Dy. Commissioner of Income Tax, Circle-17(2), Hyderabad V. Virtusa (India) Private Limited (now merged with Virtusa Consulting Services Private Limited), Hyderabad

ITA 1761/Hyd/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7459 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 03-12-2018
• Assessment Year: 2005-2006
• Appeal Filed On: 25-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: Y V S T SAI
• Keywords: Transfer pricing; International transaction; Wholly owned subsidiary

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 1 761 / HYD/201 7 ASSESSMENT YEAR S : 20 0 5 - 06 DY. COMMISSIONER OF INCOME - TAX, CIRCLE 17(2), HYDERABAD. VS. VIRTUSA (INDIA) PVT. LTD., HYDERABAD. PAN AABCV 4077E APPELLANT RESPONDENT A SSESSEE BY: S HRI Y.V.S.T. SAI RE VENUE BY: SHRI RAVI BHARADWAJ DATE OF HEARING: 0 3 / 1 2 / 201 8 DATE OF PRONOUNCEMENT: 11 / 01 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 5 , HYDERABAD, DATED, 2 1/08/201 7 FOR AY 20 05 - 06 . 2. BRIEF FACTS OF THE CASE ARE, ASSESSEE A WHOLLY OWNED SUBSIDIARY OF VIRTUSA INC. USA, AND DERIVES INCOME FROM PROVIDING SOFTWARE DEVELOPMENT AND MAINTENANCE SERVICES TO ITS PARENT COMPANY, FILED ITS RETURN OF INCOME FOR THE AY 2005 - 06 SHOWING INCOME AT NIL, AFTER CLAIMING DEDUCTION U/S 10A FOR RS. 114,281,750/ - . 2.1 SINCE THE INTERNATIONAL TRANSACTIONS ENTERED I NTO BY THE ASSESSEE WITH ITS AE EXCEED ED RS. 5 CRORES, THE AO HAD MADE A REFERENCE TO THE TPO U/S 92CA(1) OF THE ACT. THE TPO VIDE HIS ORDER DATE 31/03/2008, PASSED ORDER U/S 92CA(3) DETERMINING THE ALP OF SUCH INTERNATIONAL TRANSACTIONS ENTERED I.T.A. NO. 1761 /HYD/1 7 VIRTUSA (INDIA) PVT. LTD., HYD. 2 INTO WITH IT S AE, AT RS. (RS. 104,34,80,489 RS. 95,39,59,994) TOWARDS ADJUSTMENT U/S 92CA AT RS. 8,95,20,945/ - . FOR ANALYSING THE ARMS LENGTH MARGIN THE TPO ADOPTED TNMM METHOD AND HAD IDENTIFIED THE FOLLOWING 17 COMPANIES AS COMPARABLES: SL.NO. NAME OF THE COMPANY WC ADJUSTED 1 IGATE GLOBAL SOLUTIONS LD. 1.59% 2 FLEXITRONICS (SEG.) 29.61% 3 GEOMETRIC SOFTWARE SOLUTIONS CO. LTD. 17.67% 4 LANCO GLOBAL SYSTEMS LD. 9.32% 5 LARSEN & TOUBRO INFOTECH LTD. 8.38% 6 RS SOFTWARE (INDIA) LTD. 6.55% 7 SASKEN COMMUNICATION TECH LTD. (SEG.) 13.10% 8 SASKEN NETWORK SYSTEMS LTD. 13.89% 9 TATA ELXSI LTD. (SEG.) 22.78% 10 VISUALSOFT TECHNOLOGIES LTD. (SEG.) 20.06% 11 EXENSYS SOFTWARE SOLUTIONS LTD. 63.42% 12 SANKHYA INFOTECH LTD. 21.11% 13 FOUR SOFT LTD. 21.33% 14 THIRDWARE SOLUTION LTD. 64.56% 15 BODHTREE CONSULTING LTD. 22.34% 16 INFOSYS TECHNOLOGIES LTD. 41.22% 17 SATYAM COMPUTER SERVICES LTD. 27.00% 3. AGAINST THE SAID ADJUSTMENT BY THE TPO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND SUBMITTEDTHAT OUT OF THE SAID 17 COMPARABLES, 10 COMPARABLES 1 TO 10 ARE ACCEPTABLE, BUT, REMAINING SEVEN COMPANIES SELECTED BY THE TPO I.E. SL. NOS. 11 TO 17 OF THE SAID TABLE ARE NOT COMPARABLE TO THE ASSESSEE COMPANY. