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TMI Blog2023 (3) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... Cybermate Infotech Ltd (-13.71%) and Info drive software Ltd (-17.52%) - Cybermate Infotech Ltd has revenue from operation according to schedule 18 and such is only ITeS segment. Further info drive software Ltd is also from ITeS segment. Accordingly, both are functionally comparable. DR could not show that these companies are not functionally comparable with the assessee. He also could not show anything to support the finding of the learned CIT A. Therefore, we do not have any other alternative but to direct the learned AO/TPO to include both these companies in the comparability analysis. The learned CIT A despite having the annual accounts before him did not comment that why he is upholding the action of the learned transfer pricing officer in excluding the above comparable. - ITA No. 2129/MUM/2021 - - - Dated:- 21-11-2022 - SHRI PRASHANT MAHARISHI, AM AND SHRI SANDEEP SINGH KARHAIL, JM For the Assessee : Shri. Reepal G. Tralshawala. For the Revenue : Shri. Samuel Pitta ORDER PER PRASHANT MAHARISHI, AM: 01. This appeal is filed by Tricom Infotech solutions Limited [ Assessee/ Appellant] for assessment year 2012 13 against the order of The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not accept the benchmarking analysis by the assessee for the reason that according to him, assessee has not considered in profit level indicator revenue, cost and profitability in respect of trading in software, as no segmental accounts were furnished. Further the entire revenue has been shown Under the head income from services. Thus, there is no bifurcation of sale of software in it. if the revenue and cost is considered in respect of Software trading account, the PLI of the assessee would be turning in to a loss of 0.87%. Accordingly, the learned transfer pricing officer the PLI of the assessee would be 8.93%. TPO also made an independent search, by rejecting 3 comparable of the selected by assessee and included 2 comparable, retained 9 comparable companies whose profit level indicator was determined at 21.75%. Accordingly, he determined the adjustment of ₹ 30,913,399/ by passing an order u/s 92 CA (3) of the act on 23/12/2015. Accordingly, the learned assessing officer passed the assessment order u/s 143 (3) read with Section 144C (3) of the IT act 1961 on 4/5/2016 determining the total income of the assessee at Rs 4,78,05,409/ wherein the only adjustment is of tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trading account revenue [sales] works out to ₹ 101,238,355/ and not ₹ 980.38 lakhs. With respect to the cost of sales of software trading is purchase value of ₹ 128,448,338 and out of which the closing stock of Rs. 2,84,48,338 is deducted and therefore the cost of sales is only ₹ 10 crores.Thus there is a profit of Rs 12,38,355/- in software trading. Ld. TPO determined loss. f. On the exclusion of the comparable Aurum software system Ltd, alleging incomplete information by ld. TPO, is incorrect as the same company is available in the database capitaline, and annual accounts are submitted to lower authorities. g. for exclusion of other comparable, no reasons have been given by the learned transfer pricing officer and therefore same deserves to be included. Accordingly, he submitted that the order of the learned transfer pricing officer and so far as the transfer pricing adjustment is considered, the assessment order as well as the appellate order is not sustainable in law. 09. The learned departmental representative vehemently supported the orders of the lower authorities. 010. We have carefully considered the rival contention and peruse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies exclude by the learned transfer pricing officer, we find that Aurum software systems Ltd was excluded by the learned transfer pricing officer for the reason that it did not have complete information. There is no finding that what is the information that is lacking in that comparable. Compared to this, the learned authorized representative submitted that the capitaline database correctly shows the complete information and before us the learned authorized representative has also submitted the annual account of that company placed at page number 255 275 of the paper book for the comparable period i.e. assessment year 2012 13. The learned departmental representative could not show us that what is the incomplete information in such annual account. It was also not denied that it is functionally comparable. The learned CIT A confirmed the action of the learned transfer pricing officer excluding the above company for the reason that the comparable company is predominantly having its operation in India and cannot be a suitable comparable for the assessee because there are international transactions in case of appellant company with its associated enterprises and as such expo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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