DCIT v. Quark Systems (P.) Ltd.

38 SOT 307Income Tax Appellate Tribunal2010#540 most cited

What is DCIT v. Quark Systems (P.) Ltd. authority for?

An assessee is not estopped or precluded from seeking the exclusion of a company from its Transfer Pricing study comparables, even if initially selected, if it can demonstrate valid reasons for non-comparability.

179

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2015 to 2026.

Also referred to as

DCIT v. Quark Systems (P.) Ltd. · Section 92CA(3) · Section 92C(2) · Section 92D · Transfer Pricing comparables · exclusion of comparable companies · assessee not estopped · TP study comparable selection · benchmarking analysis · functional analysis

Also reported as

132 TTJ 14 ITR (Trib) 606

Sections most often in play

Section 143(3)Section 234BSection 92CA(3)Section 142(1)Section 143(2)Section 14ASection 271(1)(c)Section 271AA

Issues it is cited on

contemporaneous datamultiple year datacaptive service providerfunctional analysissection 92c(2)working capital adjustmentfar analysissection 92drelated party transactioncomparable companiestested partybenchmarking analysis

Judgments citing DCIT v. Quark Systems (P.) Ltd.

M/S Citrix R & D I P Ltd, Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

In the result, the appeal of the assessee is treated as partly allowed

ITA 1289/BANG/2014[2009-10]Status: DisposedITAT Bangalore19 Feb 2016AY 2009-10

Bench: Shri Abraham P George & Shri Vijay Pal Rao

For Appellant: Shri P.K.Prasad, CAFor Respondent: Smt. S.Praveena, Addl.CIT
Section 92C

…IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE ‘B’ BENCH, BANGALORE BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER IT(TP)A No.1289(BNG.)/2014 (Assessment year : 2009-10) M/s Citrix R&D India Pvt. Ltd. Prestige Dynasty No.33, Ulsoor Road, Bangalore-560 042 PAN No.AABCN3639C Appellant Vs The Deputy Commissioner of Income Tax, Circle-11(2), Bangalore Respondent Assessee by : Shri P.K.Prasad, CA Revenue by : Smt. S.Praveena, Addl.CIT Date of hearing : 11-02-2016 Date of pronouncement : 19-02-2016 O R D E R PER SHRI ABRAHAM P GEORGE, AM; In this appeal filed by the…

ITO vs. M/S Infinera India Pvt. Ltd., Bangalore

In the result, the appeal by the department is partly

ITA 294/BANG/2013[2008-09]Status: DisposedITAT Bangalore20 Jan 2016AY 2008-09

Bench: Smt. Asha Vijayaraghavan & Shri Inturi Rama Rao

For Appellant: Shri Eric Mehta, CAFor Respondent: Dr. P.K.Srihari, Addl. CIT (DR)
Section 10A

…xercise. It was submitted that significant differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…

M/S Obopay Mobile Technology India Private Limited, Bangalore vs. DCIT, Bangalore

In the result the appeal by the Assessee is partly allowed while the appeal by the Revenue is dismissed

ITA 469/BANG/2015[2010-11]Status: DisposedITAT Bangalore08 Jan 2016AY 2010-11

Bench: Shri N.V. Vasudevan & Shri Abraham P. Georgeit(Tp)A No.469/Bang/2015 Assessment Year : 2010-11 M/S.Obopay Mobile Vs. The Deputy Commissioner Technology India Private Of Income Tax, Circle 5 Limited, Enzyme Jnc Business (1)(2), Bengaluru. Center, 2Nd Floor, Mpk Mansion, No.18, Guava Garden, 5Th Block, Koramangala, Bengaluru-560 095. Pan No. Aaaco9074H Appellant Respondent

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Ms.Neera Malhotra, CIT (DR)
Section 143(3)Section 144CSection 92Section 92CSection 92E

…xercise. It was submitted that significant differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…

DCIT, Bangalore vs. M/S Obopay Mobile Technology India Pvt. Ltd., Bangalore

In the result the appeal by the Assessee is partly allowed while the appeal by the Revenue is dismissed

