M/s Narus Networks P Ltd, Bangalore V. Deputy Commissioner of Income tax, Bangalore

ITA 1631/BANG/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8590 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 22-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAMALADHAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIT KUMAR, JUDICIAL MEMBER IT(TP)A NO.1631/BANG/2014 ASSESSMENT YEARS : 2009-10 M/S. NARUS NETWORKS PRIVATE LIMITED, 2 ND FLOOR, SALARPURIA CAMBRIDGE MALL, 9, CAMBRIDGE ROAD, ULSOOR, BANGALORE 560008. PAN:AACCN2889F VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-12(2), BANGALORE APPELLANT RESPONDENT ASSESSEE BY : SHRI. DHANESH BAFNA, CA REVENUE BY : SHRI KAMALADHAR, STANDING COUNSEL DATE OF HEARING : 22.12.2016 DATE OF PRONOUNCEMENT : 31.1.2017 O R D E R PER LALIT KUMAR, JUDICIAL MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF CIT(A), BANGALORE, PERTAINING TO THE AY 2009-10. IT(TP)A NO. 1631/BANG/2014 PAGE 2 OF 4 2. GROUNDS OF APPEAL ARE AS UNDER: 3. THE LD AR FOR THE ASSESSEE RELIED UPON THE JUDGM ENT OF THE TRIBUNAL IN THE MATTER OF INFINERA INDIA PVT LTD VS ITO IT(TP) NO 1008/2014 DATED IT(TP)A NO. 1631/BANG/2014 PAGE 3 OF 4 30.6.2016 FOR THE EXCLUSION OF THE COMPANY I.E., BO DH TREE CONSULTING LTD. IN THE SAID CASE IT WAS MENTIONED AS UNDER: IN THIS CASE, IT IS NOTED BY THE TRIBUNAL THAT THI S COMPANY IS IN THE BUSINESS OF SOFTWARE PRODUCT AND WAS ENGA GED IN PROVIDING OPEN AND END TO END WEB SOLUTIONS SOFTWAR E CONSULTANCY AND DESIGN AND DEVELOPMENT OF SOFTWARE USING THE LATEST TECHNOLOGY AND THEREFORE THE SAME CANNOT BE CONSIDERED AS COMPARABLE IN THE CASE OF COMPANIE S RENDERINGS SOFTWARE DEVELOPMENT SERVICES AS IN THE PRESENT CASE. THEREFORE I RESPECTFULLY FOLLOWING THE TRIBUN AL ORDER, WE HOLD THIS COMPANY IS ALSO EXCLUDED FROM T HE LIST OF FINAL COMPARABLE. 5. THE READING OF THIS ORDER CLEARLY SHOWS THAT THE COMPANY NAMELY INFINERA WAS ENGAGED IN PROVIDING OPEN AND END TO E ND WEB SOLUTIONS SOFTWARE CONSULTANCY AND DESIGN AND DEVELOPMENT OF SOFTWARE USING THE LATEST TECHNOLOGY WHEREAS BODH TREE CONSULTING LTD WAS PROVIDING SOFTWARE DEVELOPMENT SERVICES, ON ACCOUNT OF THE FUNCTIONALL Y DIFFERENT COMPANIES BODH TREE CONSULTING LTD WAS EXCLUDED FROM THE LIST OF COMPARABLE. 6. IN THE PRESENT CASE, THE ASSESSEE IS ENGAGED IN PROVIDING SOFTWARE DEVELOPMENT SERVICES, AND BODH TREE CONSULTING LTD. , IS ALSO RENDERING THE SOFTWARE DEVELOPMENT SERVICES AND THEREFORE BODH TR EE CONSULTING LTD., CANNOT BE EXCLUDED FROM THE LIST OF COMPARABLE BEIN G FUNCTIONALLY SIMILAR TO THE ASSESSEE. EVEN OTHERWISE, THE OBJECTION RAISED BY THE ASSESSEE TO THE SHOW CAUSE NOTICE BEFORE THE TPO WAS THIS THAT THE MARGINS ARE HIGHLY FLUCTUATING AND THEREFORE, FOR THIS REASON ALSO, TH E JUDGMENT CANNOT BE APPLIED TO THE PRESENT SET OF FACTS. ACCORDINGLY, THIS ISSUE IS DECIDED AGAINST THE ASSESSEE. MOREOVER, THIS COMPANY WAS INCLUDED IN THE LIST OF COMPARABLES ON THE BASIS OF SIMILARITY OF FUNCTIONS IN PREVIOUS YEARS ALSO AND NO OBJECTION WAS RAISED WITH RESPECT TO FUNCTIO NAL DISSIMILARITY TO THAT OF IT(TP)A NO. 1631/BANG/2014 PAGE 4 OF 4 THE ASSESSING COMPANY. IN THIS VIEW OF THE MATTER ALSO, THE CONTENTION OF THE ASSESSEE FOR EXCLUDING THIS COMPANY NAMELY BODH TRE E CONSULTING LTD., IS REQUIRED TO BE REJECTED. WE REJECT THE SAME. 14. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 31 ST JANUARY, 2017. SD/- SD/- (A. K. GARODIA) (LALIT KUMAR) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE. DATED: 31 ST JANUARY, 2017. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.