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TMI Blog2023 (8) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... T filter. As the case may be, since the facts has not been analysed by the DRP/TPO, it would not be possible for us to decide the issue of failure of RTP filter at the appellate stage. In the light of the above, we remand the issue back to the file of the Assessing Officer/TPO with a direction to examine the functional similarities / dissimilarity of Capgemeni Business Services India Ltd having regard to the application of RPT filters. Informed Technology India (P) Ltd is deriving revenue from ITES business and is not deriving income from software development - In our view, this is a factual finding which required examination of facts by the lower authorities and therefore, we deem it proper to remand this issue of inclusion of Informed Technologies to the file of TPO with a direction to find out from the record, whether Informed Technologies Ltd derives its revenue only from the BPO or not. Besides that, the learned TPO is also directed to examine the financial profile of the Informed Technologies Ltd and whether this company is functionally similar with the assessee company. Jindal Intellicom Ltd. - The lower authorities on examination has come to the conclusion that this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information technology enabled services by the Appellant which has resulted in transfer pricing addition of Rs. 85,98,023/- and the Hon'ble Dispute Resolution Panel in confirming the same. In doing so, they have grossly erred: A. By rejecting the comparable companies selected/accepted by the assessee on unjustifiable grounds. B. By comparing the assessee with companies which have an entirely different functional and risk profile. C. By applying RPT filter as 25% of total turnover instead of 15% as applied by the assessee. D. By not making suitable adjustments to account for differences in the risk profile of the assessee vis- -vis the comparable Companies. 2. The learned TPO erred by charging notional interest on delayed receipt and balance outstanding from Associated Enterprise which has resulted in a proposed addition of Rs. 23,26,382/-. Under this ground, we have the following specific objections: A. The learned TPO erred by charging notional interest on delayed receipt and closing balance outstanding from associated enterprises without any basis. B. The learned TPO erred by charging notional interest for the entire year under consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... high turnover which is not comparable with the assessee company and is also having strong brand value because of that also this company cannot be compared with the assessee company. 5. On the other hand, the learned DR heavily relied on the order of the lower authorities. 6. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned DRP and the Paper Book filed by the assessee. Admittedly, in the present case, the TPO has applied the export turnover filter of 75% as seen from the record. However, the assessee before us demonstrated that this company fails in the export turnover. In our view, it would be appropriate, if the TPO examine afresh and find out whether this comparable fulfills the export turnover filter or not. Needless to say that the above said exercise shall be carried out by the Assessing Officer / TPO after granting the opportunity of hearing to the assessee. 7. In the result, ground raised by the assessee for exclusion of Infosys BPO is allowed for statistical purposes. Capgemeni Business Services India Ltd: 8. The next comparable is Capgemeni Business Services Ltd. In this regard, our attention was draw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not considered the submissions of the assessee. The reason given by the DRP that this comparable Informed Technologies India Ltd deriving income from two verticals namely software development and ITES and the segmental financial is not available. It was submitted by the learned AR that the Informed Technologies India Ltd is deriving revenue only from the BPO ITES and therefore, it qualifies to be taken as a good comparable. He relied upon the decision of Hyundai India Motors (P) Ltd in this regard for the above said proposition. 12. Per contra, the learned DR relied upon the order passed by the lower authorities. 13. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned DRP and the Paper Book filed by the assessee in detail in the case of Informed Technologies India (P) Ltd. In our view, the grievance of non-consideration of the financials by the TPO are not available as the said financials have been examined by the DRP before which the assessee has preferred this appeal. Nonetheless, the short grievance before is that the Informed Technologies Ltd is deriving revenue from ITES business and is not deriving income from softwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by both the sides, perused the orders of the AO and the learned DRP and the Paper Book filed by the assessee in detail in the case of Jindal Intellicom Ltd. Undoubtedly, the profile of the assessee is required to be examined in the context of the services rendered by the assessee as well as by Jindal Intellicom Ltd. The lower authorities on examination has come to the conclusion that this company is not comparable with that of the assessee as it is into software development and is deriving revenue from call centre. However, the above said aspect has not been examined by the lower authorities. Therefore, we deem it appropriate to remand back this issue to the file of the TPO/Assessing Officer with a direction to examine the financials of the Jindal Intellicom Ltd and whether this comparable is with the assessee or not. Further, the TPO is directed to find out after using its power as available under the law whether this company is earning revenue from the software development services or not. 20. In the light of the above discussions, the TP ground raised by the assessee are decided. It is made it clear that the TPO shall include inclusion/exclusion after affording reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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