Appeal details
Counselvise Citation
[2021] 104 COUNSELVISE.COM (IT) 5687 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 year(s) 8 month(s) 25 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-12-2021
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB-A
Assessment Year
2011-2012
Appeal Filed On
27-03-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD ‘A’ BENCH, HYDERABAD. BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L. P. SAHU, ACCOUNTANT MEMBER (Through Virtual Hearing) ITA No.423/Hyd/2016 & C.O. No.25/Hyd/2016 (Assessment Year : 2011-12) Asst. Commissioner of Income Tax, Circle 16(2), Hyderabad. .....Appellant. Vs. M/s. Parexel International (India) Pvt. Ltd. Hyderabad. .....Respondent. PAN AAECP2199N Appellant By : Shri Dhanesh Bafna, C.A. Respondent By : Shri Rajendra Kumar, CIT, (D.R.) Date of Hearing : 17.12.2021. Date of Pronouncement : 23.12.2021. O R D E R Per Shri S.S. Godara, J.M. : This Revenue’s appeal ITA 423/Hyd/2020 and assessee's C.O. No.25/Hyd/2020 arise against the ACIT, Circle 16(2), Hyderabad assessment dt.28.01.2016 framed in furtherance to Dispute Resolution Panel-1 (DRP), Bangalore’s directions in F.No.175/DRP-BNG/2015-16 2 ITA No.423/Hyd/2016 C.O. No.25/Hyd/2016 involving proceedings under Section 144C(5) of Income Tax Act, 1961 (‘the Act’). Heard both the parties. Case files perused. 2. Coming to the Revenue’s sole substantive grievance that the learned DRP has erred in law and on facts inter alia in directing the Transfer Pricing Officer (TPO)/A.O. to exclude eight out of thirteen comparable entities whereby reducing arm’s length price (ALP) adjustment of Rs.4,64,59,132; we note that the corresponding directions under challenge to this effect read as under : -- -- --Space left intentionally-- -- -- 3 ITA No.423/Hyd/2016 C.O. No.25/Hyd/2016 4 ITA No.423/Hyd/2016 C.O. No.25/Hyd/2016 --Space Left Intentionally-- 5 ITA No.423/Hyd/2016 C.O. No.25/Hyd/2016 6 ITA No.423/Hyd/2016 C.O. No.25/Hyd/2016 --Space left intentionally-- 7 ITA No.423/Hyd/2016 C.O. No.25/Hyd/2016 8 ITA No.423/Hyd/2016 C.O. No.25/Hyd/2016 3. Learned department representative vehemently contended during the course of hearing the DRP’s directions have erred in law and on facts in rejecting the foregoing eight entities namely (i) M/s. Acropetal Technologies Ltd. (ii) Cosmic Global Ltd. (iii) Eclerx Services Ltd. (iv) Infosys BPO (v) Informed Technologies Ltd. (vi) Jeevan Scientific Technologies Ltd. (vii) Mastiff Tech P. Ltd. and (viii) TCS E- serve Ltd.; respectively, from the array of comaprables. 4. The assessee has drawn a strong support form the DRP directions extracted above DRP’s remand directions to the A.O./TPO for exclusion of the foregoing eight comparables. It has also filed voluminous paper book regarding each and 9 ITA No.423/Hyd/2016 C.O. No.25/Hyd/2016 every comparable entity as well as various judicial precedences (supra). 5. We have given our thoughtful consideration to rival pleadings and find no merit in the Revenue’s sole substantive grievance. We note at the outset that this tribunal’s co-ordinate bench order in Assessment Year 2009-10 in assessee's case itself has already excluded M/s. Eclerx Services Ltd., M/s. Cosmic Global Limited and Infosys BPO on the ground that they provide KPO services, have different business model(s) since having huge sub- contracting company brand value, diversified activity and other functional dissimilarities; respectively. The Revenue has admittedly not indicated any distinction for the relevant facts in these twin assessment years. 6. The outcome is not different qua the remaining comparables as well wherein we find that M/s.Informed Technologies Ltd. fails revenue filter of 75% applied by the TPO himself. M/s. Jeevan Scientific Technologies Ltd. has also been rejected on the very turnover filter as well as in 10 ITA No.423/Hyd/2016 C.O. No.25/Hyd/2016 light of huge fluctuating margin pinpointing abnormal trend. Same factual position prevails regarding M/s. Mastiff Tech P. Ltd. having bad debts influencing its profit margin thereby reducing them from 21.78% to 2.28% only. We lastly note that M/s. TCS E-Serve Ltd. fails to satisfy the turnover filter which is also found to be catering mainly to M/s. Citi Group having diversified portfolio than assessee's IT Enabled Services segment. Suffice to say, the learned panel has taken due note of all applicable judicial precedents (supra) as well. We thus decline the Revenue’s instant sole substantive grievance as well as the main appeal ITA 423/Hyd/2016. 7. Learned authorized representative invited our attention to the assessee's C.O. No.25/Hyd/2016 that the same stands rendered infructuous in view of our foregoing detailed discussion declining the Revenue’s appeal. Rejected accordingly. No other ground has been pressed before us. 11 ITA No.423/Hyd/2016 C.O. No.25/Hyd/2016 8. This Revenue’s appeal ITA 423/Hyd/2016 is dismissed and assessee's C.O. 25/Hyd/2016 is dismissed as rendered infructuous. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 23rd Dec., 2021. Sd/- Sd/- (L.P. SAHU) (S.S. GODARA) Accountant Member Judicial Member Hyderabad, Dt.23.12.2021. * Reddy gp Copy to : 1. M/s. Parexel International (India) Pvt. Ltd., 11 th Floor, Building No.20, Mindspace, Sundew Properties Ltd., SEZ, Madhapur, Hyderabad-500 081 2. ACIT, Circle 16(2), Hyderabad. 3. Pr. C I T-4, Hyderabad. 4. DRP-1, Bengaluru. 5. DR, ITAT, Hyderabad. 6. Guard File. By Order Sr. Pvt. Secretary, ITAT, Hyderabad.
