INFOR (INDIA) PRIVATE LIMITED,HYDERABAD V. DCIT., CIRCLE 2(1), HYDERABAD

ITTPA 1341/HYD/2024

AI Insights

Infor (India) Private Ltd appealed against the final assessment order passed by the Deputy Commissioner of Income Tax, which included upward adjustments to the Arm's Length Price (ALP) determined by the TPO. The Tribunal examined various grounds related to the exclusion and inclusion of comparables in the ALP determination for the assessment year 2021-22. The Tribunal's decision was influenced by precedents in the assessee's own previous cases and other similar cases, leading to the exclusion of several comparables based on turnover and functional dissimilarity. The Tribunal also addressed procedural issues regarding the handling of certain comparables and the need for re-adjudication on specific financial entries and tax treatment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314441 (ITAT-HYDERABAD)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Assessment Year: 2021-2022
• Other Referred Cases: Triniti Advanced Software Labs (P) Ltd vs. Income Tax Officer, iMedx Information Services (P) Ltd vs. DCIT, Benu Networks Packet Switch (P) Ltd vs. ACIT, Chryscapital Investment Advisors (India) (P.) Ltd vs. DCIT, Pentair Water India Pvt. Ltd vs. DCIT, Obopay Mobile Technology vs. ACIT, Rage Frameworks India (P) Ltd vs. ACIT, Mavenir India (P) Ltd vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL MOTI LALA
• Keywords: Set aside; Transfer pricing; International transaction; TDS; Related party transaction

Judgement Text

" ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 1 of 35 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ DB-A ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /IT(TP)A No.1341/Hyd/2024 (िनधाŊरण वषŊ/Assessment Year: 2021-22) Infor (India) Private Ltd Hyderabad PAN:AAACB6197Q Vs. Dy. Commissioner of Income Tax, Circle 2(1) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Advocate Sunil Moti Lala राज̾ व Ȫारा/Revenue by:: Shri B Bala Krishna, CIT(DR) सुनवाई की तारीख/Date of hearing: 04/03/2025 घोषणा की तारीख/Pronouncement: 05/05/2025 आदेश/ORDER Per Madhusudan Sawdia, A.M. : This appeal filed by M/s. Infor (India) Private Ltd (“the assessee”), feeling aggrieved with the final assessment order of Learned Assessing Officer (\"Ld. AO\") passed u/s.143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 ('the Act'), as per the direction of Learned Dispute Resolution Panel-1, Bangalore (“Ld. DRP”) on 29/10/2024 for the A.Y 2021-22. ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 2 of 35 2. The assessee has raised the following grounds of appeal: ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 3 of 35 ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 4 of 35 ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 5 of 35 ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 6 of 35 ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 7 of 35 ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 8 of 35 ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 9 of 35 3. The facts of the case are that, the assessee is a company engaged in the business of providing Software Development Services (“SDS”) and Information Technology Enabled Services (“ITES”), filed its Return of Income (“ROI”) for A.Y. 2021-22 on 28/02/2022 declaring total income at Rs.89,41,06,378/-. In view of the international transactions involved during the year under consideration, for determination of Arm’s Length Price (“ALP”), the case was referred to Learned Transfer Pricing Officer (“Ld. TPO”). The Ld. TPO vide his order ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 10 of 35 dated 19/10/2023 suggested upward adjustment of Rs.63,03,22,708/-. Accordingly, the Ld. AO passed the draft assessment order on 19/12/2023. 4. Aggrieved with the draft assessment order passed by the Ld. AO, the assessee preferred objection before the Ld. DRP. In pursuance to the directions of Ld. DRP dated 13/09/2024, the Ld. AO finalized the assessment on 29/10/2024 by making total addition of Rs.62,68,18,980/- on account of upward adjustment of ALP. 5. Aggrieved with the final assessment order of Ld. AO, the assessee is in appeal before us. 6. The Ld. AR submitted that the assessee is not pressing Ground Nos.1, 2, 5 to 8, 11 to 18 and 23 to 25. Therefore, no separate adjudication is required on these grounds. Therefore, these grounds of the assessee are dismissed being not pressed. 7 Ground No.3 of the assessee is related to exclusion sought by the assessee in SDS segment on account of 19 comparables. However, the Ld. AR submitted that if their claim for exclusion of 13 comparables is accepted by the Bench, then adjudication on other 6 comparables will become academic only. Out of these 13 comparables, the assessee is claiming exclusion of 12 comparables on the ground of variation in turnover and one comparable on the basis of functional dissimilarity. As far as the claim of the assessee regarding exclusion of 12 comparables on ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 11 of 35 the basis of turnover filter is concerned, the Ld. AR submitted that the turnover of the assessee is SDS segment is Rs.536 crores and the turnover of the other 12 comparables are as under: S.No Name of the company Turnover (Rs.) 1 Mindtree Ltd 7,968 crores 2 Sagarsoft (India) Ltd 41 crores 3 LTI Mindtree Ltd 11,562 crores 4 Wipro Ltd 50,299 crores 5 Net4Nuts Ltd 2 crores 6 Systango Technologies Ltd 23 crores 7 CG-VAK Software & Exports Ltd 30 crores 8 