Genesis Integrating Systems India Pvt Ltd. v. DCIT

M/S Xchanging Solutions Limited, Bangalore vs. The Deputy Commissioner of Income Tax Circle-7(1)(2), Bangalore

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

Bench: Shri George George K, Jm & Shri B.R.Baskaran, Am It(Tp)A No.3358/Bang/2018 : Asst.Year 2014-2015 M/S.Xchanging Solutions Limited The Dy.Commissioner Of Plot No.13, 14, 15 Sjr I-Park Income-Tax, Circle 7(1)(2) V. Bangalore. Epip Industrial Area, Phase I Whitefield, Bangalore – 560066. Pan : Aafcs9303L. (Appellant) (Respondent) Appellant By : Sri.Chavali Narayanan, Ca Respondent By : Sri.Sumer Singh Meena, Cit(Osd)-Dr Date Of Pronouncement : 01.11.2021 Date Of Hearing : 28.10.2021 O R D E R Per George George K, Jm This Appeal At The Instance Of The Assessee Is Directed Against Final Assessment Order Dated 22.10.2018 Passed U/S 143(3) R.W.S. 144C Of The I.T.Act. The Relevant Assessment Year Is 2014-2015. 2. The Assessee Has Raised Various Grounds & Sub- Grounds. However, During The Course Of Hearing, The Learned Ar Limited His Submission To Grounds No.4.6(D), 4.11 To 4.14, 5.1 & 5.2. The Surviving Grounds Read As Follows:-

…ate Limited v. DCIT (supra), reads as follows:- “38. We note that Ld.AO/TPO has applied filter of more than Rs.1 crore, but did not put an upper limit to the filter. This Tribunal in case of Genesis Integrating Systems India Pvt Ltd vs DCIT reported in (2012) 53 SOT 159 and various other decisions have held that, companies having turnover in excess of Rs.200 crores cannot be compared with companies having turnover less than Rs.200 crore. This preposition has been accepted by Hon’ble Bombay High Court in case of CIT vs Pentair Water Pvt.Ltd., by order dated 16/09/2015 in ITA No. 18/2015. Hon’ble Court upheld rejec…

M/S. Arista Networks India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 1(1)(1), Bangalore

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

Bench: Shri George George K, Jm & Shri B.R.Baskaran, Am It(Tp)A No.2440/Bang/2019 : Asst.Year 2015-2016 M/S.Arista Networks India Private The Dy.Commissioner Of Limited, Global Technology Park Income-Tax, Circle 1(1)(1) V. Bangalore. Tower A & B, 11Th Floor Marathahalli Outer Ring Road Devarabessanhalli, Varthur Hobli Bengaluru – 560 103. Pan : Aaica9663J. (Appellant) (Respondent) Appellant By : Sri.Padamchand Khincha Respondent By : Sri.B.K.Panda, Cit-Dr Date Of Pronouncement : 05.10.2021 Date Of Hearing : 30.09.2021 O R D E R Per George George K, Jm This Appeal At The Instance Of The Assessee Is Directed Against The Final Assessment Order Dated 01.10.2019 Passed U/S 143(3) R.W.S. 144C Of The I.T.Act. The Relevant Assessment Year Is 2015-2016. 2. All The Issues Raised In This Appeal Relate To Transfer Pricing Adjustment.

…te Limited v. DCIT (supra), reads as follows:- “38. We note that Ld.AO/TPO has applied filter of more than Rs.1 crore, but did not put an upper limit to the filter. This Tribunal in case of Genesis Integrating Systems India Pvt Ltd vs DCIT reported in (2012) 53 SOT 159 and various other decisions have held that, companies having turnover in excess of Rs.200 crores cannot be compared with companies having turnover less than Rs.200 crore. This preposition has been accepted by Hon’ble Bombay High Court in case of CIT vs Pentair Water Pvt.Ltd., by order dated 16/09/2015 in ITA No. 18/2015. Hon’ble Court upheld rejec…

M/S. Ef Information Systems Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle - 11(3), Bangalore