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) HELD AS UNDER: WITH THESE REASONING, I HOLD THAT SANKHYA INFOTECH LTD., THIRDWARE SOLUTIONS LTD., BODHTREE CONSULTING LTD AND F OUR SOFT LIMITED CAN NOT BE REMOVED FROM THE LIST OF COMPARABLES ON THE BASIS OF ARGUMENT OF DIFFERENT FUNCTIONALITY. ACCORDINGLY, IN COMPLIANCE WITH THE DIRECTION OF HON'BLE ITAT IN RESPECT OF TP ADJUSTMENT OF RS. 63,91,764/ - CLAIMED TO BE RELATING TO VIR TUSA, UK, THE AO /TPO IS DIRECTED TO RE - COMPUTE THE ALP. FROM I.T.A. NO. 1761 /HYD/1 7 VIRTUSA (INDIA) PVT. LTD., HYD. 3 THE SET OF 17 COMPARALES CHOSEN BY HIM; EXENSYS SOFTWARE SOLUTIONS LTD, INFOSYS TECHNOLOGIES LTD AND SAT YAM COMPUTER SERVICES LIMITED ARE TO BE EXCLUDED. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE. 2. THE LEARNED CIT(A) HAS ERRED IN EXCLUDING COMPANIES HAVING HIGHER TURNOVER (INFOYSYS TECHNOLOGIES LIMITE D) WHICH IS CONTRARY TO RULE 10 B (2) WHICH PRESCRIBES COMPARABILITY OF INTERNATIONAL TRANSACTIONS WITH UNCONTROLLED TRANSACTIONS WITH REFERENCE TO FUNCTIONS PERFORMED, ASSET EMPLOYED AND RISK ASSUMED. 3. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT - I) IN SERVICE INDUSTRY THERE IS NO LINK A GE WHATSOEVER BETWEEN THE PROFITS AND THE TURNOVER II) UNLESS AND UNTIL IT IS BROUGHT ON RECORD THAT THE TURNOVER OF SUCH CO MPANIES , HAD UNDUE INFLUENCE ON THE MARGINS, IT IS NOT THE GENERAL RULE TO EXCLUDE THE SAME; THERE IS NO ECONOMI C RATIONALE BACKED UP WITH ANY STATISTICAL ANALY D IS TO SAY THAT HIGHER TURNOVER COMPANIES OR COMPANIES WITH BRAND HAVE BETTER MARGINS THAN LOW TURNOVER COMPANIES; III) IN THE BUSINESS MODEL USED IN SOFTWARE DEVELOPMENT SECTOR IN INDIA. TH E OPERATIONAL SIZE HAS NO IMPACT ON THE PROFIT MARGINS WHEN TNMM IS THE MAM . 6. BEFORE US, THE LD. DR OF THE ASSESSEE FILED WRITTEN SUBMISSIONS, WHICH ARE EXTRACTED AS UNDER: 1. IT IS SUBMITTED THAT AS DESCRIBED IN GROUND NO: 2 AND 3, A COMPA RABLE CANNOT BE EXCLUDED WHEN IT FALLS IN THE DOMAIN OF RULE 10B(2) WHERE THE TRANSACTIONS HAVE TO BE COMPARED WITH REFERENCE TO FUNCTIONS PERFORMED, ASSETS EMPLOYED AND RISKS UNDERTAKEN. IT IS ALSO SUBMITTED THAT IN SERVICE INDUSTRY IN GENERAL AND IT SECT OR IN PARTICULAR, THERE IS NO LINKAGE BETWEEN THE PROFITS AND THE TURNOVER AS CAN BE OBSERVED FROM THE WEAK CORRELATION. IT IS ALSO NOT ESTABLISHED THAT A COMPANY WITH BETTER BRAND OR