TRIBAL FUSION R &D LLP,DELHI vs. DCIT, CIRCLE 34(1), DELHI

PER RAMIT KOCHAR, AM:

The appeal in IT(TP)A No. 8/Del/2026 for assessment year: 2022-23 has been filed by the assessee against the assessment order dated 17.12.2025 passed by the learned Assessing Officer, Assessment Unit, Income Tax Department u/s 143(3) r.w.s. 144C(13) read with Section 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) (DIN:ITBA/AST/S/143(3)/2025-26/ 1083797982(1), wherein addition of Rs. 2,30,97,676/- on account of ALP

2 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP adjustment u/s 92C were made in the hands of the assessee, which assessment order has been passed by the AO in pursuance to the directions given by the Ld. DRP-2, New Delhi, vide orders dated 26.11.2025 passed u/s. 144C(5) of the Act (DIN : ITBA/DRP/M/144C(5)/2025-26/1083025244(1)) . The AO had earlier issued draft assessment order dated 12.02.2025 u/s. 144C(1) of the Act , wherein the AO proposed an addition of Rs.2,98,56,937/- on account of ALP adjustment u/s 92C as proposed by ld. TPO in its Transfer pricing order dated 29.01.2025 passed u/s 92CA(3), which were subjected to challenge by the assessee by filing objection before the ld. DRP which culminated into an order passed by ld. DRP dated 26.11.2025 u/s 144C(5) of the Act. TPO passed order giving effect to the directions of ld. DRP , vide order dated 12.12.2025.

The Grounds of appeal raised by the assessee in Memo of Appeal filled with 2. Income Tax Appellate Tribunal, New Delhi in IT(TP) A No. 8/Del/2026, reads as under: -

“Based on the facts and circumstances of the case, the Appellant respectfully craves leave to prefer an appeal against the order dated 17 December 2025 passed under section 143(3) read with section 144C(13) read with section 144B of the Act by the Assessment Unit, Income-Tax Department ('learned assessing officer') in pursuance to the directions of the Hon'ble Dispute Resolution Panel 2, Delhi ['Hon'ble DRP'] dated 26 November 2025 passed under section 144C(5) of the Act and the order passed by the learned Assistant Commissioner of Income-Tax (Transfer Pricing)-3(2)(1), Delhi dated 29 January 2025 ('the learned transfer pricing officer') as well as the order dated 12 December 2025 passed by the learned transfer pricing officer giving effect to the directions of the Hon'ble DRP, on the following grounds which are without prejudice to and independent of the others.

Based on the facts and circumstances of the case, the learned assessing officer/ learned transfer pricing officer/ Hon'ble DRP has

A. General:

3 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP 1. erred in determining the total income at Rs. 14,92,51,216 as against the returned income of Rs. 12,61,53,540 under normal provisions of the Act;

B. Assessment proceedings are barred by limitation:

C. Notice issued under section 143(2) of the Act not being as per the format prescribed by CBDT Instruction (F.No. 225/157/2017/ITA.II) dated 23 June 2017 is invalid:

D. Final assessment order following DRP directions is void and invalid on account of the DRP directions being issued in violation of CBDT Circular No. 19/2019 dated 14 August 2019:

E. Transfer Pricing Grounds - Rs. 2,30,97,676:

Provision of software development services - Rs. 1,09,21,325

4 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP

Provision of online advertisement support services -Rs. 82,94,646

5 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP

Provision of information technology enabled services - Rs. 38.81,705

Non-granting of risk adjustment to the Appellant:

F. Other grounds of appeal:

Levy of interest under section 234A of the Act-Rs 58.272.

6 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP Excess levy of interest under section 234B of the Act-Rs 27,34,466

24 erred in levying interest under section 234B of the amounting to Rs. 30,60,756 as against the returned interest of Rs. 3,26,290 and thereby, levying excess interest of Rs. 27,34,466,

Excess levy of interest under section 234D of the Act-Rs 4,76,550;

Computation of interest under section 244A of the Act,

26 be directed to compute interest under section 244A of the Act till the date of actual receipt of refund by the Appellant:

Initiation of penal proceedings under section 270A of the Act

The above grounds of appeal are mutually exclusive and without prejudice to each other.