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

…d by both sides in light of records placed before us. We note that Ld.AO/TPO has applied filter of more than Rs.1 crore but did not put an upper limit to the filter. This Tribunal in case of Genesis Integrating Systems India Pvt Ltd vs DCIT reported in (2012) 53 SOT 159 and various other decisions have held that, companies having turnover in excess of 200 crores cannot be compared with companies having turnover less than Rs.200 crore. This preposition has been accepted by Hon’ble Bombay High Court in case of CIT vs Pentair Water Pvt.Ltd., by order dated 16/09/2015 in ITA No. 18/2015. Hon’ble court upheld rejectio…

M/S. Zynga Game Network India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 7(1)(2), Bangalore

Accordingly this ground raised by assessee stands allowed for statistical purposes

Bench: Shri. B.R Baskaran & Smt. Beena Pillaiassessment Year : 2015-16

…both sides in light of records placed before us. 38. We note that Ld.AO/TPO has applied filter of more than Rs.1 crore, but did not put an upper limit to the filter. This Tribunal in case of Genesis Integrating Systems India Pvt Ltd vs DCIT reported in (2012) 53 SOT 159 and various other decisions have held that, companies having turnover in excess of Rs.200 crores cannot be compared with companies having turnover less than Rs.200 crore. This preposition has been accepted by Hon’ble Bombay High Court in case of CIT vs Pentair Water Pvt.Ltd., by order dated 16/09/2015 in ITA No. 18/2015. Hon’ble Court upheld rejec…

DCIT, Bangalore vs. M/S Aztec Soft Limited, Bangalore

In the result, the appeal of the revenue is dismissed and the appeal of the assessee is treated as allowed

Bench: Shri B. R. Baskaran & Smt. Beena Pillai

…nologies Ltd., (iv) Satyam Computer Services Ltd., (v) iGate Global Solutions Ltd. The CIT(A) in coming to the above conclusion placed reliance on the decision of the ITAT Bangalore in the case of Genisys Integrating Systems (India) (P) Ltd. v. Dy. CIT [2012] 53 SOT 159/20 taxmann.com 715 (Bang.) wherein it was held when there is a limit for the lower end for identifying the IT(TP)A Nos.349 & 878/Bang/2014 M/s. Mindtree Ltd., Bangalore Page 7 of 17 comparable companies, there is no reason why there should not be an upper limit also, as size matters in business. 17.1 The learned DR submitted that high turnover is…

DCIT, Bangalore vs. Sri. Jivheshwara Credit Co-Operative Society Ltd., Bangalore

In the result, the appeal of the revenue is dismissed and the appeal of the assessee is treated as allowed

Bench: Shri B. R. Baskaran & Smt. Beena Pillai

…nologies Ltd., (iv) Satyam Computer Services Ltd., (v) iGate Global Solutions Ltd. The CIT(A) in coming to the above conclusion placed reliance on the decision of the ITAT Bangalore in the case of Genisys Integrating Systems (India) (P) Ltd. v. Dy. CIT [2012] 53 SOT 159/20 taxmann.com 715 (Bang.) wherein it was held when there is a limit for the lower end for identifying the IT(TP)A Nos.349 & 878/Bang/2014 M/s. Mindtree Ltd., Bangalore Page 7 of 17 comparable companies, there is no reason why there should not be an upper limit also, as size matters in business. 17.1 The learned DR submitted that high turnover is…

Essentra (India) Pvt Ltd, Bangalore vs. Income Tax Officer, Ward-2(1)(4), Bangalore

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes

Bench: Shri N.V Vasudevan, Vice Presidnet & Shri B.R Baskaran

…g ALP" 29. Moreover, the above argument of the assessee for grant of capacity utilization adjustment is also supported by the following decision of Bangalore ITAT in the case of Genisys Integrating Systems (India) (P.) Ltd. v. Dy. CIT[2012120 taxmann.com 7.15/53 SOT 159. Relevant extract of the decision is under:— "15.2 We agree with this contention of the counsel for the assessee. All the comparables have to be compared on similar standards and the assessee cannot be put in a disadvantageous position, when in the case of other companies adjustments for under utilization of manpower is given. The assessee should…