TURNOVER WOULD COMMAND HIGHER PROFITS. THE PROFIT MARGIN IS BASED ON THE NATURE OF WORK/FUNCTIONS PERFORMED BY THE CONCERNED COMPANY AND THE COSTS INCURRED BY IT. ONCE, THE FUNCTIONS OF TWO COMPANIES ARE BROADLY SIMILAR, THEN A COMPARABLE I.T.A. NO. 1761 /HYD/1 7 VIRTUSA (INDIA) PVT. LTD., HYD. 4 CANNOT BE EXCLUDED ON CONSIDERATIONS OF TURNOVER OR PROFITS. THERE IS NO EVIDENCE IN THE FORM OF ECONOMIC RATIONALE OR STATISTICAL ANALYSIS FOR SUCH EXCLUSION. ALSO IN THE BUSINESS MODEL EMPLOYED BY SOFTWARE SECTOR IN INDIA, THE OPERATIONAL SIZE HAS NO IMPACT ON THE PROFIT MARGINS WHEN TNMM IS ADOPTED AS THE MOST APPROPRIATE METHOD (MAM). 2. IT IS ALSO SUBMITTED THAT THE ISSUE OF ABNORMAL PROFITS, LARGE TURNOVER, BRANDING AND INTANGIBLES, THE ISSUE HAS BEEN SUBJECT MATTER OF DECISION IN VARIOUS CASES INCLUDING THOSE BEFORE HIGH COURTS. THERE ARE SEVERAL DECISIONS HOLDING THAT COMPANIES CANNOT BE REJECTED ON ACCOUNT OF EXTRAORDINARY MARGINS, HIGH TURNOVER, BRANDING OR INTANGIBLES ONCE THEIR FUNCTIONS ARE BROADLY SIMILAR TO THE ASSESSEE. IN THIS REGARD, RELIANCE IS ALSO PLACED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CHRYSCAPI TAL ADVISORS INDIA PVT LTD (IN ITA NO: 417/2014 AND DECISION DATED 27/04/2015) (376 I TR 173 ) WHEREIN THE HON'BLE HIGH COURT HELD AT PARA 33 OF THE DECISION THAT 'IT IS CLEAR THAT EXCLUSION OF SOME COMPANIES WHOSE FUNCTIONS ARE BROADLY SIMILAR AND WHOSE PRO FILE - IN RESPECT OF THE ACTIVITY IN QUESTION CAN BE VIEWED INDEPENDENTLY FROM OTHER ACTIVITIES - CANNOT BE SUBJECT TO A PER SE STANDARD OF LOSS MAKING COMPANY OR AN 'ABNORMAL' PROFIT MAKING CONCERN OR HUGE OR 'MEGA' TURNOVER COMPANY'. RELIANCE IS ALSO PLAC ED ON THE DECISION OF ITAT SPECIAL BENCH DECISION IN CASE OF MAERSK GLOBAL CENTRES (INDIA) PRIVATE LIMITED (TS - 74 - ITAT - 2014 (MUM) - TP), DECISION OF ITAT MUMBAI BENCH IN THE CASE OF WILLIS PROCESSING SERVICES PVT LTD (30 TAXMANN.COM 350) AND CAPGEMINI INDIA PVT LTD (33 TAXAMANN.COM 5). 6.1 RELYING ON THE DECISION OF ITAT IN THE CASE OF MAERSK GLOBAL CENTERS (INDIA) PVT LTD , THE REVENUE STATED AS UNDER: 4. AS CAN BE SEEN FROM ABOVE, ARITHMETIC MEAN BEING THE MEASURE OF CENTRAL TENDENCY AS ADOPTED IN THIS CASE, IT WOULD EVEN OUT THE EFFECT OF COMPARABLES WITH HIGHER AND LOWER MARGINS. IT IS SUBMITTED THAT THE CIT(A) REMOVED THE COMPARABLE MERELY ON THE GRO UND OF HIGH TURNOVER AND DID NOT SPECIFY HOW THE TURNOVER HAD BEARING THE PROFIT MARGIN. IT IS HUMBLY SUBMITTED THAT REMOVAL OF COMPARABLES WHICH PERFORM SIMILAR FUNCTIONS AND WHICH SATISFY ALL FILTERS COULD NOT BE REMOVED MERELY ON THE GROUND OF HIGH TURN OVER BECAUSE SUCH REMOVAL