Infosys Ltd 85,912 crores 9 Ksolves India Ltd 24 crores 10 Aptus Software Labs Pvt Ltd 8 crores 11 Consilient Technologies Pvt Ltd 4 crores 12 Ezee Technosys Pvt Ltd 18 crores 7.1 Accordingly, the Ld. AR submitted that these comparables are liable to be excluded from the list of comparables as their turnover are significantly vary as compared to the turnover of the assessee. In support of their submission, the Ld. AR invited our attention to the decision of this Tribunal in assessee’s own case for A.Y 2018-19 in ITA-TP No.193/Hyd/2023 dated 26/10/2023, the decisions of this Tribunal in Triniti Advanced Software Labs (P) Ltd vs. Income Tax Officer in ITA No.397/Hyd/2021, iMedx Information Services (P) Ltd vs. DCIT in IT(TP)A No.1755/Hyd/2019 and Benu Networks Packet Switch (P) Ltd vs. ACIT in ITA No.194/Hyd/2021, wherein the Tribunals has held that the turnover filter of 10 times (both upward and downward) is a valid filter to determine the comparability. Therefore, the Ld. AR contended that these 12 comparables should be excluded from the list of comparables as their turnover falls outside the threshold determined by the Tribunal. ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 12 of 35 7.2 Per contra, the Learned Department Representative (“Ld. DR”) objected the exclusion on the basis of turnover filter and submitted that the turnover filter should not be considered in the selection of comparables provided the functional comparability is established. The Ld. DR further argued that, the assessee as well as comparable companies are operating in the field of human sources intensive industry, wherein increase in turnover is accompanied by a corresponding increase in the expenditure. Therefore, mere turnover difference should not be a ground for exclusion, if the core business function remains the same. Finally, the Ld. DR prayed that, these 12 comparables should not be excluded from the list of comparables merely on the ground of significant difference in turnover. 7.3 We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. The primary dispute before us is to decide whether the 12 comparables should be excluded only on the basis of their significant difference in turnover or not. It is well settled by various decision of co-ordinate benches of ITAT, including assessee’s own case for the A.Y 2018-19 (Supra) that the turnover filter of 10 times (both upward and downward) is a valid criteria for determining the comparability. This Tribunal in assessee’s own case for the A.Y 2018-19 (Supra) at para nos. 12 to 14 of the order has held as under : “12. We have considered these contentions in the light of the decided case law. Insofar as the turnover filter is concerned, Hon’ble Delhi High Court in the case of Chryscapital Investment Advisors (India) (P.) Ltd. (supra), held that huge profit or a ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 13 of 35 huge turnover, ipso facto does not lead to its exclusion; whereas in the case of Pentair Water India Pvt. Ltd. (supra), the Hon’ble Bombay High Court held that turnover is a relevant criteria for choosing companies as comparables in determining the ALP in Transfer Pricing cases. Hon’ble Karnataka High Court, however, in the case of Obopay Mobile Technology (supra), having noticed the view taken by the Hon’ble Delhi High Court in the case Chryscapital Investment Advisors (India) (P.) Ltd. (supra), and also the decision of the Hon’ble Bombay High Court in the case of M/s. Pentair Water India Pvt. Ltd. (supra), upheld the Tribunal order excluding certain entities from the list of comparables on the ground of huge turnover, while following the principle that where two views are possible on an issue, the view favourable to the assessee has to be adopted. 13. In these circumstances, following the foot prints of the Hon’ble Karnataka High Court in the case of Obopay Mobile Technology India Private Ltd., (supra), we hold that the turnover is a relevant criteria for choosing companies as comparables in determining the ALP in Transfer Pricing cases. 14. Now turning to the next question as to the appropriate turnover filter, in all the decisions relied upon by the learned AR, a consistent view is taken that the application of tolerance range of turnover of ten times on both sides of assessee’s turnover was proper. Following the same, we direct the learned Assessing Officer to adopt the same for a fresh search. With this view of the matter, we set aside the findings of the authorities below and direct the learned Assessing Officer/learned TPO to take the range of turnover filter at ten times on both the ends and conduct search afresh to take a plausible view. Grounds No. 3 to 8 are accordingly treated as allowed for statistical purposes.” 7.4 On perusal of above, we found that, this Tribunal has categorically held that, companies with proportionate difference in turnover should be excluded and the application of tolerance range of turnover of ten times on both sides of assessee’s turnover was proper. There is no dispute about the fact that the turnover of the 12 comparables clearly breaches the threshold set by this Tribunal in assessee’s own case for the A.Y 2018-19 i.e. the turnover filter of 10 times (both upward and downward). Therefore, in our considered opinion, these 12 comparables cannot be considered as good comparable companies. ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 14 of 35 7.5 With regards the argument of Ld. DR that turnover difference do not impact profitability due to the nature of the business, we find no merit in his contention. It is well accepted principle in Transfer Pricing (“TP”) that companies with significantly different scales of operations face different economic and market condition, which impact their margin, cost structure and pricing strategy. Hence the contention of the Ld. DR is rejected. 7.6 Further, we observe that, the Ld. TPO did not apply the turnover filter of 10 times (both upward and downward) to other comparables as well. Therefore, in the interest of justice, we deem it appropriate to direct the Ld. TPO, to apply the turnover filter uniformly to all the comparables left after exclusion by this order. 8. As far as the exclusion of Tata Elxsi Ltd (“Tata Elxsi”) is concerned, the Ld. AR submitted that though Tata Elxsi is engaged broadly in SDS but is involved in embedded design services and number of other diversified services i.e. industrial training, visualization etc., Further, the Ld. AR submitted that the exclusion of Tata Elxsi is covered by the decision in assessee’s own case for the A.Ys 2014-15 to 2017-18. The Ld. AR further submitted that there is no change in the functionality of Tata Elxsi in the year under consideration as compared to A.Ys. 2014- 15 to 2017-18. Accordingly, the decision held in assessee’s own case for the A.Ys. 2014-15 to 2017-18 regarding exclusion of Tata Elxis Ltd can be squarely applied to the assessee for the year under consideration. ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 15 of 35 8.1 Per contra, the Ld. DR relied on the order of the Ld.AO/TPO and submitted that Tata Elxsi has reported in its annual financial statement revenue from SDS segment only and no segment details are available in their annual report. It means that Tata Elxis is engaged in SDS segment only and therefore, objected the request of the assessee for exclusion of Tata Elxis. 8.2 We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have carefully gone through the decision in assessee’s own case for the A.Ys 2014-15 to 2017-18 and specifically we have gone through Para No.18 to 22 of the order in assessee’s own case (page No.164 to 166) of the paper book for the A.Y 2017-18 in ITA-TP No.228/Hyd/2022 dated 25/08/2022, which is to the following effect: “18. Having considered the findings of the Ld. TPO and Ld. DRP, now we look at the findings of the Tribunal in assessee's own case for the assessment years 2014-15, 2015-16 and 2016-17. In the assessment year 2014-15, the Tribunal considered the comparability of Infosys Limited, Larsen & Toubro Infotech Limited, Tata Elxsi Limited (seg), Persistent Systems Limited, Mindtree Ltd and E-Info Chips Pvt. Ltd and found that such entities are not at all good comparables to the assessee and directed the deletion of the same from the final list of comparables. So also in the assessment year 2015-16, Infosys Limited, Larsen & Toubro Infotech Limited, Tata Elxsi Limited (seg), Persistent Systems Limited, Mindtree Ltd and Cybage Software Private Limited were considered and directed to be deleted. In the same way, for the assessment year 2016-17, the ITA TP No. 228/Hyd/2022 comparability of Infosys Limited, Larsen & Toubro Infotech Limited, Tata Elxsi Limited (seg), Persistent Systems Limited and Cybage Software Private Limited has come up for consideration and the Tribunal directed the exclusion of the same on the ground of non-comparability. 19. In the order dated 06/08/2019 in ITA Nos. 161 and 2307/Hyd/2018 vide paragraph No. 76, the Co-ordinate Bench excluded Infosys Limited, Larsen & Toubro Infotech Limited and Mind ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 16 of 35 Tree Ltd., in the light of the findings of the Hon'ble Delhi High Court in the case of CIT Vs. Agnity India Technologies (P) Ltd., (2013) 36 taxmann.com 289 (Del). Vide paragraph No. 77 of the same order, Tata Elxsi Limited (seg) and Persistent Systems were deleted while following the view taken in assessee's own case for the assessment year 2007- 08. E-Infochips Ltd., is excluded on the ground of super normal profits because, on this ground itself, Infosys Limited, Larsen & Toubro Infotech Limited and Mindtree Ltd., were excluded. 20. In the assessment year 2015-16, by order dated 19/10/2020 in ITA No. 1689/Hyd/2019, the Co-ordinate Bench excluded Infosys Limited, Larsen & Toubro Infotech Limited, Mindtree Ltd, Tata Elxsi Limited (seg), Persistent Systems Limited, and Cybage Software Private Limited on the ground that such entities were considered to be un-fit for comparison with the assessee in assessee's own case for the assessment years 2013-14 and 2014-15 and there was no change in the factual matrix of the case. 21. In ITA No. 198/Hyd/2021 the Co-ordinate Bench of the Tribunal took the view that Infosys Limited, Larsen & Toubro Infotech Limited, Tata Elxsi Limited (seg), Persistent Systems Limited and Cybage Software Private Limited are not at all comparable with the assessee while referring ITA TP No. 228/Hyd/2022 to the orders of the Co- ordinate Bench for the assessment years 2014-15 and 2016-17. 22. A perusal of the orders in Infor (India) Private Limited Vs. DCIT in ITA No. 2307/Hyd/2018 for the AY. 2014-15, Infor (India) Private Limited Vs. ACIT in ITA No. 1689/Hyd/2019 for the AY. 2015-16 and Infor (India) Private Limited Vs. DCIT in ITA No. 198/Hyd/2021 for the AY. 2016-17, therefore, makes it clear that all these seven comparables were found to be not comparable with the assessee consistently for the assessment years 2014- 15, 2015-16 and 2016-17 on the ground of either functional dissimilarity or scales of turnover and profits or non-availablity of segmental information, where it is necessary. All these entities are excluded from the list of comparables from the assessment years 2013-14 to 2016-17 consistently. Learned DR does not plead any change in the factual position for this assessment year from any of the earlier assessment years. Considering the similarly of the facts and circumstances, and respectfully following the consistent view taken by the Co-ordinate Benches in the assessee's own case, we direct the exclusion of Infosys Limited, Larsen & Toubro Infotech Limited, Tata Elxsi Limited (seg), Persistent Systems Limited, Mindtree Ltd, Cybage Software Private Limited and E-Info Chips Pvt. Ltd from the list of final comparables.” 8.3 On perusal of above, we found that, this Tribunal has directed the Ld. AO/TPO to exclude Tata Elxis from the list of final ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 17 of 35 comparables. Further, no evidences with regards to the change of functionality of Tat Elxis in the year under consideration as compared to A.Y. 2017-18 have been brought to our notice by the Revenue. Therefore, respectfully following the order of this Tribunal, we also hold that Tata Elxis is not comparable as far as the assessee is concerned. Accordingly, we direct the Ld. AO/TPO to exclude Tata Elxis from the set of final comparables. 9. As we have decided the exclusion of 13 companies in favour of the assessee, as submitted by the Ld. AR, the adjudication on exclusion of other 6 companies are academic in nature and therefore, we do not propose to adjudicate on the exclusion of those 6 companies. 10. Accordingly, ground no.3 of the assessee is partly allowed. 11. Ground No.4 of the assessee is related to inclusion of 12 comparables in the final list of comparable in SDS segment. However, the Ld. AR had submitted that, if their request for exclusion of 13 companies in accordance with Ground No.3 are accepted, then adjudication of Ground No.4 will become academic only. As we have already decided the exclusion of 13 companies in accordance with Ground No.3 in favour of the assessee, the adjudication on the issue of inclusion of 12 companies as per Ground No.4 will be academic only. Accordingly, we do not propose to adjudicate Ground No.4 of the assessee. ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 18 of 35 12. Ground No.9 of the assessee relates to ITES segment, where the assessee is seeking exclusion of 12 comparables. However, in the Bar, the Ld. AR submitted that they are pressing for exclusion of only 7 comparables viz. Infosys BPM Ltd. (“Infosys BPM”), Sutherland Global Services Private Ltd. (“Sutherland”), Inteq BPO Services Private Ltd. (“Inteq BPO”), Integra Software Services Private Ltd. (“Integra”), Vitae International Accounting Services Private Ltd. (“Vitae”), Interactive Manpower Solutions Private Ltd. (“Interactive”) and MPS Ltd. (“MPS”). The assessee is seeking the exclusion of Infosys BPM, Sutherland and Inteq BPO on the basis of turnover filter and seeking the exclusion of Integra, Vitae, Interactice and MPS on the ground of functional dissimilarity. 13. As far as the exclusion of Infosys BPM, Sutherland and Inteq BPO are concerned, we found that, the turnover of the assessee in ITES segment is Rs. 71 crores and the turnover of Infosys BPM, Sutherland and Inteq BPO are Rs. 5450 crores, 1722 crores and Rs. 2.5 crores respectively, which falls outside the limit of turnover filter of 10 times (both upward and downward) of the assessee. We have decided the identical issue in this appeal at para No. 7 to 7.6 of this order. Therefore, our discussion and finding at para No. 7 to 7.6 of this order will apply mutatis mutandis here also. Hence, we hold that Infosys BPM, Sutherland and Inteq BPO are not comparable to the assessee. Accordingly, we direct the Ld. AO/TPO to delete Infosys BPM, Sutherland and Inteq BPO from the list of comparables. Further, we also grant liberty to the Ld. TPO to apply the turnover filter ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 19 of 35 uniformly to all the comparables and carryout the necessary verification. 14. As far as the exclusion of Integra is concerned, the Ld. AR submitted that Integra is engaged in Accounting, Health and E- Publishing services and therefore, are not functionally comparable to the assessee. In support of their submission, the Ld. AR invited our attention to Page Nos. 2332 to 2334 & 2337 forming part of the annual financial statements of Integra and demonstrated that Integra is involved in Accounting, Health and E-Publishing services. As far as the exclusion of Vitae is concerned, the Ld. AR submitted that Vitae is engaged in Accounting, Auditing & Services and therefore, is not functionally comparable to the assessee. In support of their submission, the Ld. AR invited our attention to Page Nos. 2356 to 2359 forming part of the annual financial statements of Vitae and demonstrated that Vitae is involved in Accounting, Auditing & Book keeping Services. As far as the exclusion of MPS is concerned, the Ld. AR submitted that MPS is engaged in content development and transformation and therefore, is not functionally comparable to the assessee. In support of their submission, the Ld. AR invited our attention to Page Nos. 2376 to 2382 of the paper book forming part of the annual financial statements of MPS and demonstrated that MPS is involved in content development and transformation. The Ld. AR further invited our attention to Para No.6 of the decision of the Coordinate Bench of the Tribunal in the case of Rage Frameworks India (P) Ltd v/s ACIT in ITA No.674/PUN/2022 dated 05/01/2023 and submitted that the Tribunal has held that ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 20 of 35 Integra, Vitae and MPS are not comparable for ITES segment. Accordingly, the Ld. AR prayed to exclude Integra, Vitae and MPS from the set of comparables. 