ITA 388/BANG/2015[2010-11]Status: DisposedITAT Bangalore08 Jan 2016AY 2010-11

Bench: Shri N.V. Vasudevan & Shri Abraham P. Georgeit(Tp)A No.469/Bang/2015 Assessment Year : 2010-11 M/S.Obopay Mobile Vs. The Deputy Commissioner Technology India Private Of Income Tax, Circle 5 Limited, Enzyme Jnc Business (1)(2), Bengaluru. Center, 2Nd Floor, Mpk Mansion, No.18, Guava Garden, 5Th Block, Koramangala, Bengaluru-560 095. Pan No. Aaaco9074H Appellant Respondent

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Ms.Neera Malhotra, CIT (DR)
Section 143(3)Section 144CSection 92Section 92CSection 92E

…xercise. It was submitted that significant differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…

M/S. Fcg Software Services (India) Pvt. Ltd., Bangalore vs. ITO, Bangalore

In the result the appeal by the Assessee is partly allowed

ITA 1447/BANG/2010[2006-07]Status: DisposedITAT Bangalore08 Jan 2016AY 2006-07

Bench: Shri. N. V. Vasudevan & Shri. Abraham P.George

For Appellant: Shri. Vikram Vijayaraghavan, AdvocateFor Respondent: Ms.Neeru Malhotra, CIT-(DR)
Section 143(3)Section 92Section 92C

…apart from reiterating the stand taken as above in the application for admission of additional ground, further placed reliance on the decision of the Hon’ble Special Bench in the case of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207 wherein it was held that a taxpayer is not estopped from pointing out a mistake in the assessment though such mistake is the result of evidence adduced by the taxpayer. 12. The learned DR opposed the prayer for admission of additional ground. According to him the Assessee is taking a totally new plea for the first time before Tribunal by way of a…

Qualcomm India Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 6059/DEL/2012[2008-09]Status: DisposedITAT Delhi06 Jan 2016AY 2008-09

Bench: Smt Diva Singh & Sh.O.P.Kant

Section 143(1)Section 143(2)

…ning its financial results of 2008-09 assessment year as the selection of the said comparable was done on the basis of the financial data of 2006-07 assessment year. 3.2. The decisions of the Special Bench in the case of DCIT vs Quark Systems Pvt. Ltd. [2010] 4 ITR 606 (SB) Chandigarh Bench and JCIT vs Verizon India Pvt. Ltd. in ITA no.2766/Del/2010, it was submitted supported the prayer for its exclusion. 3.3. In support of the said request it was further submitted that from 2009-10 assessment year onwards neither the assessee nor the Income Tax Department as per record have considered Saket Projects Ltd. as a c…

Tevapharm India P.Ltd, Mumbai vs. DCIT Cir 15(3)(1), Mumbai

In the result, appeal of the assessee is allowed for statistical purposes

ITA 731/MUM/2015[2010-11]Status: DisposedITAT Mumbai31 Dec 2015AY 2010-11

Bench: Shri D. Karunakara Rao & Shri Pawan Singhi.T.A. No.731/M/2015 (Assessment Year: 2010-2011) फनाभ/ M/S. Tevapharm India Private Dcit-15(3)(1), Limited (Formerly Known As Aayakar Bhavan, Vs. Ratiopharm India Private M.K. Road, Limited), 402, Omega, Mumbai – 400 020. Hiranandani Gardens, Powai, Mumbai – 400 076. स्थामी रेखा सं./ Pan : Aabcr7561F (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) अऩीराथी की ओय से / Appellant By : Shri Dhanesh Bafna & Shri Harish Arora प्रत्मथी की ओय से/ Respondent By : Ms. Rupinder Brar, Dr

For Appellant: Shri Dhanesh Bafna & ShriFor Respondent: Ms. Rupinder Brar, DR
Section 154Section 92C(2)Section 92D

…rable Asian, with event segment, should also be excluded from the list of comparables. In support of such exclusion of assessee‟s comparable, Ld Counsel for the assessee relied on the Special Bench decision in the case of DCIT vs. Quark Systems (P) Ltd [2010] 38 SOT 307 (Chd.) (SB), which is relevant for the proposition that the assessee is allowed to plea for exclusion of a comparable from the list of comparables. The said Special Bench decision has answered the question ie whether even if the assessee had taken „D‟ as comparable in its TP study, still it was entitled to point out to Tribunal that said enterpri…

M/S Arm Embedded Technologies Pvt. Ltd., Bangalore vs. DCIT, Bangalore

In the result, both the appeals are partly allowed for statistical purposes

ITA 1161/BANG/2011[2007-08]Status: DisposedITAT Bangalore01 Dec 2015AY 2007-08

Bench: Smt. Asha Vijayaraghavan & Shri Abraham P. George

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Shri I.P.S. Bindra, CIT(DR-I)
Section 10ASection 143(3)Section 92C

…xercise. It was submitted that significant differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…

M/S. Arm Embedded Technologies Pvt. Ltd, Bangalore vs. DCIT, Bangalore

In the result, both the appeals are partly allowed for statistical purposes

ITA 1112/BANG/2010[2006-07]Status: DisposedITAT Bangalore01 Dec 2015AY 2006-07

Bench: Smt. Asha Vijayaraghavan & Shri Abraham P. George

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Shri I.P.S. Bindra, CIT(DR-I)
Section 10ASection 143(3)Section 92C

…xercise. It was submitted that significant differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…

Moog Controls (India) Private Limited, Bangalore vs. CIT, Bangalore

In the result, the appeal by the assessee is partly allowed for statistical purposes

ITA 551/BANG/2015[2009-10]Status: DisposedITAT Bangalore27 Nov 2015AY 2009-10

Bench: Smt. Asha Vijayaraghavan & Shri Abraham P. George

For Appellant: Shri K.R. Vasudevan, AdvocateFor Respondent: Shri Sunil Kumar Agarwala, Jt. CIT(DR)
Section 92C

…nt differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems IT(TP)A No.551/Bang/2015 Page 8 of 34 Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…

M/S. Support.Com India Pvt. Ltd., Bangalore vs. ITO, Bangalore

In the result, the appeal filed by the assessee is partly allowed

ITA 1340/BANG/2010[2006-07]Status: DisposedITAT Bangalore04 Nov 2015AY 2006-07

Bench: Smt. Asha Vijayaraghavan & Shri Jason P. Boaz

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri G.R. Reddy, CIT-I(DR)
Section 143(3)Section 92C

…xercise. It was submitted that significant differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…

DCIT, Bangalore vs. M/S Unisys India (P) Limited, Bangalore

ITA 70/BANG/2015[2009-10]Status: DisposedITAT Bangalore30 Sept 2015AY 2009-10

Bench: Shri N.V. Vasudevan & Shri Abraham P. George

For Appellant: Shri Kanchan Kaushal, CAFor Respondent: Shri G.R.Reddy, CIT(DR)
Section 10A

…2015 Page 15 of 37 27. The learned counsel for the Assessee in support of the admission of additional ground placed reliance on the decision of the Hon’ble Special Bench in the case of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207 wherein it was held that a taxpayer is not estopped from pointing out a mistake in the assessment though such mistake is the result of evidence adduced by the taxpayer. The learned counsel further submitted that the aforesaid two companies were held to be software product companies and therefore not comparable with software development service pro…

M/S Unisys India Private Limited, Bangalore vs. DCIT, Bangalore

ITA 67/BANG/2015[2009-10]Status: DisposedITAT Bangalore30 Sept 2015AY 2009-10

Bench: Shri N.V. Vasudevan & Shri Abraham P. George

For Appellant: Shri Kanchan Kaushal, CAFor Respondent: Shri G.R.Reddy, CIT(DR)
Section 10A

…2015 Page 15 of 37 27. The learned counsel for the Assessee in support of the admission of additional ground placed reliance on the decision of the Hon’ble Special Bench in the case of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207 wherein it was held that a taxpayer is not estopped from pointing out a mistake in the assessment though such mistake is the result of evidence adduced by the taxpayer. The learned counsel further submitted that the aforesaid two companies were held to be software product companies and therefore not comparable with software development service pro…

DCIT vs. M/S Novell Software Development (India) Pvt. Ltd., Bangalore

In the result the appeal by the Assessee is partly allowed while the appeal by the Revenue is dismissed

ITA 1223/BANG/2013[2008-09]Status: DisposedITAT Bangalore30 Sept 2015AY 2008-09

Bench: Shri N.V. Vasudevan & Shri Abraham P. George

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Shri G.R. Reddy, CIT-I(DR)
Section 92Section 92CSection 92E

…xercise. It was submitted that significant differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…

Novell Software Development (India) Private Limited, Bangalore vs. DCIT, Bangalore

In the result the appeal by the Assessee is partly allowed while the appeal by the Revenue is dismissed