IS I.T.A. NO. 1761 /HYD/1 7 VIRTUSA (INDIA) PVT. LTD., HYD. 5 NOT AUTOMATIC NOR DOES IT HAVE THE SANCTION OF ANY PROVISION OF THE ACT. 5. IN LIGHT OF THE ABOVE, THE APPEAL MAY KINDLY BE ALLOWED.A HUMBLE REQUEST IS ALSO MADE IN THIS REGARD THAT AS THERE ARE DECISIONS OF OTHER COORDINATE BENCHES OF ITAT AND HIGHER COURTS ON THIS MATTER STATING THAT TURNOVER, ABNORMAL PROFITS, BRANDING ETC CANNOT LEAD TO EXCLUSION OF COM PARABLES PER SE AND FURTHER ANALYSIS IS REQUIRED TO EXCLUDE COM PARABLES, IN CASE, HON'BLE ITAT BENCH WANTS TO DIFFER WIT H THE DECISIONS, THE MATTER MAY KINDLY BE REFERRED TO A SPECIAL BENCH. 7. LD. AR OF THE ASSESSEE, ON THE OTHER HAND , RELIED ON VARIOUS CASES INCLUDING THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2007 - 08 IN ITA NO. 1962/HYD/2011. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN ASSESSEES OWN CASE FOR AY 20 07 - 08 (SUPRA), THE COORDINATE BENCH OF THIS TRIBUNAL WITH REGARD TO INFOSYS TECHNOLOGIES LTD., HELD AS UNDER: 2. INFOSYS TECHNOLOGIES LTD. 2.1 THE LEARNED AR OBJECTING TO THE AFORESAID COMPANY BEING TREATED AS COMPARABLE, SUBMITTED THAT NOT ONLY THE TU RNOVER OF THE COMPANY AT RS. 13,149/ - CRORE IS HUGE AS COMPARED TO THE ASSESSEE BUT IT IS A GIANT COMPANY IN THE FIELD ASSUMING ALL RISKS AND IS ALSO FUNCTIONALLY DIFFERENT. IT WAS SUBMITTED THAT THE BRAND INFOSYS COMMANDS A PREMIUM IN THE PRICING OF ITS PRODUCTS AND SERVICES DUE TO ITS GOODWILL, REPUTATION AND BRAND VALUE AND ALSO ENGAGED IN DIVERSIFIED ACTIVITIES INCLUDING PRODUCTS, CONSULTANCY AND SOLUTIONS. IT WAS SUBMITTED THAT DUE TO SCALE OF OPERATIONS, INFOSYS ENJOYS ECONOMIES OF SCALE, WHICH RESUL TS IN LOWER COST OF INFRASTRUCTURAL FACILITIES AND OVERHEADS. THEREFORE, THE COMPARABILITY OF ASSESSEE, WHICH IS ONLY CAPTIVE SERVICES PROVIDER TO SUCH A COMPANY CANNOT BE I.T.A. NO. 1761 /HYD/1 7 VIRTUSA (INDIA) PVT. LTD., HYD. 6 MADE. IT WAS SUBMITTED THAT VARIOUS BENCHES OF THE TRIBUNAL HAVE DECLARED INFOSYS AS NOT COMPARABLE ON VARIOUS PARAMETERS TO A CAPTIVE SERVICES PROVIDER AND HAVE DIRECTED FOR EXCLUSION OF THE SAID COMPANY. THE AR RELIED ON THE FOLLOWING CASES: 1. INTOTO SOFTWARE INDIA PVT. LTD., ITA NO. 1196,1197/HYD/10. 2. TRIOLOGY E BUSINESS SOLUTIONS, ITA NO. 1054/BANG/2011. 3. TELCORDIA TECHNOLOGIES INDIA PVT. LTD., ITA NO. 7821/MUM/2011. 4. PATNI TELECOM SOLUTIONS PVT. LTD., ITA NO. 1846/H/12. 5. ADAPTEC (INDIA) PVT. LTD. DCIT, ITA NO. 1801/H/2009 6. CORDYS SOFTWARE INDIA PVT. LTD. VS. ACIT, ITA NO. 1 972/H/11. 7. TRINITY ADVANCED SOFTWARE LABS PVT. LTD. VS. ACIT, ITA NO. 1129/H/2005. 