ADP Pvt. Ltd. Vs DCIT (ITAT Hyderabad)
ADP Private Limited is engaged in providing software development, maintenance and support services and Information Technology Enabled Services to its Associated Enterprises. For AY 2016-17, it filed its return on 30 November 2016 declaring income of Rs.1,07,39,06,220 under the normal provisions and book profits of Rs.100,31,48,751 under section 115JB.
The case was selected for scrutiny and referred to the Transfer Pricing Officer under section 92CA because of international transactions with Associated Enterprises. The TPO made adjustments of Rs.27,83,27,552 towards the software development segment, Rs.23,25,77,641 towards ITeS and Rs.1,23,24,559 towards interest on delayed receivables. After the DRP granted part relief, the AO assessed total income at Rs.157,70,82,306.
The assessee’s appeal was filed with a delay of 13 days. The Tribunal condoned the delay after considering the reasons stated by the assessee.
The Tribunal directed exclusion of Larsen & Toubro Infotech Ltd., Tata Elxsi Ltd., Persistent Systems Ltd., Infobeans Technologies Ltd., Infosys Ltd. and Thirdware Solutions Ltd. from the final comparable set. The decisions were based on the functional differences, diversified activities, product-related activities, extraordinary events and absence of relevant segmental details discussed in the order.
For Aspire Systems (India) Pvt. Ltd., the Tribunal remitted the matter to the AO/TPO to examine the factual issues raised by the assessee and decide comparability after providing reasonable opportunity of hearing.
