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TMI Blog2023 (10) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal:- "1. That on facts and circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the adjustment of Rs. 2,01,00,673/- u/s 92C(2) of I.T. Act and directing the TPO to remove the M/s Acentia Technologies Ltd., M/s TCS E-Services Ltd. and M/s TCS E- service International Ltd. from the final list of comparables. 2. That on facts and circumstances of the case the Ld. CIT (A) has erred by relying on the decision of Delhi High Court in the case of M/s. Rampgreen Solutions(P) Ltd. V CIT [2015] 377 ITR 533 (Delhi) without appreciating the facts and circumstances of the case under consideration. 3. That on facts and circumstances of the case the Ld. CIT (A) was legally not justified in holding that loss or profit ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. CIT (Appeals) after considering the submissions of the assessee and the averments of the TPO's order, excluded all these three comparables observing as under:- "4.2.1 I have carefully considered the submissions made by the appellant and have also considered the findings recorded by the TPO in this regard. It is clearly evident from the annual accounts of this company, there has been an extraordinary activity of amalgamation in the year under consideration. M/s. Accentia has amalgamated with M/s Asscent Infoserve. Even the auditors note that owing to amalgamation the financial results of M/s Accentia are not comparable with its results for earlier years. Moreover M/s Accentia is into providing KPO services and even otherwise is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion that this company cannot be selected as a comparable. Moreover, this is also not a comparable in the case of M/s. Mercer Consulting (India) P. Ltd. (supra), which indicates that the TPO therein has excluded it at the outset. In view of this, we direct the Assessing Officer/TPO to exclude this comparable, from the list of comparables selected." As pointed out by the learned counsel for the assessee, there was amalgamation of a company during the relevant year, and the said company, therefore, cannot be considered as comparable due to this extraordinary event which occurred in the relevant year as rightly held by the Tribunal inter alia in the case of Excellence Data Research (P) Ltd. (supra). We, therefore, follow the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly." 4.2.2 Similar view has been expressed by Hon'ble ITAT in other decisions relied upon by the Ld. AR. Respectfully following the above decision the TPO is directed to exclude M/s. Accentia from the final list of comparable companies. 4.2.3 TCS E-Serve International Ltd & TCS E-serve Ltd - These companies have also been selected by the TPO. In this regard, it was submitted by the appellant as under: As regards TCS E-Serve Limited it is submitted that this company provides business process management services in banking and financial services and also renders services comprising transaction processing and technical services. Transaction processing includes processing, collections, customer care and payments in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted that it is engaged in the business of providing Information Technology - Enabled Services (ITES)/Business Processing Outsourcing (BPO) services, primarily to Citigroup entities globally. The Company's operations broadly comprise of transaction processing and technical services. Transaction Processing includes the broad spectrum of activities involving the processing, collections, customer care and payments in relation to the services offered by Citigroup to its corporate and retail clients. Technical services involve software testing, verification and validation of software at the time of implementation and data centre management activities. (refer page 457 of paper book) As such in addition to BPO services this company is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant cannot be made comparable with a company which is engaged in software development and deriving benefit from a big brand like TATA. Precisely for this very reason, Ld. ITAT in case of Equant Solutions India Pvt. Limited (supra) dealing with a case for AY 2010-11 has rejected use of these companies as a comparable by holding as under: "23. TCS E Serve International Ltd, ...... ...... We have considered the rival contention regarding the exclusion of TCS E-service International Ltd. the comparable is engaged in the business of BPO service and provides high-end technology services such as software testing, verification and validation of the software. Therefore, it is functionally dissimilar to the assessee. Further annual repor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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