GlobalLogic India Pvt. Ltd. Vs DCIT (ITAT Delhi)
The appeal filed by GlobalLogic India Pvt. Ltd. for AY 2016-17 challenged the assessment order passed under section 143(3) read with section 144C of the Income-tax Act, 1961, pursuant to the orders of the TPO and DRP. The Assessing Officer determined total income at Rs.67,64,20,330 as against returned income of Rs.48,14,53,110, after making a transfer pricing adjustment of Rs.19,49,67,216.
The taxpayer provided software development services to its Associated Enterprises (AEs). For benchmarking the international transaction relating to software development services, the taxpayer applied TNMM with OP/OC as the PLI and selected 16 comparable companies. The TPO, after applying various filters, retained seven comparables selected by the taxpayer and introduced six additional companies. The final set of 13 comparables had a mean margin of 24.37%, resulting in a transfer pricing adjustment of Rs.14,18,95,876.
The taxpayer challenged nine comparables selected by the TPO: Mindtree Ltd., Cigniti Technologies Ltd., Inteq Software Ltd., Tata Elxsi Ltd., Larsen & Toubro Infotech Ltd., Infobeans Technologies Ltd., Kelton Tech Solutions Ltd., Thirdware Solutions Ltd. and Cybercom Datamatics Information Solutions Ltd. It also sought inclusion of E-Zest Solutions Ltd. and Evoke Technologies Ltd., but subsequently did not press their inclusion.