14.1 The Ld. DR, on the other hand, relied upon the decision of the Ld. AO/TPO. The Ld. DR further submitted that ITES is an umbrella and all the information technology services are fall under the broad concept of ITES. Only due to insignificant variations in the nature of services, the company should not be excluded from the segment of ITES. 14.2 We have heard the rival contentions and gone through the records in the light of the submissions made by either side. We have gone through the Page Nos. 2332 to 2334 & 2337 of the paper book forming part of the annual financial statement of Integra and found that, Integra is engaged in Accounting, Health and E- Publishing services. We have also gone through Page Nos. 2356 to 2359 forming part of the annual financial statements of Vitae and found that Vitae is involved in Accounting, Auditing & Book keeping Services. We have also gone through Page Nos. 2376 to 2382 of the paper book forming part of the annual financial statements of MPS and found that MPS is involved in content development and transformation. We have also gone through Par No.6 of the decision of the Coordinate Bench of the Tribunal in the case of Rage Frameworks India (P) Ltd v/s ACIT (Supra), which is to the following effect: “6. We now proceed to deal with the assessee’s ground no.2.1 seeking to exclude the foregoing comparable companies in its Information Technology Enabled Services [in short “ITES”] segment. It ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 21 of 35 emerges during the course of hearing that this tribunal’s recent coordinate bench’s order in Schlumberger India Technology Centre (P.) Ltd. vs. DCIT [2022] 142 taxmann.com 243 (Pune-Tribunal) has already excluded M/s. Manipal Digital Systems Private Ltd., Domes e-Data Private Ltd., and MPS Ltd., i.e. three of the above comparable entities as not functioning in “ITES segment”. The other entities included by the learned lower authorities i.e., Vitae International Accounting Services Private Limited, Access Healthcare Services Private Limited and Integra Software Services Private Limited are also found to be not engaged in the assessee’s segment since they have been carrying-out their business activities and deriving revenues from accounting, healthcare services and e-publishing services, respectively and, therefore, do not have even broader comparability in the segment in issue before us. This is indeed coupled with the fact that M/s. Integra Software Services Private Limited had undergone a merger scheme with M/s. Integra Infotech Private Limited as per the National Company Law Tribunal’s [in short “NCLT”] order to this effect in the relevant previous year. Faced with the situation, we direct the learned Transfer Pricing Officer [in short “TPO”] to exclude all the instant six comparables and compute the assessee’s arm’s length price [in short “ALP’] adjustment accordingly.” 14.3 On perusal of the above, we found that, the Coordinate Bench of the Tribunal in case of Rage Frameworks India (P) Ltd v/s ACIT (supra) held that Integra, Vitae and MPS are not comparable to the company engaged in ITES. Further, no contradictory evidence has been produced by the Revenue before us. Therefore, we hold that Integra, Vitae and MPS are not comparable to the assessee. Accordingly, we direct the Ld. AO/TPO to exclude Integra, Vitae and MPS from the set of comparables. 15. As far as the exclusion of Interactive is concerned, the Ld. AR submitted that Interactive is engaged in Offshore recruitment and staffing solutions, and therefore, is not functionally comparable to the assessee. In support of their submission, the Ld. AR invited our attention to Page Nos. 2370 & ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 22 of 35 2374 of the paper book forming part of annual financial statements of Interactive and demonstrated that Interactive is involved in Offshore recruitment and staffing solutions. The Ld. AR further invited our attention to Para No.32 of the decision of the Coordinate Bench of the Tribunal in the case of Mavenir India (P) Ltd vs. DCIT in ITA No.801/Del/2021 dated 17/05/2022 and submitted that the Hon'ble Tribunal has held that Interactive is not a suitable comparable for ITES segment. Accordingly, the Ld. AR prayed to exclude Interactive from the set of comparables. 15.1 The Ld. DR, on the other hand, relied upon the decision of the Ld. AO/TPO. 15.2. