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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 ..... assessee company. It also owns huge intangible and use of 'Tata Brand, which has definitely benefited this comparable, it is directed to be excluded. No valid reason to interfere with the findings of the ld. CIT (Appeals) in excluding the above comparables from the final list of comparable - Appeal of the Revenue is dismissed. - Shri Shamim Yahya, Accountant Member And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri Tarandeep Singh, Adv.; And Shri Sandeep Yadav, Adv.; For the Department : Shri Manu Chaurasia, Sr. D. R.; ORDER PER C. N. PRASAD, J.M. 1. This appeal is filed by the Revenue against the order of the ld. Commissioner of Income Tax (Appeals)-38 [hereinafter referred to CIT (Appeals)] New Delhi, dated 19.05.2017 for assessment year 2010-11. 2. The Revenue has raised the following subastantive grounds 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 fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 comparable with the appellant which is carrying on BPO Activities. Ld. ITAT in case of Equant Solutions India Pvt. Limited (supra) dealing with a case for Assessment Year 2010-11 has rejected use of this company as a comparable for this very reason by holding as under: We have considered the rival contention. During the year this comparable has been gone into substantial business restructuring resulting into extraordinary circumstances during the FY 2009-10 subsidiary of Ascentia got amalgamated with this company and the figures of the business results for the year ending 31st March 2010. In this case also excluded the figures of amalgamated company and due to which the comparable has high OP by TC margin. The relevant observations of the Tribunal as recorded in para 19.2 of the order passed in the case of Excellence Data Research (P) Ltd. v. ITO 66 SOT 15(URO) (Hyd.); being relevant in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wledge. This is absent in this case of assessee which is low end ITES service provider such as which enables network management and other back office support services performed by assessee which primarily include remote monitoring and maintenance of Equant global network platforms and services, coordination, remote configuration, and implementation of quality customer networking solutions. Therefore this comparable is ordered for its exclusion accordingly. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifurcation of ITES and software development activity for this company. Moreover, TCS E-Serve International Limited also owns substantial amount of intangibles in the form of software licenses and it owns Tata Brand in which company is making payment. (refer page 456 of paper book) Company also has a volatile margin as its profitability has gone up by 173% on account increased in infrastructure. During the course of appellate Ld AR relied upon following decision s to canvass his point on rejection of TCS E-Serve International Ltd. TCS E- serve Ltd. as a comparable: FIL India Business Services (P) Ltd reported in (2016) 70 taxmann.com 42 (Del) Bechtel India (P) Limited reported in (2016) 66 taxmann.com 6 (Del) Equant Solutions India (P) Ltd reported in (2016) 66 taxmann.com 192 (Del). 4.2.4 I have carefully considered the submissions made by the appellant and have also considered the findings recorded by the TPO in this regard. From the annual accounts of these companies it is apparent that in addition to BPO services these companies are also engaged in providing technical services and are therefore functionally dissimilar. Further there is also no segmental b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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