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TMI Blog2019 (4) TMI 2128X X X X Extracts X X X X X X X X Extracts X X X X ..... aised in respect of six comparables. This also shows the total nonapplication of mind by the DRP. Order passed by the DRP is cryptic, stereotyped and is without any reasoning. In fact the DRP has followed the reasoning given by the TPO without any discretions of the objections of the assessee in respect of both the segments. We expect the DRP to give a reasoned and cogent finding while dealing with the contention of the assessee with respect to exclusion / inclusion of the comparables. As the order was silent on material aspects, therefore we remand the whole of the TP issue pertaining to inclusion / exclusion to the file of the DRP with a direction to pass a reasoned and speaking order. Appeals of the assessee is allowed for statisti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally quite different from the assessee's functions. 6.8 On a careful consideration, we find that the comparable cases to be included are given in the table below. This is also based on the decision of the Hon'ble ITAT, Bangalore in the 4 cases cited above. The TPO's action is, otherwise, fully justified. The list of cases to be included in this regard is given below: 6.9 On a careful examination of the objections of the assessee in the light of the submissions, we find that they are wellfounded. We, therefore, direct the TPO to include the 8 cases mentioned above as comparable and recalculate the correct transfer pricing adjustment to be made. It was submitted that this appeal is also required to be sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s discussed below : NOTE 1 : An analysis of margins vis-a-vis revenues of Infosys Technologies Ltd. from the year 2000 till 2010 on the basis of data extracted from the Capitaline Database has been made in this regard. The details are tabulated below : As can be seen from the above, though the turnover of the company has increased about 24 times from the year 2000 to 2010 the operating margins have not risen in direct proportion to the rise in the turnover. The margins have been hovering mostly around 40% to 45%. Only meaning thereby that the operating margins are not affected by the scale of the company. Hence, the argument that the companies having large scale of operations have better margins is without an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble ITAT also held that the difference in function and risk level is not acceptable because the assessee has not brought comparables with quantified data. It may also be submitted that in the case of ST MICRO ELECTRONIC S(2011-TlI-63-JTATDEL-TP) the Hon'ble [TAT has upheld the retention of Infosys Technologies Ltd., as a comparable. NOTE-2: The taxpayer's argument that profits derived by Infosys are predominantly pertaining to brand is without any basis. Firstly, the taxpayer has not given any cogent evidence or data to support the presumption that the margins earned by Infosys or any other company in the software industry are affected by the so called brand value. Second, the difference if any, between the taxp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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