8. DCIT VS. DELOITTE CONSULTING INDIA (P) LTD., 46 SOT 379 (MUM.) 9. AGNITY INDIA TECHNOLOGIES VS. ITO, ITA NO. 3856/DEL/10 10. GENESIS INTEGRATING SYSTEMS INDIA P. LTD., ITA NO. 1231/BANG/2010. 10. BRIGADE GLOBAL SERVICES PVT. LTD., ITA NO. 1449/H/10. 11. FROST & SULLIVAN INDIA PVT. LTD., 50 SOT 517 (MUM.) 2.2 THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE DRP AND TPO IN SO FAR AS SELECTION OF THE AFORESAID COMPANY AS COMPARABLE. 2.3 WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ISSUE OF COMPARABILITY OF INFOSYS TO COMPANIES WHICH ARE MERELY CAPTIVE SERVICE PROVIDER IS NO LONGER RES INTEGRA AS DIFFERENT BENCHES OF THE TRIBUNAL HAVE HELD THAT INFOSYS BEING A GIANT COMPANY AND INTO DIVERSIFIED ACTIVITIES CANNOT BE TREATED AS COMPARABLE. IN A RECENT DECISION IN CASE OF INTOTO SOFTWARE INDIA PVT. LTD., (SUPRA), THE HYDERABAD BENCH WHILE I.T.A. NO. 1761 /HYD/1 7 VIRTUSA (INDIA) PVT. LTD., HYD. 7 CONSIDERING THE COMPARABILITY OF INFOSYS TECHNOLOGIES LTD HELD AS FOLLOWS: 20. WE HAVE HEARD BOTH THE PARTIES. WE FIND THAT INFOSYS TECHNOLOGIES LTD., THOUGH, IS INTO THE SIMILAR BUSINESS OF THE ASSESSEE AS SOFTWARE DEVELOPMENT, CANNOT BE CON SIDERED AS A COMPARABLE TO ANY OTHER COMPANIES WHICH ARE ALSO INVOLVED IN SIMILAR ACTIVITIES. IT IS NOT ONLY A GIANT COMPANY BUT IS ALSO ENGAGED IN DEVELOPMENT OF VARIOUS NICHE PRODUCTS. IT CANNOT BE COMPARED TO THE ASSESSEE IN ANY MANNER. SIMILAR DIRECTIO NS HAVE BEEN GIVEN BY THE TRIBUNAL AT DELHI AND HYDERABAD BENCHES IN THE CASES CITED (SUPRA). 21. IN THE RESULT, WE DIRECT THE ASSESSING OFFICER/TPO TO EXCLUDE THIS COMPANY FROM THE LIST OF COMPARABLES. 2.4 THE HONBLE DELHI HIGH COURT IN A RECENT DEC ISION DTD. 10 TH JULY, 2007 IN CASE OF CIT VS. AGNITY INDIA TECHNOLOGIES PVT. LTD., ITA NO. 1204/2011, AFFIRMED THE ORDER OF ITAT, DELHI BENCH HOLDING THAT BIG COMPANIES LIKE INFOSYS TECHNOLOGIES LTD. CANNOT BE TREATED AS COMPARABLE. FOLLOWING THE RATIO LAI D DOWN AS ABOVE, WE DIRECT THE EXCLUSION OF THE AFORESAID COMPANY FROM THE LIST OF COMPARABLES FOR DETERMINING ALP. 8.1 THE COORDINATE BENCH ALSO OPINED THE SAME VIEWS IN THE FOLLOWING DECISIONS: I) IN THE CASE OF UNITED ONLINE SOFTWARE DEVELOPMENT (INDI A) PVT. LTD., IN ITA NO. 1480/HYD/2010 FOR AY 2005 - 06, VIDE ITS ORDER DATED 24/01/2014, THE COORDINATE BENCH HAS HELD AS UNDER: 14. WE HAVE HEARD SUBMISSIONS OF THE PA RTIES AND PERUSED THE MATERIALS ON RECORD. SO FAR AS INFOSYS TECHNOLOGIES LTD. IS CONCERNED THE ISSUE OF COMPARABILITY OF THE AFORESAID COMPANY HAS BEEN CONSIDERED BY DIFFERENT BENCHES OF THE TRIBUNAL INCLUDING THE HYDERABAD BENCHES. IT IS TO BE NOTED TH AT THE CONSISTENT VIEW OF DIFFERENT BENCHES OF THE TRIBUNAL IS TO