ITA 1106/BANG/2013[2008-09]Status: DisposedITAT Bangalore30 Sept 2015AY 2008-09

Bench: Shri N.V. Vasudevan & Shri Abraham P. George

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Shri G.R. Reddy, CIT-I(DR)
Section 92Section 92CSection 92E

…xercise. It was submitted that significant differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…

Software Ag Bangalore Technologies Private Limited, Bangalore vs. ITO, Bangalore

In the result, the appeal by the Assessee is partly allowed

ITA 1306/BANG/2011[2007-08]Status: DisposedITAT Bangalore30 Sept 2015AY 2007-08

Bench: Shri N. V. Vasudevan & Shri.Abraham P.Georgeit(Tp)A No.1306/Bang/2011 Assessment Year : 2007-08

For Appellant: Shri Chavali Naryana, CAFor Respondent: ShrI G.R. Reddy, CIT(DR-I)
Section 10ASection 143(3)Section 92

…parable companies. 14. The learned counsel for the Assessee in support of the admission of additional ground placed reliance on the decision of the Hon’ble Special Bench in the case of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207 wherein it was held that a taxpayer is not estopped from pointing out a mistake in the assessment though such mistake is the result of evidence adduced by the taxpayer. The learned counsel further submitted that the aforesaid two companies were held to be software product companies and therefore not comparable with software development service p…

Amd India Private Limited, Bangalore vs. ITO, Bangalore

In the result, the appeal of the Assessee is partly allowed

ITA 1244/BANG/2011[2007-08]Status: DisposedITAT Bangalore23 Sept 2015AY 2007-08

Bench: Shri N.V. Vasudevan & Shri Abraham P. George

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri G.R.Reddy, CIT-I(DR)
Section 10ASection 143(3)Section 144Section 92CSection 92C(2)Section 92D

…before DRP the Assessee did not object to choosing these two companies as comparable companies. 11. The learned counsel for the Assessee in support of the admission of additional ground placed reliance on the decision of the Hon’ble Special Bench in the Ltd. 38 SOT 207 wherein it was held that a taxpayer is not estopped from pointing out a mistake in the assessment though such mistake is the result of evidence adduced by the taxpayer. The learned counsel further submitted that the aforesaid two companies were held to be software product companies and therefore not comparable with software development service pr…

M/S. Misys Software Solutions (India) Pvt. Ltd., Bangalore vs. ITO, Bangalore

In the result, the assessee's appeal is partly allowed

ITA 1425/BANG/2010[2006-07]Status: DisposedITAT Bangalore23 Sept 2015AY 2006-07
For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Shri Farhat Hussain Qureshi, CIT(D.R)
Section 10ASection 133(6)Section 143(1)Section 143(3)Section 144C(5)Section 92C

…xercise. It was submitted that significant differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…

Deputy Commissioner of Income Tax, Circle-12(3), Bangalore vs. M/S Software Ag Bangalore Technolgies P Ltd, Bangalore

In the result, both the appeals by the assessee and the Revenue are partly allowed

ITA 1343/BANG/2014[2009-10]Status: DisposedITAT Bangalore04 Sept 2015AY 2009-10

Bench: Shri N.V. Vasudevan & Shri S. Rifaur Rahman

For Appellant: Shri Chavali Narayan, C.AFor Respondent: Dr. P.K. Srihari, Addl. CIT(DR)
Section 92

…xercise. It was submitted that significant differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…

Software Ag Bangalore Techn Pvt Ltd., Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

In the result, both the appeals by the assessee and the Revenue are partly allowed

ITA 1291/BANG/2014[2009-10]Status: DisposedITAT Bangalore04 Sept 2015AY 2009-10

Bench: Shri N.V. Vasudevan & Shri S. Rifaur Rahman

For Appellant: Shri Chavali Narayan, C.AFor Respondent: Dr. P.K. Srihari, Addl. CIT(DR)
Section 92

…xercise. It was submitted that significant differences in size of the companies would impact comparability. In this regard our attention was drawn to the decision of the Special Bench of the ITAT Chandigarh Bench in the case of DCIT v. Quark Systems Pvt. Ltd. 38 SOT 207, wherein the Special Bench had laid down that it is improper to proceed on the basis of lower limit of 1 crore turnover with no higher limit on turnover, as the same was not reasonable classification. Several other decisions were referred to in this regard laying down identical proposition. We are not referring to those decisions as the decision o…