The Appellant craves leave to add, amend, vary, omit or substitute, withdraw any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal.

The Appellant prays for appropriate relief based on the said grounds of appeal and the facts and circumstances of the case.”

7 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP and 142(1) were issued by the AO. Thereafter, reference was made by the AO to the Transfer Pricing Officer u/s 92CA(3) of the 1961 Act to determine Arms Length Price with respect to International Transactions carried on the by the assessee with its AE during the year under consideration. The TPO observed that following international transactions were entered into by the assessee with its AE namely Exponential Inc., USA, as detailed hereunder: Name of the Associated Nature of International Amount of the Enterprise Transaction Transaction (In Rs.) Exponential Inc., USA Provision of software 17,33,88,807/- development services Provision of Online 35,75,29,541/- advertisement support services Provision of Information 9,68,70,030/- Technology Enabled Services

3.2 The TPO observed that the assessee has selected itself as tested party , and has applied TNMM as the most appropriate method for computing PLI(OP/OC) , wherein margin of 15% was computed by the assessee, which was taken by the assessee to be at Arms Length Price wrt International Transactions entered into by the assessee with its AE. The TPO observed that the assessee has computed its margin incorrectly, and the TPO recomputed margin of the assessee being PLI(OP/OC) at 10.84% instead of 15% computed by the assessee. The TPO

8 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP apportioned operating expenses according to Revenue. The TPO observed that the assessee has income majorly from three segments viz. ‘Provision of Software Development Services’, ‘Provision of Online Advertising Support Services’ and ‘Provision of Information Technology Enabled Services’. The TPO also rejected the economic analysis undertaken by the assessee. The TPO also modified some of the search filters adopted by the assessee. The assessee objected and requested TPO to treat Foreign Exchange gains/loss as well income from sale of Scrips granted under the ‘Services Export from India Scheme (SEIS)’ as part of operating profit. These contentions were rejected by TPO, as these are not derived from core business activities and being non-operating in nature. The TPO observed that comparables selected by the assessee for ‘Online Advertisement Services’ segment were found to be inappropriate , as they were found to belong to IT/ITES segment. Fresh search was conducted by the TPO of the comparables under the ‘Online Advertisement Support Services’, and new comparables were selected under this segment. With respect to ‘Online Advertisement Support Services’ segment, the TPO rejected all the eleven comparables selected by the assessee , because as per TPO these comparables belong to the IT/ITES segment. The TPO introduced six new comparables , wherein mean of the comparables selected by TPO were taken to be 13.42% by TPO , and the assessee’s recomputed margin by the TPO was taken at 10.84%, which led to the TP addition of Rs. 83,26,903/- being proposed by TPO under this segment by way of adjustment to the ALP of the international transaction entered into by the assessee with its AE with respect to ‘Provision of Online Advertisement Support Services’ segment. The TPO also rejected some of the comparables selected by the assessee wrt other two segments viz. ‘Provision of Software Development Services’ and ‘Provision of Information Technology Enabled Services’ segment as they failed filters or were dissimilar on the basis of