THE EFFECT THAT INFOSYS TECHNOLOGIES LTD. BEING A BIG COMPANY IN I.T.A. NO. 1761 /HYD/1 7 VIRTUSA (INDIA) PVT. LTD., HYD. 8 ALL RESPECTS INCLUDING THE RANGE OF TURNOVER IS NOT A COMPARABLE TO SMALL COMPANIES WHICH ARE CAPTIVE SERVICE PROVIDERS HAVIN G CONSIDERABLY LOW TURNOVER. IN FACT, THE HONBLE DELHI COURT IN A JUDGEMENT DATED 10.7.2013 IN THE CASE OF AGNITY INDIA LTD. UPHELD THE DECISION OF ITAT DELHI BENCH IN EXCLUDING INFOSYS TECHNOLOGIES LTD., AS A COMPARABLE IN VIEW OF ITS SIZE. THEREFORE, KEEPING IN TUNE WITH THE CONSISTENT VIEW OF DIFFERENT BENCHES OF THE TRIBUNAL IN RESPECT OF THE AFORESAID COMPANY, WE DIRECT THE AO/TPO TO EXCLUDE THE AFORESAID COMPANY FROM THE LIST OF COMPARABLES. II) IN THE CASE OF INTOTO SOFTWARE INDIA PVT. LTD . IN ITA NO. 1196/HYD/2010 AND OTHERS FOR AY 2005 - 06 AND 2007 - 08, VIDE ITS ORDER DATED 24/05/2013, THE COORDINATE BENCH HAS HELD AS UNDER: 20. WE HAVE HEARD BOTH THE PARTIES. WE FIND THAT INFOSYS TECHNOLOGIES LTD., THOUGH, IS INTO THE SIMILAR BUSINESS OF THE ASSESSEE AS SOFTWARE DEVELOPMENT, CANNOT BE CONSIDERED AS A COMPARABLE TO ANY OTHER COMPANIES WHICH ARE ALSO INVOLVED IN SIMILAR ACTIVITIES. IT IS NOT ONLY A GIANT COMPANY BUT IS ALSO ENGAGED IN DEVELOPMENT OF VARIOUS NICHE PRODUCTS. IT CANNOT BE COMP ARED TO THE ASSESSEE IN ANY MANNER. SIMILAR DIRECTIONS HAVE BEEN GIVEN BY THE TRIBUNAL AT DELHI AND HYDERABAD BENCHES IN THE CASES CITED (SUPRA). CONSIDERING THE ABOVE DECISION, IN OUR VIEW, THE ASSESSEE IS HAVING TURNOVER OF 90.24 CRORES AND TURNOVER OF INFOSYS TECHNOLOGIES LTD. WAS RS. 6860 CRORES, WHICH IS 76 TIMES OF ASSESSEES TURNOVER. THE COMPARISON HAS TO BE ON LEVEL PLAYING. THE BASICS OF COMPARISON A RE THAT OF APPLE TO APPLE, NOT APPLE WITH WATERMELON. FURTHER, IT HAS BRAND VALUE AND HAS ALSO ENGAGED IN DEVELOPMENT OF VARIOUS NICHE PRODUCTS. THEREFORE, R ESPECTFULLY FOLLOWING THE SAID DECISION S , WE UPHOLD THE ORDER OF CIT(A) IN DIRECTING TO EXCLUDE BI G COMPANIES LIKE INFOSYS TECHNOLOGIES LTD. AS COMPARABLE TO THE ASSESSEE COMPANY AND ACCORDINGLY, DISMISS THE GROUNDS RAISED BY THE REVENUE IN THIS REGARD. I.T.A. NO. 1761 /HYD/1 7 VIRTUSA (INDIA) PVT. LTD., HYD. 9 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY , 201 9. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 11 TH JANUARY , 201 9. KV COPY FORWARDED TO: 1. DCIT, CIRCLE 17(2), 9 TH FLOOR, SIGNATURE TOWERS, OPP. BOTANICAL GARDEN, KONDAPUR, HYDERABAD 500 0 84 2 . M/S VIRTUSA (INDIA) PVT. LTD., 6 - 3 - 1192, 3 RD FLOOR, MY HOME, TYCOON, BEGUMPET, HYDERABAD . 3 . CIT (A) - 5 , HYDERABAD 4. PR. CIT 5 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE