MATCHMOVE INDIA PRIVATE LIMITED,BANGALORE V. ASSESSMENT UNIT, INCOME TAX DEPARTMENT AND INCOME TAX OFFICER, WARD 4(1)(3), BANGALORE, BANGALORE

SA 76/BANG/2024

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MatchMove India Private Limited filed a stay petition against the demand of Rs.308,09,610 arising from an assessment order for the assessment year 2021-22. The demand was based on adjustments made by the TPO concerning the Software Development (SWD) services segment and interest on delayed receipt from an Associated Enterprise (AE). The assessee argued that the TPO incorrectly included non-comparable companies in the analysis and failed to apply the upper turnover filter, leading to inflated adjustments. The Tribunal considered the potential impact of the adjustments on the assessee's financials and the discrepancies in the comparability analysis before granting the stay.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 653219 (ITAT-BANGALORE)
• Appeal Type: Stay Application
• Pronouncement Date: 20-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2021-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Application of stay

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER SA No.76/Bang/2024 [in IT(IT)A No.2255/Bang/2024] Assessment year: 2021-22 MatchMove India Private Limited,101 R J Tower, 4th B Cross, 5th Block, Koramangala Industrial Area, Bangalore – 560 095. PAN: AAJCM 8870E Vs. The Income Tax Officer, Ward 4(1)(3), Bangalore. APPLICANT RESPONDENT Applicant by : Shri Nageshwar Rao, Sr. Advocate Respondent by : Shri Swaroop Mannava, Addl.CIT (DR)(ITAT), Bengaluru. Date of hearing : 20.06.2025 Date of Pronouncement : 20.06.2025 O R D E R Per Prashant Maharishi, Vice President 1. This stay petition is filed by Match Move India P. Ltd. [the applicant/assessee] in IT(TP)A No.2255/Bang/2024 for AY 2021-22 where the main appeal is fixed for hearing on 26.6.2025 for stay of demand of Rs.308,09,610 arising out of the assessment order passed by the Assessment Unit pursuant to the directions of the ld. DRP. The ld. TPO has made the adjustment for provision of Software Development (SWD) services segment of Rs.10,25,38,300 of international SP No.76/Bang/2024 Page 2 of 4 transaction of RS.24,40,51,340. The 2nd adjustment is with respect to interest on delayed receipt of outstanding from AE wherein adjustment of Rs.14,40,113 is made. 2. The assesse in the Stay Petition submitted that the segmental accounts of the assesse with respect to platform segment and SWD segment provided by the assessee but were rejected by the ld. TPO and adjustment is made on non-AE and AE transactions, where the adjustment if at all to be made should be only on transaction with AE on SWD segment. It is the claim of the assessee that the margin of the assesse is 17% whereas by taking both the segments together the margin of the assesse turned negative. The ld. AR submitted that the Platform segment revenue is dwindling from year to year and from AY 2019-20 of Rs.58 crores which has come down to only Rs.83 lakhs this year. He submits that if the contention of the assessee is accepted that whole demand would obliterate. The second contention stated was that assessee’s turnover on SWD segment is Rs.24,40,000 whereas the ld. TPO has not applied the upper turnover filter and has included the companies such as Tata Elxsi Ltd., Infosys Ltd., Larsen & Toubro Infotech Ltd., Wipro Ltd. And Tata Consultancy Services whose turnover and brand value are higher multiple times. Therefore, the upper turnover filter, if applied, the adjustment would go down substantially. 3. The third issue stated in the Stay Petition is that the ld. TPO has excluded the comparable companies despite comparable passing all the SP No.76/Bang/2024 Page 3 of 4 filters and simply because of the reason that those were not appearing in the search process of the ld. TPO. The ld. TPO also did not give any reason that why these companies are not appearing in the search process of the assessee where the filters of the assessee and the TPO are similar. If there is a difference in the filter, the TPO must have stated that this is excluded because of applicability of a particular filter, which is not mentioned. 4. On the basis of the above arguments the ld. AR submitted that balance of convenience lies in favour of the assessee and further the appeal is fixed for hearing on 26.6.2025 and therefore the assessee deserves stay of demand. It was also stated that earlier appeal was heard, but was released. 5. The ld. DR vehemently objected to the Stay Petition and submitted that assesse must deposit at least 20% of the outstanding tax before stay is granted. 6. We have carefully considered the rival contentions and perused the orders of the ld. lower authorities. We find that in this case the assesse has stated the above 3 issues. First issue is of inclusion of platform segment while working out the ALP of the SWD segment. It was also submitted that the platform segment and SWD segment are two different segments and segmental accounts are available. Further the adjustment is also required to be only on transaction with AE. Further in the comparability analysis also the companies having huge turnover are included and upper turnover filter is not applied. Further while SP No.76/Bang/2024 Page 4 of 4 rejecting the comparables despite claim of the assessee that those comparable companies passes all the filters, but excluded by the TPO without any reason. All these facts show that balance of convenience lies in favour of the assesse. The appeal of the assesse is also fixed for hearing on 26.6.2025. The assesse has also stated that the Stay Petition is also pending before the ld. AO and rectification proceedings are also pending which are not decided by the ld. AO. 7. In view of the above facts, we direct the ld. AO to keep recovery of above demand in abeyance till disposal of the appeal or 180 days from the date of this order, whichever is earlier. Both the parties are directed to argue the matter on the next date of hearing and not to seek adjournment for unreasonable reasons. 8. In the result, the Stay Petition is allowed. Pronounced in the open court on this 20th day of June, 2025. Sd/- Sd/- (SOUNDARARAJAN K.) (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE PRESIDENT Bangalore, Dated, the 20th June 2025. . sai S Murthy / Copy to: 1. Applicant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. "