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through Page Nos. 2370 & 2374 of the paper book forming part of the annual financial statements of Interactive and found that at page no. 2370 it has also been mentioned that Interactive is engaged in Support services in the category of executive/retained search service. In our view, the services are in the nature of ITES and therefore are not subject to different risks and returns. Further, we have also gone through Para No.32 of the decision of the Coordinate Bench of the Tribunal in the case of Mavenir India Pvt Ltd vs. DCIT vs. DCIT(Supra) , which is to the following effect: “32. On a perusal of the annual report of the company placed in the paper book, it is noticed that this company provides offshore recruitment and staffing solutions. These activities of the company certainly cannot be compared to the sales and post sales services provided by the assessee. It is also observed that ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 23 of 35 the company has reported huge increase in its profit margin. Therefore, without properly analyzing the factors leading to abnormal increase in profit margin, it would not be safe to include this company as a comparable. In any case of the matter, fact remains that the company is functionally dissimilar to the assessee. For this reason alone, it cannot be included as comparable.” 15.3 On perusal of the above, we find that the Coordinate Bench of the Tribunal in case of Mavenir India Pvt. Ltd vs. DCIT (Supra) held that Interactive is not comparable due to the reason that Interactive was not engaged in sales and post sales services. It has not been held that Interactive is not comparable due to the reason that Interactive was not engaged in ITES. Therefore, the decision the Tribunal in case of Mavenir India Pvt. Ltd vs. DCIT (Supra) is not applicable in the case of the assessee. 15.4 In view of the above discussion, we are of the considered view that Interactive is functionally comparable to the assessee and deserves to be retained in the final list of comparables. Accordingly, the assessee’s plea for exclusion of Interactive from the list of comparables is rejected. 16. Accordingly, ground no. 9 of the assessee is partly allowed for statistical purposes. 17. In ground No.10, the assessee is seeking inclusion of 9 comparables. However, the Ld. AR has submitted that they are pressing inclusion of only 3 comparables i.e. I Services India (P) Ltd (“I Services”),Thomson Reuters International Services (P) Ltd, (“Thomson”) and Global Healthcare Billing Partners (P) Ltd ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 24 of 35 (“Global Healthcare”). As far as the inclusion of I Services is concerned, the Ld. AR invited our attention to para no. 2.49.1 of page No.108 of the order of the Ld. DRP and submitted that the Ld. DRP has excluded I Services inadvertently on the basis of FAR analysis of another company i.e. Virinchi Ltd. The Ld. AR also invited our attention to relevant part of rectification application placed at page No.1346 to 1348 of the paper book and submitted that, the rectification application in this regard is pending before the Ld. DRP. The Ld. AR also invited our attention to the order of the Ld. DRP for A.Y 2017-18(para no.2.63), A.Y 2018-19(para no. 2.58) and A.Y 2020-21(para no. 2.42.1 to para no.2.42.3) placed at page Nos.1853/1854,2676 and1686 respectively of the paper book and submitted that in all these years, the Ld. DRP has included I Services as comparable to the assessee. Finally, the Ld. AR prayed before the Bench to include I Services in the list of comparables. In their alternate submission, the Ld. AR prayed before the Bench to make suitable direction to the Ld. DRP to dispose of their rectification application. 17.1 Per contra, the Ld. DR has submitted that they have no objection, if the issue is set aside to the Ld. DRP for fresh adjudication. 17.2 We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through Page No.108 and the order of the Ld. DRP which is to the following effect: ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 25 of 35 ‘2.49.1 Having considered the submissions, on perusal of annual report and data from website, we note that the principal business activities of the company is engaged in IT enabled services (ITES). Thus, it fails FAR analysis filter,. Extract of the same is reproduced hereunder: VIRINCHI Standalone Notes and other explanatory information to financial statements for the year ended 31 March: 1. Corporate Information Virinchi Limited India (“Virinchi”) is an IT products and services company offering customized solutions to companies across the globe since 1990. Virinchi is a publicly held company listed on the BSE (IP) one of India’s largest stock exchanges since the year 2000 Virinchi has developed and retained IP in several software products operating in supply than alternate management, attainable financial services, however has had limited services in offering most of the solutions barring the software product for financial services where Virinchi has reached leadership position considering the market share of this niche industry. The organization is led by First Generation Business Enterprises and operates out of its Corporate Office at Banjara Hills, Hyderabad, India & US Head Quarters at Marit Boze, New Jersey.” 17.3 On perusal of the above, we found that, the Ld. DRP on the basis of annual report extract of Virinchi Ltd excluded I Services from the list of comparables. Accordingly, in our view, there is an apparent mistake on the part of the Ld. DRP. We have also gone through the relevant part of the rectification application placed at page nos.1346 to 1348 of the paper book and found that the assessee has filed rectification application before the Ld. DRP for rectification of the said mistake. As there is apparent mistake on the part of the Ld. DRP and the rectification application of the assessee is pending before the Ld. DRP, we direct the Ld. DRP to ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 26 of 35 pass appropriate order as per law after considering the rectification application of the assessee. 