FIVETRAN INDIA PRIVATE LIMITED,BENGALURU vs. 1. ASSESSMENT UNIT INCOME TAX DEPARTMENT 2. DCIT 3(1)(1), BENGALURU, BENGALURU

The order of the Learned Assessing Officer (‘Ld. AO’ for short) pursuant to the directions of the Hon’ble Dispute Resolution Panel (the DRP’ for short), is bad in law and liable to be set aside.

The impugned directions of the Hon’ble DRP and the order passed by Ld. AO are based on incorrect appreciation of facts and wrong interpretation of law and therefore, bad in law and liable to be set aside.

The Hon’ble DRP / Ld. AO / Ld. TPO erred in making an addition of INR 2,40,24,687/- to the total income of the Appellant on account of adjustment under section 92CA of the Act for the international transaction of provision of software development and support services (“SWD services”) to its Associated Enterprise (“AE”).

The Hon’ble DRP / Ld. AO / Ld. TPO erred in rejecting the Appellant’s transfer pricing study and accordingly conducting fresh search for comparable companies.

The Hon’ble DRP/Ld. AO/Ld. TPO erred in not allowing an adjustment on account of differences in the level of working capital position between the Appellant vis-à-vis the comparable companies.

The Hon’ble DRP/Ld. AO/Ld. TPO erred in not allowing an adjustment on account of differences in the level of risks assumed by the Appellant vis-a-vis the comparable companies.

The Hon’ble DRP / Ld. AO / Ld. TPO erred in law in applying arbitrary filters to arrive at a fresh set of companies as comparables to the Appellant, without establishing functional comparability.

The Hon’ble DRP/ Ld. AO / Ld. TPO erred in law and facts by rejecting comparable companies selected by the Appellant (‘TP study’) namely Rheal Software Limited and K-Cube Consultancy Services Pvt Ltd, despite these companies being functionally similar to the Appellant.

The Hon’ble DRP / Ld. AO / Ld. TPO erred in not applying an appropriate upper limit to reject companies having high turnover when compared to the Appellant, without appreciating the impact on the margin on account of difference in size and turnover of the companies.

The Hon’ble DRP / Ld. AO / Ld. TPO erred in law and facts by accepting companies namely, Happiest Minds Technologies Ltd, CG-VAK Software & Exports Ltd, Nintec Systems Ltd, Conga Software Pvt Ltd, QSG Technologies Pvt Ltd, Systango Technologies Ltd, Tata Elxsi Ltd, Robosoft Technologies Pvt Ltd,., IDS Infotech Ltd. and Cybage Software Pvt Ltd. from the Ld. TPO’s search matrix as being comparable to the Appellant, despite being functionally dissimilar to the Appellant

The Hon’ble DRP failed to provide any directions with respect to the exclusion of Tata Consultancy Services Limited from the final list of comparable companies despite the same being functionally dissimilar to the Appellant,.

The Hon’ble DRP / Ld. AO / Ld. TPO erred in law and facts by rejecting certain additional comparable companies proposed by the Appellant, during the course of assessment proceedings, from the Ld. TPO’s search matrix, namely, Kals Information Systems Pvt Ltd, Orchasp Ltd, Toxsl Technologies Pvt Ltd, Batchmaster Software Pvt Ltd, Elveego Circuits Pvt Ltd, Rishabh Software Pvt Ltd, Hurix Systems Pvt Ltd, Kireeti Soft Technologies Limited, Celstream Technologies Pvt Ltd, Electronics for Imaging India Pvt Ltd, Maveric Systems Ltd, Yudiz Solutions Ltd. and Trupp Global Technologies Pvt Ltd. despite these companies being functionally similar to the Appellant.

The Hon’ble DRP / Ld. AO / Ld. TPO erred in calculating the Profit Level Indicator of certain companies for the purpose of arm’s length analysis of the Assessee’s international transactions of provision of SWD services.

The Ld. AO erred in computing the Appellant’s alleged tax demand and consequently erred in computing the amount of interest under the section 234B of the Act.

The Ld. AO has erred in levying interest under the section 234B of the Act.

The Ld. AO erred by initiating penalty proceedings under section 270A r.w.s 274 of the Act.

At the hearing, the learned Authorised Representative, Ms. Tanmayee Rajkumar, Advocate, submitted that the Assessee had filed a rectification application before the Dispute Resolution Panel against its original directions, pursuant to which the learned Dispute Resolution Panel had issued rectified directions. She further submitted that the learned Assessing Officer had not yet given effect to those directions. According to her, once effect is given, the transfer pricing adjustment would stand reduced to nil. 4. The learned Departmental Representative, Smt. Divya K.J., CIT-DR, submitted a report dated 17 June 2026 from the learned Assessing Officer. The report states that the learned Dispute Resolution Panel issued rectified directions on 26 February 2026, pursuant to which the Transfer Pricing Officer passed an order giving effect to those directions on 11 March 2026. It further states that the Assessing Officer became aware of the Transfer Pricing Officer’s order only upon receiving an email from the ITAT Registry on 17 June 2026, and passed the final order giving effect to the same on that date. As per that order, the transfer pricing adjustment of ₹2,40,24,687 originally made stands reduced to Nil, and the revised total income is ₹7,10,68,153, being the returned income of the Assessee. Accordingly, it was submitted that the returned income of the Assessee has been accepted as filed. 5. We have carefully considered the rival contentions and perused the order of the learned Deputy Commissioner of Income Tax, Circle 3(1)(1), Bangalore, dated 17 June 2026. The facts recorded therein show that the assessment was originally completed under section 143(3) of the Act on 30 December 2025, determining the Assessee’s total income at ₹9,50,92,840 as against the returned income of ₹7,10,68,153. Thereafter, by order dated 11 March 2026 giving effect to the directions of the learned Dispute Resolution Panel, the Transfer Pricing Officer held that no transfer pricing adjustment survived and computed the revised transfer pricing adjustment at Nil. Based on the same, the learned Assessing Officer accepted the returned income of the Assessee. In view of these facts, all the grounds raised by the Assessee have become infructuous. 6. Since the returned income of the Assessee has been accepted, the appeal has become infructuous and is accordingly dismissed.