9 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP FAR analysis. The TPO finally selected eleven comparables for benchmarking under ‘Provision of Software Development Services’ segment, wherein three comparables selected by the assessee were rejected, and four new comparables were added by the TPO after conducting fresh search. The TPO computed Median margin of these eleven comparables to be 18.39% , with 35th Percentile margin of 5.81% of these comparables and 65th Percentile margin of 21.62% of these finally selected eleven comparable. Thus, the median OP/OC of the comparables were taken to be 18.39% , while the assessee margin (PLI being OP/OC) was 10.84% , which led to the TP addition of Rs. 1,18,12,997/- being proposed by TPO under this segment by way of adjustment to the ALP of the International Transaction entered into by the assessee with its AE with respect to ‘Provision of Software Development Services’ segment. With Respect to ‘ITES’ segment, the TPO finally selected ten comparables for benchmarking , wherein one comparable namely ‘Virinchi Limited’ selected by the assessee was rejected, while no new comparables were added by the TPO. The TPO computed Median margin of these ten comparables to be 19.50% , with 35th Percentile margin of 15% of these comparables and 65th Percentile of 22%. The Median PLI being OP/OC of the comparables were taken to be 19.50% , while the assessee margin(PLI) was 10.84% , which led to the TP addition of Rs. 94,17,037/- (amount wrongly proposed as Rs. 97,17,037/- in the order while computing income) being proposed by TPO under this segment by way of adjustment to the ALP of the International Transaction entered into by the assessee with its AE with respect to ‘Provision of ITES’ segment. The AO accordingly passed draft assessment order. Aggrieved, the assessee filed objections before ld. DRP, who was pleased to dispose of the objections raised by the assessee vide its detailed orders dated 26th November, 2025, wherein some relief was granted by ld. DRP. The TPO passed order giving

10 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP effect order consequent to the ld. DRP directions, vide order dated 12th December, 2025, wherein additions proposed pursuant to directions of ld. DRP , are as under:

S.No. Description Amount ( In Rs.) Amount(In Rs.) as as per TP order per DRP directions

Total 2,98,56,937/- 2,30,97,676/-

3.3 The AO , thereafter , passed assessment order dated 17.12.2025, making aforesaid TP additions to the tune of Rs. 2,30,97,676/- to the returned income by way of adjustment to ALP of the international transactions entered into by the assessee with its AE in accordance with order giving effect passed by ld TPO in pursuance to ld. DRP directions, wherein income was assessed at Rs. 14,92,51,216/- by the AO as against returned income of Rs. 12,61,53,540/-.

11 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP 5. We have heard rival parties and perused material on record. The facts in brief are recorded by us in the preceding para’s of this order , and are not repeated. Our decision vide grounds of appeal raised by the assessee , are as under:-

5.1-Ground No. 1 is general in nature and thus, does not required separate adjudication, and hence accordingly disposed off.

5.2- Ground No. 2 to 4 are not pressed by the assessee, and hence accordingly disposed off .

5.3-Ground No. 5 and 6.The ld. Counsel for the assessee has not raised any contentions with respect thereto of aforesaid grounds of appeal at the time of hearing, and hence accordingly disposed off.

5.4-Ground No. 7 to 10-Provision of Software Development Services . The main grievance of the assessee with respect to aforesaid grounds , which is agitated before us, without prejudice to other grounds , is that the authorities below have erred in making TP additions to arms length price(ALP) of the International Transactions entered into by the assessee with its AE, with respect to ‘Provision of Software Development Services’ segment , wherein the PLI of the assessee was within statutorily permitted tolerable range keeping in view provisions of Section 92C of the 1961 Act read with Rule 10CA of the 1962 Rules and the same was not considered by authorities , wherein consequently no TP additions were warranted if the statutorily permitted tolerable range was allowed , and , thus, the authorities erred in making TP adjustment in this segment . It is contended that the assessee applied TNMM method as MAM with itself being tested party to compute PLI(OP/OC) which method is accepted by ld. TPO, wherein TPO computed PLI of 10.84% of the assessee, while PLI(OP/OC) of the comparables in this segment namely ‘Provision of Software Development Services’ were computed at 5.70% with 35th percentile and 21.62% with 65th percentile , with median of 17.82%, pursuant to directions of ld. DRP in the order giving effect . There were eleven comparables finally

