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Income Tax Appellate Tribunal, HYDERABAD ‘A’ BENCH, HYDERABAD.
O R D E R Per Shri S.S. Godara, J.M. : This Revenue’s appeal for Assessment Year 2010-11 raises against the ACIT, Circle 16(2), Hyderabad’s assessment framed in furtherance to Dispute Resolution Panel (DRP), Hyderabad’s directions dt.8.12.2014 involving proceedings u/s.143(3) r.w.s. 92CA(3) r.w.s. 144C(5) of the Income Tax Act, 1961 ('the Act'). Heard both the parties. Case file perused.
2. The Revenue raises following twin substantive grounds in the instant appeal : “ 1. On the facts and in the circumstances of the case and in law, the learned DRP erred in excluding M/s. Infosys Technologies Ltd. and M/s. L & T Infotech Ltd. from the list of comparables.
On the facts and in the circumstances of the case and in law, the learned DRP erred in holding that interest rates should be taken at LIBOR +2% as against 12.25% adopted by the A.O.”
Coming to the Revenue’s first and foremost substantive grounds that the DRP has erred in law and on facts in excluding M/s. Infosys Technologies Ltd. and M/s. L & T Infotech Limited for the reason of having huge turnover(s) in provision for software development services segment, we note that case law orders i.e. CIT Vs. Agnity India Technologies Ltd. (2013) 219 Taxman 29 (Del) and ACIT Vs. Electronic Arts Games India Pvt. Ltd. dt.30.09.2016 (for A.Y. 2011-12 itself) hold that these twin entities are not to be included since differing in risk profile, nature of services as well as on site and off shore activity(ies) qua former and non-availability of segmental data regarding the latter one; respectively. We therefore confirm the learned DRP’s directions accepting the assessee's objections for the very reasons.
Next comes the Revenue’s second substantive grievance that the DRP has erred in law and on facts in directing the Transfer Pricing Officer (TPO) to adopt LIBOR +2% of assessee's investment in Associated Enterprises (AEs) to the tune of Rs.59,77,61,962 than that in the TPO’s order dt.28.03.2014 (page 48) taking it as per SBI’s PLR @ 12.25%; respectively. Learned CIT-DR fails to dispute the clinching fact that the DRP has gone by LIBOR rate prevailing in the relevant financial year involving foreign currency transactions only than domestic market benchmarking. We further note that the TPO’s order has neither adopted any method nor segmental comparable(s) qua the impugned SBI’s PLR in above terms. We thus reject the Revenue’s instant latter substantive ground as well.
No other ground has been pressed before us. 5. This Revenue’s appeal is dismissed in above terms. Order pronounced in the open court on 16 th Nov., 2021.