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TMI Blog2022 (12) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... al levels between the comparable companies and the assessee. Admittedly, the assessee had indeed furnished the workings for working capital adjustments before the ld. TPO as is evident - We direct the ld. TPO to grant working capital adjustment while determining the ALP of provision of marketing support related services to Red Hat US. The ground No.18 raised by the assessee for A.Y.2012-13 is allowed for statistical purposes. Inclusion and exclusion of certain comparables - Exclusion of Infobeans Technologies Ltd. from the final list of comparables as it is into diversified services but its segmental financials are not available without which it is difficult to compute the correct profit margin of the relevant segment. So Infobeans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. Dispute Resolution Panel (DRP in short) u/s.144C(5) of the Act dated 21/11/2016 25/09/2017 respectively for the A.Y.2012-13 2013-14 respectively. 2. At the outset, we find that both these appeals were already disposed of by this Tribunal in ITA Nos.1456 7271/Mum/2017 dated 10/04/2019 by passing an elaborate order. Later, a Miscellaneous Application was filed by the assessee on the ground that ground Nos. 18 19 for A.Y.2012-13 and ground Nos. 5-10, 11-17,23,24 and 26 for A.Y.2013-14 were not adjudicated by this Tribunal. Accordingly, the Miscellaneous Applications preferred by the assessee were disposed of in M.A. No.364/Mum/2019 for A.Y.2012-13 and M.A. No.412/Mum/2019 for A.Y.2013-14 dated 13/12/2019. In the said Mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid decision of this Tribunal in assessee s own case for A.Y.2016-17, we direct the ld. TPO to grant working capital adjustment while determining the ALP of provision of marketing support related services to Red Hat US. The ground No.18 raised by the assessee for A.Y.2012-13 is allowed for statistical purposes. 5. Let us now take up the appeal for A.Y.2013-14. The ground Nos. 5-10 are to be adjudicated as stated supra. 6. The ground No.10 raised by the assessee is seeking working capital adjustment in respect of provision of software development services. This issue is already been decided by us in A.Y.2013-14. We find that assessee had furnished the workings for working capital adjustments before the ld. TPO vide page Nos.371 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of software and details regarding the nature of services rendered from which revenue has earned is not available in the annual report. The assessee is purely into software development for its AEs, Whereas from the website of Infobeans Technologies Ltd., it is observed that the said comparable company is engaged in developing business applications for web and mobile and further engaged in automation engineering and big data analytics. Accordingly, it was pleaded that the said company is functionally dissimilar with that of the assessee. Further, it was also brought to our attention that during the year, demerger of the business of the assessee company has been approved and sanctioned by the Hon ble Madhya Pradesh High Court vide order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recedent hereinabove, we direct the ld. TPO to exclude Infobeans Technologies Ltd., from the final list of comparables. 7.3. Exclusion of Ingenuinity Gaming Solutions : We find that the ld. TPO had considered this company as a good comparable on the basis that it is engaged in provision of software development services. The ld. AR before us submitted that on perusal of the annual report of the said comparable company, it is not clear as to what kind of software development services are performed by this comparable company and from the perusal of the website of the said comparable company, it was observed that the said company is mainly engaged in providing complete software solutions to the gaming industry; it develops customized gami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleaded that the said company is engaged in diversified activities in the IT gaming space whereas assessee is into routine software development services thereby making it functionally not comparable. It was pleaded that the said company also deals in inventories which indicates that the said companies revenue stream includes sale of products even though it is not mentioned specifically in the financial statements. The ld. TP however, did not heed to the contentions of the assessee and included the same in the list of comparables. The ld. DRP while upholding the action of the ld. TPO observed that the said company is engaged only in software development and the outcome is in terms of games. The said company is not deriving any income from sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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