12 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP selected by ld. TPO in this segment, pursuant to ld. DRP directions. It is submitted that even if aforesaid computations of TPO pursuant to ld. DRP directions are accepted , the assessee’s PLI(OP/OC) as computed by ld. TPO falls within tolerable range as is statutorily provided u/s 92C of the 1961 Act read with Rule 10CA of the Income-tax Rules, 1962, and hence no TP adjustment to ALP of international transactions entered into by the assessee with its AE wrt ‘Provision of Software Development Services’ Segment is warranted. We have observed that the assessee raised this issue with ld. DRP, and the ld. DRP rejected the contentions of the assessee without specifying the reasons for such rejections , and ld. DRP accepted decision of TPO , wherein TPO vide its order dated 29.01.2025 did not consider the allowability of the statutorily permitted tolerable range . Thus, the ld. DRP passed a non speaking order. We have observed that there were eleven comparables finally selected by TPO pursuant to ld. DRP directions. The assessee was taken to be tested party and TNMM method was accepted as MAM to compute PLI of the assessee as well comparables. The assessee’s PLI was 10.84% in this segment, while the comparables PLI range was 5.7% with 35 percentile and 21.62% with 65% percentile, with Median PLI of 17.82% pursuant to ld. DRP directions. We are of the considered view that assessee’s PLI is 10.84% which is within the range of PLI of comparables within 35percentile to 65percentile of the comparables , and hence as per Rule 10CA(4) and 10CA(5) of the 1962 Rules read with Section 92C of the 1961 Act, no additions are warranted. Thus, we order deletion of the additions as were made by the AO in its final assessment order wrt ‘Provision of Software Development Services’ segment. This disposes off Ground No. 7 to 10 raised by the assessee. We order accordingly

5.5-Ground No. 11 to 15. Provision of Online Advertisement Support Services . The main grievance of the assessee with respect to aforesaid grounds , which is agitated before us , without prejudice to other grounds, is that the authorities below have erred in making TP additions to Arms Length Price of the International Transactions entered into by the assessee with its AE, with respect to provision of ‘Online Advertising Support

13 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP Services’ segment, , wherein the PLI of the assessee was within statutorily permitted tolerable range keeping in view provisions of Section 92C of the 1961 Act read with Rule 10CA of the 1962 Rules and the same was not considered by authorities wherein no TP additions were warranted and the authorities erred in making TP adjustment in this segment . It is contended that the assessee applied TNMM method as MAM to compute PLI(OP/OC) , and TPO computed PLI of 10.84% of the assessee, while PLI(OP/OC) of the comparables in this segment by applying arithmetic mean were computed at 13.41% , pursuant to directions of ld. DRP in the order giving effect . It is submitted that even if aforesaid computations are accepted , the assessee’s PLI falls within tolerable range of +/- 3% as is provided u/s 92C of the 1961 Act read with Rule 10CA(7) of the 1962 Rules, and hence no TP adjustment to ALP of international transactions entered into by the assessee with its AE wrt ‘Provision of Online Advertisement Support Services’ Segment is warranted. The TPO finally selected five comparables pursuant to ld. DRP directions. We have observed that the assessee raised this issue with ld. DRP , and the ld. DRP rejected the contentions of the assessee without specifying the reasons for such rejections, and decision of TPO was upheld by ld. DRP to this effect wherein TPO in its order dated 29.01.2025 did not consider the allowability of tolerable range. The ld. DRP did not pass a speaking order. Five companies were finally selected as comparables pursuant to ld. DRP directions. Since, there are less than six comparables selected, Rule 10CA(4) to (6) of the 1962 Rules are not applicable. Rule 10CA(7) of the 1962 Rules is applicable read with Section 92C of the 1961 Act. The arithmetic mean of the PLI of the comparables viz. 13.41% is to be compared with PLI of the assessee viz. 10.84%.. The operating cost of the assessee in this segment is Rs. 32,25,67,840/- , and arithmetic mean of PLI of the comparables is 13.41%, the ALP by applying above is determined to be at Rs. 36,58,24,187/-, while assessee has entered into international transactions with its AE in this segment at Rs. 35,75,29,541/- , and the variation comes to Rs. 82,94,646/- which comes to 2.32% of the actual price at which international transaction is entered into by the assessee (Refer Rule 10CA(7) of the 1962 Rules) which is below 3%, and hence the