18. As far as inclusion of Thomson is concerned, the Ld. AR invited our attention to page Nos.129 & 130 of the order of the Ld. TPO and submitted that the Ld. TPO has rejected Thomson on the ground that Thomson was not forming part of the search Matrix of the TPO and inclusion of Thomson would lead to cherry picking. The Ld. AR further invited our attention to page No.113 of the order of the Ld. DRP, wherein the Ld. DRP inadvertently rejected the inclusion of Thomson on the ground that Thomson fails RPT filter as per the order of the TPO and the assessee did not provide bifurcation of related party figures of cost and revenue. Accordingly, the Ld. AR submitted that, there was an apparent mistake in the order of the Ld. DRP. Therefore, the assessee filed rectification application before the Ld. DRP for which the Ld. AR invited our attention to the relevant para of the rectification application placed at page Nos. 1351 and 1352 of the paper book. Finally, the Ld. AR prayed before the Bench to make suitable direction to the Ld. DRP to dispose of their rectification application. 18.1 Per contra, the Ld. DR submitted that they have no objection, if the issue is set aside to the Ld. DRP for fresh adjudication. 18.2 We have heard the rival contentions and also gone through the record in the light of the submissions made by either ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 27 of 35 side. We have gone through page Nos.129 & 130 of the order of the Ld. TPO, which is to the following effect: “3. Thomson Reuters International Services (P) Ltd and NGA HR TPO Remarks: Assessee requested to include these comparables in the final set which were rejected b y the TPO as not forming party of search universe. In this respect it is pointed out that the application of quantitative filters during search process removes the element of subjectivity in such process and if the same is not done, the TPO will simply cherry-pick companies having higher margins or assessee will simply suggest companies with lower margins and the sanctity of the whole process will be lost. It is also important to note here that the cohort of companies resulting from application of filters is just a sample that is representative of the general population of the companies for that segment, and it does not mean that there are no adequately comparable companies outside that cohort. However, if a manual selection of such companies is allowed to either TPO or the assessee, it will certainly result into cherry-picking and the sanctity of the whole process will be lost. Accordingly, the argument on manual selection of companies without following the serial application of filters is being rejected as the same is prone to extreme cherry-picking”. 18.3 We have also gone through Page No.113 of the order of the Ld. DRP, which is to the following effect: “11. Thomson Reuters International Services (P) Ltd Fails RPT Filter. 2.56.2 In this respect, the panel notes that the assessee has not provided and substantiated the related party costs separately on the revenue side and cost side. 2.56.3 The assessee in the submissions has only provided the Total Related Party transactions and has not provided any bifurcation of cost and revenue fractions and also thereafter not provided how it arrived at the % of RPT of Revenue and costs. Hence, the submissions of the assessee ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 28 of 35 are devoid of any merit and rejected. Thus, the panel do not find any contention with the TPO’s approach. Accordingly, the objection raised by the assessee is hereby rejected. Ground rejected.” 18.4 On perusal of the above we find that, the Ld. TPO has rejected Thomson on the ground that Thomson was not forming part of the search matrix of the TPO and inclusion of Thomson would lead to cherry picking. However, the Ld. DRP rejected the inclusion of Thomson on the ground that Thomson fails RPT filter as per the order of the TPO and the assessee did not provide bifurcation of related party figures of cost and revenue. Accordingly, in our view, there is an apparent mistake on the part of the Ld. DRP. We have also gone through the relevant part of the rectification application placed at page nos.1351 & 1352 of the paper book and found that the assessee has filed rectification application before the Ld. DRP for rectification of the said mistake. As there is apparent mistake on the part of the Ld. DRP and the rectification application of the assessee is pending before the Ld. DRP, we direct the Ld. DRP to pass appropriate order as per law after considering the rectification application of the assessee. 19. As far as inclusion of Global Healthcare is concerned, the Ld. AR invited out attention to page No.129 of the order of the TPO and submitted that the Ld. TPO has rejected the inclusion of Global Healthcare due to the reason that no income has been reported under “ Total Revenue from sales of services” and the revenue reported under “miscellaneous other operating revenue” is Rs. 116.37 crores of the financial statements of Global ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 29 of 35 Healthcare. The Ld. AR further submitted that, in fact the “ Total Revenue from sales of services” of Global Healthcare is Rs.116.37 crores and the “miscellaneous other operating revenue” is nil. There was a typographical error in the financial statement of Global Healthcare. In support of their submission, the Ld. AR invited our attention to “disclosure of principal product or services” forming part of the annual financial statement of Global Healthcare placed at page No.2460 of the paper book, wherein it has been stated that the revenue from services is Rs.116.37 crores. Accordingly, the Ld. AR has submitted that the ground on the basis of which the Ld. TPO/DRP has rejected Global Healthcare is not correct. Therefore, Global Healthcare should be included in the list of final comparables. 