AIRMEET NETWORKS PRIVATE LIMITED,BENGALURU vs. ASSESSING OFFICER, BENGALURU

ITA 1487/BANG/2026Status: DisposedITAT Bangalore29 September 2026AY 2022-235 pages
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What were the facts?

The assessee, M/s. Airmeet Networks Pvt. Ltd., a wholly owned subsidiary of Airmeet Inc., provides software development, marketing support, and resale services. For Assessment Year 2022-23, its case was selected for scrutiny. The Assessing Officer (AO) referred the matter to the Transfer Pricing Officer (TPO) for determining the arm's length price of international transactions with its associated enterprise (AE). The TPO made adjustments for two segments and interest on delayed receivables. The AO issued a draft assessment order, and the assessee's objections before the Dispute Resolution Panel (DRP) led to directions for the TPO. The TPO revised the adjustments, reducing them for software development, maintaining them for marketing support, and confirming them for delayed receivables. The AO passed the final assessment order, which is now under appeal.

What did the Tribunal hold?

The Tribunal held that the three companies, Mindtree Ltd. (turnover Rs. 10,525.3 crores), LTI Mindtree Ltd. (turnover Rs. 14,406 crores), and Tata Consultancy Services (turnover Rs. 1,60,341 crores), should be excluded from the comparable set for the software development segment. The reasoning was that their massive turnovers, brand value, and scalability of operations and assets are not comparable to the assessee's FAR, which has a turnover of Rs. 55.6 crores. The Tribunal also directed the AO to adopt LIBOR + appropriate markup or any other suitable rate for benchmarking interest on receivables, acknowledging that the assessee raised invoices in USD and the TPO had noted that LIBOR + markup should be applied in such cases. The appeal was partly allowed.

What were the issues?

1. Whether the Tribunal should exclude certain comparable companies (Mindtree Ltd., LTI Mindtree Ltd., and Tata Consultancy Services) from the transfer pricing analysis for the software development segment on the grounds that their turnover significantly exceeds the assessee's turnover, impacting comparability. - Assessee's contention: These companies have turnovers more than 200 times that of the assessee (Rs. 55.6 crores), possess huge brand value and scalability, making their functional, asset, and risk (FAR) profile incomparable. Inclusion would distort the comparable set, leading to an incorrect margin calculation for the assessee. - Revenue's contention: The TPO correctly applied filters and selected 22 comparable companies, and the AO's and TPO's orders should be confirmed. 2. Whether the transfer pricing adjustment for interest on delayed receivables is required, and if so, what benchmark rate should be applied. - Assessee's contention: No adjustment is needed as the company is debt-free. Alternatively, since invoices were raised in foreign currency (USD), the benchmark should be LIBOR + appropriate markup or SOFR, not the SBI PLR rate of 12.26%. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 92CA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI SOUNDARARAJAN K.

For Respondent: Dr. Divya K.J., CIT – DR

PER SHRI SOUNDARARAJAN K., JUDICIAL MEMBER:

This is an appeal filed by the assessee challenging the final assessment order dated 09/01/2026 in respect of the A.Y. 2022-23. 1 M/s. Airmeet Networks Pvt. Ltd.

2.

The brief facts of the case are that the assessee is a wholly owned subsidiary of Airmeet Inc. and is engaged in providing software development services. The assessee also pro

The order continues below.

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