DCIT (INTERNATIONAL TAXATION), NEW DELHI vs. M/S. SYNOPSYS (INDIA) PVT. LTD., NOIDA

This appeal by the Revenue is preferred against the order of the Commissioner of Income Tax [Appeals] - 44, New Delhi dated 02.11.2016 pertaining to assessment year 2011-12.

The solitary grievance of the revenue is that the ld. CIT(A) erred in excluding Infosys Technologies Ltd from the final list of comparables.

Briefly stated, the facts of the case are that the assessee, previously known as Virage Logic International — India Office is operating in India with the permission of the RBI as 100% export oriented unit and is registered with Software Technology Park. The assessee specifically focuses on development of Electronic Design Automation, EDA in view of memory complier, migration of memory compilers across technologies and foundries, design and development of next generation memory compilers, application of engineering and integration support, software engineering and support.

The international transactions during the year are as under:

Finally, the arm’s length adjustment u/s 92CA of the Act was computed as under:

The assessee carried the matter before the ld. CIT(A) contesting the exclusion of comparables taken by the TPO.

Before the ld. CIT(A), it was vehemently argued that Infosys Technologies Ltd is a software giant company and has been excluded by the Hon'ble Delhi High Court in the case of Aginity India Technologies Pvt Ltd in ITA No. 1204/2011. Relying on the decision of the Hon'ble High Court of Delhi, the ld. CIT(A), inter alia, excluded Infosys Technologies Ltd from the final list of comparables.

The revenue is aggrieved by this.

Before us, the ld. DR strongly supported the findings of the Assessing Officer.

Per contra, the ld. counsel for the assessee brought to our notice the decision of the co-ordinate bench in assessee’s own case for Assessment Year 2008-09 in ITA No.7043/DEL/2014.

We have carefully considered the orders of the authorities below. We find that the issue is squarely covered in favour of the assessee and against the revenue by the decision of the Hon'ble Jurisdictional High Court in the case of Aginity India Technologies Pvt Ltd [supra] which has been followed by the co-ordinate bench in assessee’s own case in Assessment Year 2008-09. The relevant findings of the Tribunal read as under:

As no distinguishing decision has been brought on record to our notice by the Revenue, respectfully following the decision of the co- ordinate bench, we decline to interfere with the findings of the ld. CIT(A). Ground raised by the Revenue is dismissed.

In the result, the appeal of the Revenue in is dismissed.