Case Law Details
EMC Software & Services India Pvt. Ltd. Vs. JCIT (ITAT Banglore)
The assessee seeks inclusion of T2T2 India Ltd. The Ld. A.R. submitted that this company is functionally comparable company. The TPO/DRP has rejected the same only for the reason that the detail of Related Party Transactions (RPT) was not disclosed in the Annual Report. The Ld. A.R. submitted that the above said company would have disclosed RPT transactions if any such transactions were available. Since no disclosure was made, it has to be concluded that there was not RPT transaction., Accordingly the Ld. A.R. submitted that there is no justification for excluding this company.
We find force in the contentions of Ld. A.R. If the Annual report of this company does not mention about Related Party Transactions, then the assessee cannot be held responsible to prove a fact relating to a third party, which may or may not exist. We notice from the Auditors Report of M/s. T2T2 India Ltd. that the auditor in para 5(b) of Annexure to the Auditor’s report has mentioned as under:-
“There are no transactions that are made at prices exceeding Rs.5 lakhs in respect of any party who is covered under section 301 of the Act during the financial year”.
Hence, in the absence of any specific information, there is merit in the contentions of the assessee that the above said company might not have had related party transactions during the year under consideration. Accordingly we do not agree with the reasoning given by Ld. DRP for excluding this company as a comparable. Accordingly we direct the AO/TPO to include this company.
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