14 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP ALP is to be accepted to be the actual transaction value entered into by assessee with its AE with respect to this segment. Thus, we are of the considered view that the assessee PLI is within tolerable range of +/- 3% , and hence no additions are warranted keeping in view provisions of Section 92C of the 1961 Act read with Rule 10CA(7) of the 1962 Rules , and hence we order deletion of the additions made. This disposes off Ground No. 11 to 15 raised by the assessee. We order accordingly

5.6-Ground No. 16 to 21-Provision of Information Technology Enabled Services

5.6.1 Foreign Exchange Gains/Losses

The ld. Counsel for the assessee submitted that foreign exchange gains/losses are part of the operating income, while authorities below have treated the same as non-operating in nature while computing PLI(OP/OC) of the assessee. The ld. Counsel for the assessee submitted that such foreign exchange gains/losses have arisen from the foreign exchange rate difference between the date of raising of the export invoices and the realization of export invoices with respect to regular export invoices raised by the assessee wrt ‘Information Technology Enabled Services’ segment. Thus, it is contended that these gains/losses on foreign exchange fluctuation had arisen on revenue field related to its business activity of ‘ITES’ segment. It was submitted that the foreign exchange/loss which have arisen due to exchange rate difference between the date of raising of export invoices for ‘Provision for Information Technology enabled services’ segment, and date of realization of the invoices are integral part of operating revenue from export of ‘Information Technology Enabled Services’, and should be treated as operating income. The assessee has relied upon judicial precedents viz. Hon’ble Delhi High Court judgment and order in the case of Samsung India Electronics Private Limited (ITA No. 453 of 2024, dated 22.08.2024) , Hon’ble Delhi High Court judgment and order in the case of Rampgreen Solutions Private Limited in ITA No. 340/2016 dated 27th May, 2016, and also decisions of Tribunal, to support its contentions. We are in agreement with the

15 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP contentions of the assessee, however, the same need verification. We are remitting the matter to TPO to verify the contentions of the assessee that these foreign exchange gains/losses have arisen wrt on revenue field wrt invoice raised for rendering of ITES segment, and accordingly treat the same as operating income while computing PLI of the assessee, and further in order to bring parity and to avoid distortion, accordingly it is also required to adjust PLI of the comparables. We order accordingly.

5.6.2 Income from sale of Scrips granted under ‘Services Export from India’ Scheme of Government of India

The ld. Counsel for the assessee submitted that income arising from sale of scrips granted under ‘Services Export from India Scheme’ of Government of India are part of the operating income, while authorities below have treated the same as non-operating in nature while computing PLI(OP/OC) of the assessee with respect to ‘Information Technology Enabled Services’ segment. It was submitted that such income are integral part of operating revenue from sale of scrips granted under ‘Services Export from India Scheme’ of Government of India with respect to export of ‘Information Technology Enabled Services’ segment, and should be treated as operating income. The assessee has placed copy of the aforesaid scheme of Government of India in the paper book filed with the Tribunal. The assessee has also placed reliance on certain judicial pronouncements of the Tribunal. We are of the considered view that the income from sale of scrips granted under ‘Services Export from India Scheme’ of Government of India , has been derived from the aforesaid scheme framed by Government of India , and is not derived wrt export revenue from export of services under the ‘Information Technology Enabled Services’ segment, and hence could not be stated to be derived from such export rather has been derived from scheme of Government of India. Thus, the source of income from sale of scrips granted under ‘Services Export from India Scheme’ is the scheme framed by Government of India , and not been derived from export of ITES. Thus, the said income cannot be stated to be income derived from operations, and rather is an non-operative

16 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP income arising from the scheme framed by Government of India. Thus, the source of income is the aforesaid scheme of GOI, and not from export of ITES. Reference is drawn to judgment and order(s) of Hon’ble Supreme Court in the case of Liberty India v. CIT, reported in (2009) 317 ITR 218(SC); CIT v. Sterling Foods(1999) 237 ITR 579(SC) ; Pandian Chemicals Ltd. v. CIT (2003) 262 ITR 278(SC). Thus, this contention of the assessee cannot be accepted and stands rejected. However for sake of parity and to avoid distortion, the same need to be excluded from the comparables also, while computing PLI of the comparables. We order accordingly.

