IT/ILT : Companies engaged in software product development are functionally different and dis-similar to companies engaged in providing software development services
IT/ILT : Turnover filter is an important criteria in choosing comparables
IT/ILT : Even if assessee had taken a company as comparable in its transfer pricing audit, still it was entitled to point out to Tribunal that said enterprise had wrongly been taken as a comparable
■■■
[2014] 52 taxmann.com 407 (Bangalore - Trib.)
IN THE ITAT BANGALORE BENCH 'B'
Aptean Software India (P.) Ltd.
v.
Income-tax Officer, Ward 11 (1), Bangalore*
N.V. VASUDEVAN, JUDICIAL MEMBER
AND ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
I.T. (T.P.) APPEAL NOS. 1285 OF 2010 & 207 (BANG.) OF 2014
[ASSESSMENT YEARS 2006-07 & 2009-10]
OCTOBER 31, 2014
I-Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm's length price (Comparables and adjustments) - Assessment year 2006-07 - Whether companies engaged in software product development are functionally different and dissimilar to assessee company engaged in providing software development services and were, therefore, to be omitted from list of comparables while determining ALP of international transaction in question - Held, yes[Paras 9, 11 & 13][In favour of assessee]
II-Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm's length price (Comparables and adjustments) - Assessment year 2009-10 - Whether turnover filter is an important criteria in choosing comparables - Held, yes - Whether where turnover of assessee company was less than Rs.30 crores, companies having turnover of more than Rs. 200 crores could not be compared with assessee and had to be excluded from comparable - Held, yes - Whether where in a company there was consistent change in operating margins, same had to be excluded - Whether, even if assessee had taken a company as comparable in its transfer pricing audit, still it was entitled to point out to Tribunal that said enterprise had wrongly been taken as a comparable - Held, yes [Paras 29, 33 & 35][In favour of assessee]
IT/ILT : Turnover filter is an important criteria in choosing comparables
IT/ILT : Even if assessee had taken a company as comparable in its transfer pricing audit, still it was entitled to point out to Tribunal that said enterprise had wrongly been taken as a comparable
■■■
[2014] 52 taxmann.com 407 (Bangalore - Trib.)
IN THE ITAT BANGALORE BENCH 'B'
Aptean Software India (P.) Ltd.
v.
Income-tax Officer, Ward 11 (1), Bangalore*
N.V. VASUDEVAN, JUDICIAL MEMBER
AND ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
I.T. (T.P.) APPEAL NOS. 1285 OF 2010 & 207 (BANG.) OF 2014
[ASSESSMENT YEARS 2006-07 & 2009-10]
OCTOBER 31, 2014
I-Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm's length price (Comparables and adjustments) - Assessment year 2006-07 - Whether companies engaged in software product development are functionally different and dissimilar to assessee company engaged in providing software development services and were, therefore, to be omitted from list of comparables while determining ALP of international transaction in question - Held, yes[Paras 9, 11 & 13][In favour of assessee]
II-Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm's length price (Comparables and adjustments) - Assessment year 2009-10 - Whether turnover filter is an important criteria in choosing comparables - Held, yes - Whether where turnover of assessee company was less than Rs.30 crores, companies having turnover of more than Rs. 200 crores could not be compared with assessee and had to be excluded from comparable - Held, yes - Whether where in a company there was consistent change in operating margins, same had to be excluded - Whether, even if assessee had taken a company as comparable in its transfer pricing audit, still it was entitled to point out to Tribunal that said enterprise had wrongly been taken as a comparable - Held, yes [Paras 29, 33 & 35][In favour of assessee]
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