Genesys Telecom Labs India Pvt. Ltd. Vs DCIT (ITAT Chennai)
The assessee, a private limited company, provided research, development, sales, marketing, administrative support and subcontract services relating to the telecommunication business to its Associated Enterprises (AEs) in Ireland and the Netherlands. For AY 2020-21, it filed its return declaring total income of Rs.33,70,65,800 and book profit under MAT of Rs.23,02,39,911.
The case was selected for scrutiny and referred to the Transfer Pricing Officer (TPO). The TPO proposed a transfer pricing adjustment of Rs.9,18,48,775 in the software development segment. After the Dispute Resolution Panel (DRP) partly allowed the assessee’s objections, the adjustment was revised to Rs.8,52,27,336. The final assessment order was passed under Sections 143(3), 144C(13) and 144B. The assessee appealed before the Tribunal, restricting its arguments to the selection of comparables.
Procedural History
- TPO proposed TP adjustment of Rs.9,18,48,775.
- DRP partly allowed the objections.
- TPO revised the adjustment to Rs.8,52,27,336.
- Final assessment order dated 24.06.2024 was passed.
- The assessee appealed before the ITAT, limiting its challenge to selected transfer pricing issues.
Legal Issues
- Whether an upper turnover filter should be applied while selecting comparable companies.
- Whether Rheal Software Pvt. Ltd. should be included as a comparable.
- Whether Daffodil Software Pvt. Ltd. should be excluded as a comparable.
Relevant Statutory Provisions
- Sections 92CA(3), 143(3), 144B and 144C of the Income-tax Act, 1961.
Parties’ Submissions