19.1 Per contra, the Ld. DR has submitted that they have no objection, if the issue is set aside to the Ld. AO/TPO for fresh adjudication. 19.2 We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through Page No.129 of the order of the Ld. TPO, wherein the Ld. TPO has rejected Global Healthcare due to the reason that the company is having no revenue from sale of services. We have also gone through the statement of P&L Account of Global Healthcare placed at page No.2462 of the paper book and found that the “Revenue from sale of services” is Rs. Nil and revenue from “other operating revenue” is Rs.116.37 crores. We have further gone through the “disclosure of principal product ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 30 of 35 or services” forming part of the annual financial statement of Global Healthcare placed at page No.2460 of the paper book, which is to the following effect: 19.3 On perusal of the above, we find that the Global Healthcare has revenue from “sale of services” of Rs.116.37 crores. The amount mentioned against the revenue from “sale of services” as Rs. Nil in P&L statement placed at page No.2462 of ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 31 of 35 the paper book seems to be an inadvertent mistake in the P&L statement of Global Healthcare. Therefore, we set aside the issue to the file of the Ld. AO/TPO to verify the correctness of revenue from sale of services and decide the inclusion of Global Healthcare as per law. 20. Ground No.19 of the appeal is related to the management fees, for which the Ld. AR has submitted that, for the A.Ys 2016-17 to 2018-19, this issue has been restored to the file of the Ld. AO/TPO for fresh adjudication. Accordingly, the Ld. AR prayed before the Bench to set aside the issue for this year also to the file of the Ld. AO/TPO for fresh adjudication. 20.1 Per contra, the Ld. DR submitted that they have no objection if the issue is remanded to the file of the Ld. AO/TPO for re-adjudication. 20.2 We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through Para No.17 & 18 of the order of this Tribunal in assessee’s own case for the A.Y 2018-19 in IT(TP) 193/Hyd/2023 dated 26/10/2023 which is to the following effect: ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 32 of 35 ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 33 of 35 20.3 On perusal of the above, we found that, this Tribunal had remanded the issue to the file of the Ld. AO/TPO to re- examine the issue in the light of the findings on this issue in ITA- TP No.198/Hyd/2021. Respectfully following the decision of this Tribunal(supra), we also restore the issue to the file of the Ld. AO/TPO to re-examine the issue in the light of the findings on this issue in accordance with the directions of this Tribunal in assessee’s own case (cited Supra). 21. Ground No.20 of the assessee relates to the Tax Consultation Fee. In this regard, the Ld. AR has submitted that the corresponding evidences related to the claim of Tax Consultation Fees are required to be verified by the Ld. AO/TPO. Accordingly, the Ld. AR prayed before the Bench to set aside the issue to the file of the Ld. AO/TPO for re-adjudication after verification of corresponding evidences. 21.1 Per contra, the Ld. DR submitted that they have no objection if the issue is remanded to the file of the Ld. AO/TPO for re-adjudication. ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 34 of 35 21.2 We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. As submitted by the Ld. AR, the evidences in support of claim of Tax Consultation Fee are required to be verified by the Ld. AO/TPO which require remanding the issue to the file of the Ld. AO/TPO. Since the Ld. DR has no serious objection in setting aside the issue to the file of the Ld. AO/TPO, we set aside this issue to the file of the Ld. AO/TPO with a direction to verify the evidences in support of claim of Tax Consultation Fee and re- adjudicate the issue as per law. 22. Ground Nos.21 & 22 of the assessee is related to the grant of advance tax credit and TDS credit. In this regard, we are of the considered view that if an assessee is eligible under the law for credit on account of legitimate advance tax and TDS, the assessee should not be denied for such credit. Accordingly, we set aside the issue to the file of the Ld. AO/TPO with a direction to verify the entitlement of credit on account of advance tax and TDS and give credit of the same to the assessee as per law. 23. In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the Open Court on 5th May, 2025. Sd/- Sd/- (VIJAY PAL RAO) VICE PRESIDENT (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER Hyderabad, dated 5th May, 2025 Vinodan/sps ITA No ITTPA No 1341 of 2024 Infor India P Ltd Page 35 of 35 Copy to: S.No Addresses 1 Infor (India) (P) Ltd, 7th Floor, The Skyview Tower 10, Survey No,.83/1 Madhapur, Hyderabad 500081 2 Dy CIT, Circle 2(1) 5th Floor, Signature Towers, Opp: Botanical Gardens, Kondapur, Hyderabad 500084 3 Director (International Taxation & Transfer Pricing) Hyderabad 4 DRP Bengaluru, 5 DR, ITAT Hyderabad Benches 5 Guard File By Order "