5.6.3 Inclusion of ‘Virinchi Limited’ as comparable wrt Information Technology Enabled Services Segment The assessee is contending to include Virinchi Limited as comparable for computing ALP of international transaction entered into by the assessee with respect to ‘Information Technology Enabled Services’ Segment. The assessee has included ‘Virinchi Limited’ as comparable in its TP Study Report. The TPO excluded the same. The TPO has modified filters adopted by the assessee. The TPO did not specify any reasons for rejection of ‘Virinchi Limited’. The assessee raised its objection before ld. DRP. The assessee contended that ‘Virinchi Limited’ is functionally comparable. The segmental information is available. The said company ‘Virinchi Limited’ is engaged in sale of IT products and rendering of ITES services. It was submitted that ‘Virinchi Limited’ passed all the filters applied by TPO. Prayers were made to include ‘Virinchi Limited’ as comparable.The ld. DRP observed that ‘Virinchi Limited’ is into sale of IT products, and hence TPO rightly rejected ‘Virinchi Limited’ as comparable.Before us, the ld. Counsel for the assessee prayed for inclusion of ‘Virinchi Limited’ as comparable for computing ALP of International Transactions wrt ITES segment. It was submitted that the assessee is captive service provider to its AE being parent company in USA. The assessee has placed on

17 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP record audited accounts of ‘Virinchi Limited’ for the year ended 31st March, 2022(Page 703-724/PB). We have observed that the said company is an IT products & Services Company offering customized solutions . It is observed that the said company is engaged majorly into IT Products and Concentric Services, which means that it is selling a core hardware or software product alongside a tightly connected ring of supporting services that make that product work. It is also into ITES segment . We have observed that segment results are available for ‘IT Enabled Services’ Segment, but however, share of ITES segment in Virinchi’s total revenue, is less than 3% which is an insignificant share. Under these circumstances, when ITES segment contribute a very negligible and insignificant turnover/revenue to total turnover/revenue of Virinchi Limited, it will not be appropriate and safe to include the same as comparable as its core focus area of operations are into IT Products and Concentric Services. Thus, we upheld the orders of ld. DRP. We order accordingly.

5.6.4 Inclusion of Silgate Solutions Limited and Cosmic Global Limited

The assessee is seeking inclusion of Silgate Solutions Limited and Cosmic Global Limited as comparables in ITES segment, albeit the same were not taken as comparable by assessee itself in the TPSR submitted by the assessee itself before the authorities. It is for the first time before ld. DRP, the assessee sought inclusion of the aforesaid comparables. The ld. DRP rejected the inclusion of these comparables as the same were not part of TPSR. The assessee has raised contentions before us for its inclusion albeit these comparables were not part of the comparables proposed by the assessee in its TPSR submitted before the Revenue , and also the aforesaid comparables were never part of the searches conducted by TPO and hence could not be included by TPO in the selected comparables. We are of the considered view that there is no bar for the assessee

18 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP to seek inclusion of the comparable even for the first time before ld. DRP , and the ld. DRP ought to have considered its inclusion or otherwise of the aforesaid comparables based on whether it meets all the search criteria and also after doing necessary FAR analysis of the said comparables vis-à-vis assessee’s FAR. The proceedings before ld. DRP are extension of assessment, the objective being to compute income chargeable to tax within ambit and mandate of the 1961 Act. Since, however, the assessee is seeking inclusion of aforesaid comparables which were never part of TPSR, the onus is heavy on the assessee. It is also true that TPO modified the search filters while passing the TP order , which also possibly justify assessee to offer fresh comparables which meets modified search filters adopted by TPO. The contentions of the assessee’s wrt their inclusion as comparables for computing ALP of the international transactions entered into by the assessee wrt ITES segment, requires verification and inquiry, before arriving at the decision. Thus, we are remitting matter before ld. TPO to decide the same in accordance with our aforesaid directions. The ld. TPO is directed to pass speaking order with respect thereto on merits in accordance with law, after granting opportunity of being heard in accordance with principles of natural justice .The findings of ld. DRP are set aside. We order accordingly.

