Case Law Details
Agilent Technologies India Pvt. Ltd Vs DCIT (ITAT Delhi)
With respect to the Infosys technologies it is the claim of the assessee that the turnover of the above company is such a huge turnover that it is not comparable with the assessee company is software development division. For this proposition we look at page number 165 of the paper book wherein the software development division revenue of the assessee is only Rs.16.80 crores whereas the turnover of the comparable company i.e. Infosys technologies Ltd compared by the learned transfer pricing officer is ₹ 21,140 crores. It is also submitted before us that the asset base of the assessee company is merely 42.7 crores whereas the asset base of Infosys technologies Ltd is ₹ 4188 crores. The assessee has not incurred any expenditure on brand whereas the comparable company has incurred an expenditure of ₹ 57 crores. The learned departmental representative could not controvert the above dissimilarity between the asset base, turnover of the company, the brand utilised by the comparable. Thus, In view of such a huge turnover of the comparable company, relying on the decision of the honourable Bombay High Court in case of CIT versus Pentair water private limited and of honourable Delhi High Court in case of CIT versus Agnity India technologies Ltd in ITA number 1204/2011 dated 10 July 2013 the above comparable is directed to be excluded.
Now we come to the second comparable Tata Elxis Ltd it is pointed out that in the directors report of the company it is stated that the above company is engaged in software development in service segment wherein that segment comprises of product design services which comprises of hardware and software design and development, innovation design engineering and visual computing labs. Further in the revenue of the above company there is no bifurcation about the sales and services with respect to the products. In schedule 18 it is also shown that there is income from sale of goods. Further, the learned authorised representative referring to the order of the coordinate bench in case of a sister concern in ITA number 1084/del/2016 has stated that in para number 56 it shows that the comparable company provides global customer with service towards technology product development and outsourcing research and development including digital TV unable products such as advanced display and set-top boxes, multimedia and portable entertainment product such as audio and media players, consumer electronics such as digital video cameras, mobile phone et cetera and enable value to its customers through cost-effective and timely service deliver of its technology and domain expertise . Further it is also pointed out that the comparable company is a design company that blends technology, creative and engineering to help customers transform ideas into world-class products and solutions. The learned dispute resolution panel though has considered the above functions of the comparable company however it is directed that the comparable company provides software development services which are similar to the IT services provided by the assessee. In view of this we find that the direction of the learned dispute resolution panel is not based on the appreciation of the functions and the product profile of the comparable company. In view of this, we direct the learned transfer pricing officer to exclude the above comparable.
FULL TEXT OF THE ITAT JUDGEMENT
Please become a Premium member. If you are already a Premium member, login here to access the full content.
