9911796707
TMI Blog2024 (7) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... chnical documentation etc. We are of the opinion that the services provided by the assessee company are routine services whereas Nihilent Limited is providing services which are in the area of transformation of the enterprises and change management which are quite different from the services provided by the assessee. Thus, we are of the opinion that Nihilent Limited cannot be used as a comparable to the assessee. We direct the Ld. TPO/AO to exclude this company from the set of comparables. - SHRI AMIT SHUKLA, JUDICIAL MEMBER SHRI GAGAN GOYAL, ACCOUNTANT MEMBER For the Appellant : Shri Ajit R. Jain a/w Siddesh Chaugule For the Respondent : Shri K.C. Selvamani ORDER PER AMIT SHUKLA (J.M): 1. The aforesaid appeal has been filed by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business solution design, software design, software development/ implementation/support services, project management, software QA, software support services, technical documentation etc. During the year under consideration the assessee has provided IT Support Services to the extent of INR 38,42,36,166/- to its associated enterprises. As mentioned by the Ld. TPO in his order, the assessee has earned a markup of 15% on the cost. The assessee has used Transactional Net Margin Method (TNMM) as the most appropriate method to benchmark its international transaction with OP/OC as the PLI. The assessee has selected 6 comparables with a median of 12%. Ld. TPO rejected 4 companies out of 6 and accepted only 2 companies viz. (i) CG CAK Software Export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following companies as the final comparables- Sr. No. Name of the Company Selected by Margin 1 Evoke Technologies P. Ltd Assessee in fresh search 4.30 2 CG VAK Software Exports Ltd. Assessee in TPSR 10.41 3 Harbinger System Pvt. Ltd Assessee in fresh search 12.90 4 Rheal Software Pvt. Ltd Assessee in fresh search 15.29 5 RS Software India Ltd. Assessee in TPSR 21.14 6 Nihilent Ltd. TPO out of Assessee s fresh search 25.59 7 Infobeans Technologies Ltd. TPO out of Assessee s fresh search 33.42 8 Thirdware Solutions Ltd. TPO out of Assessee s fresh search 39.90 9 Cybercom Datamatics Information Solutions Ltd. TPO out of Assessee s fresh search 84.37 35 th percentile 15.29 Median 21.14 65 th percentile 25.59 7. On the basis of above-mentioned l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this company is not comparable to the assessee and ought to be excluded. 9.2 Infobeans Technologies Ltd. It is submitted that this company is engaged in diversified and dissimilar activities and no segmental accounts are available. Reference is made to Page No.2533 of the Factual Paper book to demonstrate that Infor beans is engaged into Business IT services (CAD) application development and maintenance, Big Data, UX and UI, Automation engineering services, Including product engineering and lifestyle solutions and business process management. Further the Functions are divided into four verticals viz. storage and virtualization, media and publishing, HR and Payroll; and e- commerce. Further reference has been made to Page No.2566 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivities and there is a lack of segmental data. Reference is made by the Ld. AR to Page 2838 of Factual Paperbook to show that as per the Annual report of Cybercom, functions predominantly performed by the company for telecom and other industries and acts as consultant and advisory on information/ internet system and surveyors of information system. It also carries the business development, testing, implementation, migration of application, marketing and manufacturing of IT products and services, software and hardware system and embedded technologies. It is argued that this goes to prove that the said comparable is into diversified activities, high end services provider in the information technology sector for which segmental data is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. Thus, we are of the opinion that Nihilent Limited cannot be used as a comparable to the assessee. We direct the Ld. TPO/AO to exclude this company from the set of comparables. 12. During the course of hearing before us, we raised a query to the Ld. AR that in case we decide on the first comparable viz. Nihilent Limited in favor of the assessee, what would be the outcome. Ld. AR fairly submitted that the whole adjustment would get deleted even if only Nihilent Limited is excluded. However, Ld. AR vehemently submitted that all the 4 companies are not comparable and should be decided by the bench. We are of the opinion that since the entire adjustment is getting deleted by exclusion of only one comparable Nihilent Limited, we need not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