5.6.5 Exclusion of Vitae International Accounting Services Private Limited and Tech Mahindra Business Services Limited

The assessee is seeking exclusion of Vitae International Accounting Services Private Limited and Tech Mahindra Business Services Limited as comparables in ITES segment, albeit the same were part of TPSR submitted by the assessee itself. Thus, these two comparables were selected by the assessee itself in its TPSR submitted before the Revenue.These two comparables were also part of the comparables selected by TPO as per searches conducted by TPO as it met all the conditions of modified search filters adopted by TPO . It is for the first time before ld. DRP, the assessee sought exclusion of the aforesaid comparables. The ld. DRP rejected the exclusion of these comparables as

19 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP the business profile of these comparables are similar to that of the assesee, and hence the same were rightly included by the TPO. The assessee has raised contentions before us for its exclusion albeit these comparables were part of the comparables proposed by the assessee itself in its own TPSR submitted before the Revenue as well by the searches conducted by TPO based on modified search filters. We are of the considered view that there is no bar for the assessee to seek exclusion of its own comparable even if the same were part of its own TPSR , and the ld. DRP ought to have considered its Exclusion or otherwise of the aforesaid comparables based on whether it meets all the search criteria finally adopted , and also after doing detailed FAR analysis of the said comparables vis- à-vis assessee’s FAR. Merely saying that business profile of the comparables are similar to that of the assessee, and hence contentions of the assessee are rejected, is not sufficient. Detailed reasoning and justification are required before discarding contentions of the assessee. The ld. DRP passed a cryptic order, while it was required to pass a speaking order dealing with all the contentions of the assessee for seeking its exclusion, on merits in accordance with law. The proceedings before ld. DRP are extension of assessment, the objective being to compute income chargeable to tax within ambit and mandate of the 1961 Act. The findings of ld. DRP are set aside.Since, however, the assessee is seeking exclusion of aforesaid comparables which were part of its own TPSR, the onus is heavy on the assessee. It is also true that TPO modified the search filters while passing the TP order , which could possibly justify assessee to seek exclusion of its own comparables which do not meet modified search filters adopted by TPO. The contentions of the assessee requires verification and inquiry, before arriving at decision Thus, we are remitting matter before ld. TPO to decide the same in accordance with our aforesaid directions, and ld. TPO is directed to pass speaking order with respect thereto on merits in accordance with law, after granting opportunity of being heard in accordance with principles of natural justice . We order accordingly.

20 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP 5.6.6 Incorrect computation of Operating Margins of the comparables CES Limited , Microland Limited, I Services India Private Limited and Sundaram Business Services Limited

The assessee raised the issue of incorrect computation of operating margins of certain comparables. The ld. DRP directed vide para 6.5 to TPO to recalculate and apply correct margins of the comparables. The assessee is now aggrieved because as per assessee the ld. TPO did not apply correct margins of comparables despite directions of ld. DRP, and the assessee has submitted its own calculation of corrected margins of comparables in ITES segment, which is placed in paper book at page 483 and 527-540/PB. These calculations required verification. The matter is remitted to the file of the TPO to verify and apply correct margins wrt comparables in ITES segment , on merits in accordance with law, after providing opportunity of being heard in accordance with principles of natural justice.We order accordingly

5.7 Ground No. 22 is not pressed by the assessee , and hence accordingly disposed off.

5.8 Ground No. 23 to 26 are consequential in nature, and hence accordingly disposed off.

5.9. Ground No. 27 is premature at this stage, and hence accordingly disposed off.

order is pronounced in the Open Court on 27.07.2026 S Sd/- Sd/- (ANUBHAV SHARMA) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27.07.2026 *GP/Sr.PS* Copy forwarded to:

21 IT(TP)A No. 8/Del/2026 Tribal Fusion R & D L LP 1. Appellant 2. Respondent 3. CIT(E) 4. CIT 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI