Appeal details
Counselvise Citation
[2021] 109 COUNSELVISE.COM (IT) 1894 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-03-2021
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
C
Next Hearing Date
09-02-2021
Assessment Year
2010-2011
Appeal Filed On
08-03-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI. CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.536/BANG/2017 ASSESSMENT YEAR : 2010-11 THE INCOME-TAX OFFICER, WARD-1(1)(2), BENGALURU. VS. M/S ARIBA TECHNOLOGIES INDIA (P) LTD., RMZ ICON, NO.51, PALACE ROAD, BENGALURU-560 052. PAN : AADCA 0918 P APPELLANT RESPONDENT CO NO.91/BANG/2017 (BY ASSESSEE) ASSESSEE BY : SHRI PRADEEP KUMAR, CIT(DR) REVENUE BY : SHRI ALIASGAR RAMPURAWALA, C.A DATE OF HEARING : 09-02-2021 DATE OF PRONOUNCEMENT : 11-03-2021 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT CROSS APPEALS HAS BEEN FILED BY REVENUE AND ASSESSEE AGAINST ORDER DATED 03/11/2016 PASSED BY LD.CIT(A)- 1, BANGALORE FOR ASSESSMENT YEAR 2010-11 ON FOLLOWING GROUNDS OF APPEAL: ITA NO. 536/B/2070 1. THE ORDER OF THE LEARNED CIT(APPEALS), IN SO FA R AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE, IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. CORDORATE TAX ISSUE: PAGE 2 OF 17 ITA NO.536/BANG/2017 CO NO.91/BANG/2017 ( I) THE LD. CIT(A) ERRED IN DIRECTING THE AO TO EXCL UDE EXPENSES INCURRED IN FOREIGN CURRENCY ON TRAVEL ETC., OF RS.1,13,46,602/ - AND COMMUNICATION CHARGES (INTERNET) OF RS.18,10,315/- FROM THE TOTAL TURNOVE R ALSO FOR COMPUTING THE DEDUCTION ALLOWABLE U/S 10A OF THE ACT FOLLOWING TH E RATIO LAID DOWN BY THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF TATA ELXSI LIMITED IN (2012) 349 ITR 98 (KAR), WITHOUT APPRECIATING THE FACT THAT TH ERE IS NO PROVISION IN SECTION 10A THAT SUCH EXPENSES SHOULD BE REDUCED FROM THE ' TOTAL TURNOVER' ALSO, AS CLAUSE (IV) OF THE EXPLANATION 2 TO SECTION 10A PRO VIDES THAT SUCH EXPENSES ARE TO BE REDUCED ONLY FROM THE 'EXPORT TURNOVER'. (II) THE LD. CIT(A) ERRED IN NOT APPRECIATING THE F ACT THAT THE JURISDICTIONAL HIGH COURT'S DECISION IN THE CASE OF TATA ELXSI LIMITED (2012) 349 ITR 98 (KAR) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND AN APPEAL H AS BEEN FILED BEFORE THE HON'BLE SUPREME COURT, HENCE NOT REACHED FINALITY. ALP ADJUSTMENT: (3) SWD SEGMENT: (A)M/S INFOSYS TECHNOLOGIES LIMITED: (I) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN HOLDING THAT M/S INFOSYS TECHNOLOGIES LTD., CANNOT BE TAKEN AS C OMPARABLE, BEING FUNCTIONALLY DIFFERENT, WHEN IT SATISFIES ALL THE Q UALITATIVE AND QUANTITATIVE FILTERS APPLIED BY THE TPO. (II)THE LD.CIT(A) ERRED IN FACT AND IN LAW IN DEMAN DING COMPARABILITY STANDARDS THAT MAY ITSELF DEFEAT THE PURPOSE OF LAW RELATING TO DETERMINATION OF ALP UNDER THE I.T. ACT. (III)THE LD.CIT(A) ERRED IN FACT AND IN LAW IN DEMA NDING THAT A COMPARABLE MAY BE CONSIDERED AS ENGAGED IN SOFTWARE PRODUCT BUSINE SS MERELY BECAUSE IT HAS DEVELOPED SOFTWARE PRODUCT BY FOLLOWING SOFTWARE DE VELOPMENT PROCESS WITHOUT HAVING LEGAL OWNERSHIP ON SUCH SOFTWARE PRODUCT. (B)M/S KALS INFORMATION SYSTEMS LIMITED (I) THE LD. CIT(A) ERRED IN FACT AND LAW IN FOLLOWI NG THE DECISION OF THE HON'BLE ITAT WITHOUT CONSIDERING THE ASSESSEE SPECIFIC INFO RMATION COLLECTED U/S 133(6) OF THE ACT FROM M/S KALS INFORMATION SYSTEMS LTD. W HEREIN IT WAS STATED THAT ABOUT 88% OF ITS TOTAL OPERATING COMES FROM SOFTWAR E DEVELOPMENT SERVICES. (II) THE LD.CIT(A) ERRED IN RELYING ON THE DECISION OF OTHER BENCHES OF ITAT INSTEAD OF DECIDING THE COMPARABILITY OF THESE COMP ANIES ON THE BASIS OF SPECIFIC FACTS BROUGHT ON RECORD BY THE TPO IN THE CASE OF T HE ASSESSEE. (C)M/S TATA ELXSI LTD. (I) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN HOLDING THAT M/S TATA ELXSI LTD., CANNOT BE TAKEN AS COMPARABLE, BEING FUNCTIONALLY DIFFERENT, WHEN IT SATISFIES ALL THE QUALITATIVE AN D QUANTITIES FILTERS ADOPTED BY THE TPO. (II)THE LD.CIT(A) ERRED IN RELYING ON THE DECISION OF OTHER BENCHES OF ITAT INSTEAD OF DECIDING THE COMPARABILITY OF THESE COMPANIES ON THE BASIS OF SPECIFIC FACTS BROUGHT ON RECORD BY THE TPO IN THE CASE OF THE ASS ESSEE. (III)THE LD.CIT(A) ERRED IN FACT AND IN LAW IN DEMA NDING THAT A COMPARABLE MAY BE CONSIDERED ASENGAGED IN SOFTWARE PRODUCT BUSINES S MERELY BECAUSE IT HAS DEVELOPED SOFTWARE PRODUCT BY FOLLOWING SOFTWARE DE VELOPMENT PROCESS WITHOUT HAVING LEGAL OWNERSHIP ON SUCH SOFTWARE PRODUCT. 4. ITES SEGMENT: (ECLERX SERVICES LTD. AND INFOSYS BPO LTD.) PAGE 3 OF 17 ITA NO.536/BANG/2017 CO NO.91/BANG/2017 (I) THE LD.CIT(A) ERRED IN FACT AND IN LAW IN DEMAN DING COMPARABILITY STANDARDS THAT MAY ITSELF DEFEAT THE PURPOSE OF LAW RELATING TO DETERMINATION OF ALP UNDER THE I.T.ACT. (II)THE LD.CIT(A) ERRED IN TRYING TO FIND OUT EXACT REPLICA OF THE ASSESSEE FOR DETERMINING THE ALP BASED ON SUCH REPLICA, EVEN WHE N THE LAW AND THE INTERNATIONAL JURISDICTIONAL JURISPRUDENCE ITSELF R ECOGNIZE THAT THERE CANNOT BE AN EXACT COMPARABLE TO A GIVEN SITUATION, ESPECIALLY W ITH TNMM AS THE MOST APPROPRIATE METHOD. (III)THE LD.CIT(A) ERRED IN FACT AND LAW IN DISREGA RDING THE POSITION OF LAW THAT THERE COULD BE DIFFERENCE BETWEEN THE ENTERPRISES C OMPARED UNDER THE TNMM METHOD THAT ARE NOT LIKELY TO MATERIALLY AFFECT THE PRICE OR COST CHARGED OR THE PROFITS ACCRUING TO SUCH ENTERPRISES. 5. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE LD.CIT(A) BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF APPEAL. CO 91/B/2017 1. THAT THE ORDER PASSED BY THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) - I, BANGALORE ['LEARNED CIT (A)], TO THE EXTENT PREJUDICIAL TO THE RESPONDENT, IS BAD IN LAW AND LI ABLE TO BE QUASHED. TRANSFER PRICING 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN NOT PROVIDING ANY SPECIFIC DIRECTION AND UPHOLDING THE APPROACH OF THE ADDITIONAL COMMISSIONER OF INCOME-TAX, TRANSFER PRICING I ('L EARNED TPO') IN REJECTING THE TRANSFER PRICING ('TP') DOCUMENTATION MAINTAINED BY THE RESPONDENT ON INVOKING PROVISIONS OF SUBSECTION 3 OF 92C OF THE INCOME-TAX ACT, 1961 ('THE ACT') CONTENDING THAT THE INFORMATION OR DATA USED IN THE COMPUTATIO N OF THE ARM'S LENGTH PRICE IS NOT RELIABLE OR CORRECT. 3. THAT THE LEARNED CIT (A) HAS ERRED IN NOT PROVID ING ANY SPECIFIC DIRECTION AND UPHOLDING THE LEARNED TPO'S APPROACH USING DATA AS AT THE TIME OF ASSESSMENT PROCEEDINGS, INSTEAD OF THAT AVAILABLE AS ON THE DA TE OF PREPARING THE TP DOCUMENTATION FOR COMPARABLE COMPANIES WHILE DETERM INING ARM'S LENGTH PRICE, IGNORING THE FACT THAT THIS DATA WAS NOT AVAILABLE TO THE RESPONDENT AT THE TIME OF COMPLYING WITH THE TP DOCUMENTATION REQUIREMENTS. 4. THAT THE LEARNED CIT (A) ERRED IN NOT PROVIDING ANY SPECIFIC DIRECTION AND UPHOLDING THE REJECTION OF COMPARABILITY ANALYSIS IN THE TRAN SFER PRICING DOCUMENTATION UNDERTAKEN BY THE RESPONDENT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT READ WITH THE INCOME TAX RULES, 1962, ('THE RULES') AND IN CO NDUCTING A FRESH COMPARABILITY ANALYSIS AND APPLICATION OF CERTAIN ARBITRARY FILTE RS (I.E., RELATED PARTY TRANSACTIONS TO SALES > 25%, EXPORT EARNING TO SALES > 75%) IN DETE RMINING THE ARM'S LENGTH PRICE IN PAGE 4 OF 17 ITA NO.536/BANG/2017 CO NO.91/BANG/2017 CONNECTION WITH THE INTERNATIONAL TRANSACTIONS OF T HE RESPONDENT, THEREBY REJECTING CRAZY INFOTECH LIMITED AND GOLDSTONE TECHNOLOGIES L IMITED. 5. THAT THE LEARNED CIT (A) ERRED IN NOT PROVIDING ANY SPECIFIC DIRECTION AND UPHOLDING THE LEARNED TPO'S APPROACH FOR APPLYING THE PERSIST ENT LOSS FILTER AND THEREBY REJECTING ALISEC TECHNOLOGIES WHICH IS OTHERWISE FU NCTIONALLY COMPARABLE TO THE RESPONDENT. SOFTWARE DEVELOPMENT SEGMENT 6. THAT THE DECISION OF THE LEARNED CIT (A) IS APPR OPRIATE BASED ON THE FACTS AND IN LAW IN REJECTING INFOSYS LTD SINCE IT HAS PRESENCE OF SIGNIFICANT INTANGIBLES ASSETS AND BRAND AND IS ENGAGED IN PRODUCT DEVELOPMENT AND IS FUNCTIONALLY NOT COMPARABLE TO THE RESPONDENT. 7. THAT THE DECISION OF THE LEARNED CIT (A) IS APPR OPRIATE BASED ON THE FACTS AND IN LAW IN REJECTING KALS INFORMATION SYSTEMS LIMITED S INCE IT IS ENGAGED IN DEVELOPMENT OF PRODUCT AND HAS SIGNIFICANT INVENTORY AND IS FUN CTIONALLY NOT COMPARABLE TO THE RESPONDENT. 8. THAT THE DECISION OF THE LEARNED CIT (A) IS APPR OPRIATE BASED ON THE FACTS AND IN LAW IN REJECTING TATA ELXSI LIMITED SINCE IT IS ENG AGED IN PERFORMING VARIED SERVICES WHICH IS FUNCTIONALLY NOT COMPARABLE TO THE RESPOND ENT. 9. THAT THE LEARNED CIT (A) ERRED IN NOT PROVIDING ANY DIRECTION TO THE CONTENTIONS OF THE RESPONDENT, THEREBY UPHOLDING THE LEARNED TPO'S APPROACH OF INCLUDING ICRA TECHNO ANALYTICS IN THE FINAL LIST OF COMPARABLE CO MPANIES EVEN THOUGH IT IS ENGAGED IN PROVIDING IT SOLUTIONS, ENGINEERING AND BUSINESS PROCESS OUTSOURCING SERVICES WHICH IS FUNCTIONALLY NOT COMPARABLE TO THE RESPOND ENT. 10. THAT THE LEARNED CIT (A) ERRED IN NOT PROVIDING ANY DIRECTION TO THE CONTENTIONS OF THE RESPONDENT, THEREBY UPHOLDING THE LEARNED TPO'S APPROACH OF INCLUDING PERSISTENT SYSTEMS LIMITED IN THE FINAL LIST OF COM PARABLE COMPANIES EVEN THOUGH IT IS ENGAGED IN PRODUCT DEVELOPMENT AND HAS MADE VARIOUS ACQUISITIONS DURING THE RELEVANT YEAR WHICH IS FUNCTIONALLY NOT COMPARABLE TO THE RESPONDENT. 11. THAT THE LEARNED CIT (A) ERRED IN NOT PROVIDING ANY DIRECTION TO THE CONTENTIONS OF THE RESPONDENT, THEREBY UPHOLDING THE LEARNED TPO'S APPROACH OF EXCLUDING AKSHAY SOFTWARE TECHNOLOGIES LIMITED AND CAT TECHNOLOGIES LIMITED FROM THE FINAL LIST OF COMPARABLE COMPANIES EVEN THOUGH THE DETAILS OF REL ATED PARTY TRANSACTION WERE AVAILABLE IN THE FINANCIAL STATEMENTS AND THE COMPA NIES ARE FUNCTIONALLY COMPARABLE TO THE RESPONDENT. 12. THAT THE LEARNED CIT (A) ERRED IN NOT PROVIDING ANY DIRECTION TO THE CONTENTIONS OF THE RESPONDENT, THEREBY UPHOLDING THE LEARNED TPO'S APPROACH OF EXCLUDING LGS GLOBAL FROM THE FINAL LIST OF COMPARABLE COMPANIES EVEN THOUGH THE FINANCIAL STATEMENT WERE AVAILABLE AND IS FUNCTIONALLY COMPAR ABLE TO THE RESPONDENT. IT ENABLED SERVICE SEGMENT 13. THAT THE DECISION OF THE LEARNED CIT (A) IS APP ROPRIATE BASED ON THE FACTS AND IN LAW IN REJECTING ECLERX SERVICES LIMITED SINCE IT I S ENGAGED IN PERFORMING KNOWLEDGE PROCESS OUTSOURCING ('KPO') ACTIVITIES AND IS FUNCT IONALLY NOT COMPARABLE TO THE RESPONDENT. 14. THAT THE DECISION OF THE LEARNED CIT (A) IS APP ROPRIATE BASED ON THE FACTS AND IN LAW IN REJECTING INFOSYS BPO LIMITED SINCE IT IS EN GAGED IN HIGHLY INTEGRATED SERVICES AND HAS PRESENCE OF BRAND AND IS FUNCTIONALLY NOT C OMPARABLE TO THE RESPONDENT. 15. THAT THE LEARNED CIT (A) ERRED IN NOT PROVIDING ANY DIRECTION TO THE CONTENTIONS OF THE RESPONDENT, THEREBY UPHOLDING THE LEARNED TPO'S APPROACH OF INCLUDING ACCENTIA PAGE 5 OF 17 ITA NO.536/BANG/2017 CO NO.91/BANG/2017 TECHNOLOGIES LIMITED AS IT IS ENGAGED IN KPO ACTIVI TIES AND PRODUCT DEVELOPMENT AND FUNCTIONALLY NOT COMPARABLE TO THE RESPONDENT. 16. THAT THE LEARNED CIT (A) ERRED IN NOT PROVIDING ANY DIRECTION TO THE CONTENTIONS OF THE RESPONDENT, THEREBY UPHOLDING THE LEARNED TPO'S APPROACH OF INCLUDING ACROPETAL TECHNOLOGIES LIMITED (SEG) AS IT IS ENGAGED IN PROD UCT DEVELOPMENT AND IS FUNCTIONALLY NOT COMPARABLE TO THE RESPONDENT. 17. THAT THE LEARNED CIT (A) ERRED IN NOT PROVIDING ANY DIRECTION TO THE CONTENTIONS OF THE RESPONDENT, THEREBY UPHOLDING THE LEARNED TPO'S APPROACH OF INCLUDING FORTUNE INFOTECH LIMITED AS IT IS ENGAGED IN DESIGN AND DEV ELOPMENT OF APPLICATION WHICH IS IN NATURE OF IT SERVICES AND IS FUNCTIONALLY NOT COMPA RABLE TO THE RESPONDENT. 18. THAT THE LEARNED CIT (A) ERRED IN NOT PROVIDING ANY DIRECTION TO THE CONTENTIONS OF THE RESPONDENT, THEREBY UPHOLDING THE LEARNED TPO'S APPROACH OF INCLUDING ICRA ONLINE LIMITED (SEG) AS IT IS ENGAGED IN KPO ACTIVI TIES AND IS FUNCTIONALLY NOT COMPARABLE TO THE RESPONDENT. 19. THAT THE LEARNED CIT (A) ERRED IN NOT PROVIDING ANY DIRECTION AND UPHOLDING THE APPROACH OF THE LEARNED TPO APPROACH IN RESPECT OF THE NEGATIVE WORKING CAPITAL ADJUSTMENT GRANTED. CORPORATE TAX 20. THAT THE DECISION OF THE LEARNED CIT(A) IS APPR OPRIATE IN DIRECTING THE AO TO EXCLUDE EXPENSES INCURRED IN FOREIGN CURRENCY TOWAR DS TRAVEL AND COMMUNICATION FROM THE EXPORT TURNOVER AND TOTAL TURNOVER FOR THE PURPOSE OF COMPUTATION OF DEDUCTION UNDER SECTION 10A BY FOLLOWING THE DECISI ON OF HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF TATA ELXSI LIMITED IN (201 2) 349 ITR 98 (KAR). 21. THAT THE RESPONDENT CRAVES LEAVE TO ADD TO AND/ OR TO ALTER, AMEND, RESCIND, MODIFY THE GROUNDS HEREIN ABOVE OR PRODUCE FURTHER DOCUMENTS BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. BRIEF FACTS OF THE CASE ARE AS UNDER 2. ASSESSEE IS A COMPANY AND FILED ITS RETURN OF IN COME FOR YEAR UNDER CONSIDERATION ON 27/09/2010 DECLARING TO TAL INCOME OF RS.1,98,654/-. ASSESSEE IS ALSO CLAIMED DEDUCTIO N UNDER SECTION 10A AMOUNTING TO RS.11,04,58 970/-. THE RET URN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AND SUBSE QUENTLY THE CASE WAS SELECTED FOR SCRUTINY. NOTICES UNDER SECTI ON 143 (2) AND 142 (1) WERE ISSUED IN RESPONSE TO WHICH REPRESENTA TIVE OF ASSESSEE APPEARED FROM TIME TO TIME AND SUBMITTED D ETAILS AS CALLED FOR. PAGE 6 OF 17 ITA NO.536/BANG/2017 CO NO.91/BANG/2017 3. THE LD.AO OBSERVED THAT ASSESSEE HAS ENTERED INT O INTERNATIONAL TRANSACTIONS EXCEEDING RS.15 CRORES A ND ACCORDINGLY THE CASE WAS REFERRED TO TRANSFER PRICI NG OFFICER FOR DETERMINING THE ARMS LENGTH PRICE OF THE INTERNATI ONAL TRANSACTIONS ENTERED INTO BY ASSESSEE. 4. UPON RECEIPT OF REFERENCE UNDER SECTION 92CA, TH E LD.TPO ALLOWED UPON ASSESSEE TO FURNISH ECONOMIC DETAILS O F INTERNATIONAL TRANSACTIONS ENTERED INTO BY ASSESSEE IN FORM 3 CEB. 5. THE LD.AO OBSERVED THAT ASSESSEE HAD FOLLOWING INTERNATIONAL TRANSACTION WITH ITS ASSOCIATED ENTER PRISES: SI. NO. NATURE OF TRANSACTION AMOUNT (IN RS.) 1. RECEIPTS FOR SOFTWARE DEVELOPMENT SERVICES 44,39,90,456 2. RECEIPTS FOR IT ENABLED SERVICES 14,20,98,414 3. REIMBURSEMENT OF EXPENSES - ESOP 19,121,498 4. REIMBURSEMENT OF EXPENSES ESPP 2,45,116 5. PURCHASE OF FIXED ASSETS 98,531 6. REIMBURSEMENT OF EXPENSES ESPP EMPLOYEE CONTRIBUTION 13,42,234 6. THE LD.TPO NOTED THAT ASSESSEE HAS USED TNMM AS MOST APPROPRIATE METHOD AND OP/TC AS THE PLI THEREBY COM PUTING ITS MARGIN AT 15% UNDER SOFTWARE DEVELOPMENT SERVICE SE GMENT AND 18% UNDER I T ENABLED SERVICE SEGMENT. ASSESSEE USED FOLLOWING FILTERS TO SHORTLIST THE CO MPARABLES UNDER BOTH THE SEGMENTS: SL NO FILTER ADOPTED IN TP STUDY 1 COMPANIES WITH A RATIO OF R & D EXPENSES TO SALES O F LESS THAN 3% WERE SELECTED 2 COMPANIES WITH A RATIO OF NET FIXED ASSETS TO SALES LESS THAN 200% WERE SELECTED 3 COMPANIES THAT HAD AVERAGE SALES LESS THAN INR 1 CR ORE WERE REJECTED PAGE 7 OF 17 ITA NO.536/BANG/2017 CO NO.91/BANG/2017 4 COMPANIES WITH NETWORTH LESS THAN ZERO WERE REJECTE D 5 COMPANIES WITH A RATIO OF THE SUM OF ADVERTISING, M ARKETING AND DISTRIBUTION EXPENSES TO SALES OF LESS THAN 3% WERE SELECTED 7. ASSESSEE USED 16 COMPARABLES HAVING 13% AS THE A VERAGE MARGIN FOR SOFTWARE DEVELOPMENT SERVICE SEGMENT AND 15 COMPARABLES HAVING 14% AS AVERAGE MARGIN UNDER ITES SERVICE SEGMENT THEREBY HOLDING THE TRANSACTIONS UNDER BOTH THE SEGMENTS TO BE AT ARMS LENGTH. FOLLOWING WERE THE C OMPARABLES CONSIDERED BY ASSESSEE UNDER BOTH THE SEGMENTS: SOFTWARE DEVELOPMENT SERVICE SEGMENT SL.NO. COMPARABLE COMPANY SWD R MARKUP ON ON TOTAL COST 9% 1. AKSHAY SOFTWARE TECHNOLOGIES LTD - 7% 2. COMPULINK SYSTEMS LTD - 7% 3. F C S SOFTWARE SOLUTIONS LTD 39% 4. GOLDSTONE TECHNOLOGIES LTD 12% 5. L G S GLOBAL LTD 23% 6. LARSEN & TOUBRO INFOTECH LTD 22% 7. MINDTREE LTD 22% 8. P S I DATA SYSTEMS LTD 5% 9. POLARIS SOFTWARE LAB LTD N% 10. RELIANCE INFOSOLUTIONS PVT LTD 1% 11. SASKEN COMMUNICATION TECHNOLOGIES LTD* 13% 12. SYNETAIROS TECHNOLOGIES LTD 21% 13. THINKSOFT GLOBAL SERVICES LTD* 18% 14. ZENSAR OBT TECHNOLOGIES LTD 19% 15. CRAZY INFOTECH LTD. 1% 16. TELEDATA MARINE SOLUTIONS LTD 3% MEAN 13% ITES SERVICE SEGMENT 1. R- COMPARABLE COMPANY - IT ENABLED MARKUP ON TOTAL COST S ERVICES WITHOUT ADIS % A 0 K IN - I LOUSE BPO SERVICES LTD 13% - 2. ADITYA BIRLA MINACS WORLDWIDE LTD 8% 3. CAMEO CORPORATE SERVICES LTD 10% 4. COSMIC GLOBAL LTD 34% 5. DELTA SERVICES (I) PVT LTD 7% 6. INFORMED TECHNOLOGIES INDIA LTD .12% 7. INFOSYS B P 0 LTD 24% 8. K N M SERVICES PVT LTD 14% 9. OPTIMUS GLOBAL SERVICES LTD - 2% 10. SPARSH B P 0 SERVICES LTD 6% PAGE 8 OF 17 ITA NO.536/BANG/2017 CO NO.91/BANG/2017 11. CROSSDOMAIN SOLUTIONS PVT LTD 28% 12. OMEGA HEALTHCARE MANAGEMENT SERVICES 9%. 13. B N R UDYOG LTD 3 8% 14. IN HOUSE PRODUCTIONS LTD 4% 15. TIMEX GROUP INDIA PVT. LTD. 8% MEAN 1 4% 8. DISSATISFIED WITH THE COMPARABILITY ANALYSIS IN THE TRANS- APPRISING STUDY BY ASSESSEE, THE LD.TPO ADOPTED FOL LOWING FILTERS TO REJECT MOST OF THE COMPARABLES SELECTED BY ASSES SEE: COMPANIES WHOSE CURRENT YEAR DATA IS NOT AVAILABLE WERE EXCLUDED. 1 COMPANIES WHOSE SOFTWARE DEVELOPMENT/ IT ENABLED SERVICE REVENUE
