Technologies Private Limited also, wherein we note that the TPO did not discuss any specific ground for non-acceptance of Evoke Technologies Private Limited as comparable company ..... X X X X Extracts X X X X X X X X Extracts X X X X
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