Marlabs Software Pvt. Ltd., Bangalore vs. Asst.C.I.T., Bangalore

In the result appeal filed by assessee stands allowed as indicated hereinabove

Bench: Shri. B. R. Baskaran & Smt. Beena Pillaiit(Tp)A No.544/Bang/2015 Assessment Year : 2010-11

…d by both sides in light of records placed before us. We note that Ld.AO/TPO has applied filter of more than Rs.1 crore but did not put an upper limit to the filter. This Tribunal in case of Genesis Integrating Systems India Pvt Ltd vs DCIT reported in (2012) 53 SOT 159 and various other decisions have held that, companies having turnover in excess of 200 crores cannot be compared with companies having turnover less than Rs.200 crore. This preposition has been accepted by Hon’ble Bombay High Court in case of CIT vs Pentair Water Pvt.Ltd., by order dated 16/09/2015 in ITA No. 18/2015. Hon’ble court upheld rejectio…

M/S. Metricstream Infotech (India) Private Limited, Bengaluru vs. Assistant Commissioner of Income Tax, Circle- 4(1)(2), Bangalore

In the result appeal filed by assessee stands allowed as indicated hereinabove

Bench: Shri. B. R. Baskaran & Smt. Beena Pillaiit(Tp)A No.2347/Bang/2019 Assessment Year : 2015 – 16

…te that Ld.AO/TPO has applied filter of more than Rs.1 crore, but did not put an upper limit to the filter. This Tribunal in case of Genesis Integrating Systems India Pvt Ltd vs Page 15 of 36 IT(TP)A No.2347/Bang/2019 A. Y : 2015 – 16 DCIT reported in (2012) 53 SOT 159 and various other decisions have held that, companies having turnover in excess of Rs.200 crores cannot be compared with companies having turnover less than Rs.200 crore. This preposition has been accepted by Hon’ble Bombay High Court in case of CIT vs Pentair Water Pvt.Ltd., by order dated 16/09/2015 in ITA No. 18/2015. Hon’ble court upheld rejec…

M/S Broadcom Communications Technologies Private Limited, Bangalore vs. Additional Commissioner of Income Tax Special Range-1, Bangalore

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

Bench: Shri B. R. Baskaran & Smt. Beena Pillaiit(Tp)A No. 349/Bang/2019 Assessment Year: 2010-11

…ovider. 7. On the contrary, the Ld D.R submitted that Turnover filter cannot be a relevant criteria to reject a company as not comparable and it was so held by the co-ordinate bench in the case of Societe Generale Global Solution Centre P Ltd vs. DCIT (2012)(53 SOT 159)(20 taxmann.com 715). Accordingly he submitted that the turnover filter should not be applied. 8. We heard rival contentions and perused the record. With regard to the application of turnover filter, the Ld A.R placed his reliance on the decision rendered by the co-ordinate bench in the case of KBACE Technologies Pvt Ltd (supra), wherein the co-o…

ITO, Bangalore vs. M/S Cenduit India Services Pvt. Ltd., Bangalore

In the result, the appeal filed by the revenue is dismissed and the CO is partly allowed

Bench: Shri N.V. Vasudevan & Shri B.R.Baskaran

…chnologies Ltd., (iv) Satyam Computer Services Ltd., (v) iGate Global Solutions Ltd. The CIT(A) in coming to the above conclusion placed reliance on the decision of the ITAT Bangalore in the case of Genisys Integrating Systems (India) (P) Ltd. Vs. DCIT (2012) 53 SOT 159 (Bang.) wherein it was held when there is a limit for the lower end for identifying the comparable companies, there is no reason why there should not be an upper limit also, as size matters in business. 17.1. The learned DR submitted that high turnover is not a relevant criterion to regard a company as not comparable, so long as the two companies…

M/S Fulcurm Fund Services India Pvt Ltd, Bangalore vs. Income Tax Officer Ward-3(1)(1), Bangalore

In the result, the appeal of assessee is partly allowed

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

…l in the case of Autodesk (I) P. Ltd. v. DCIT [2018] 96 taxmann.com 263 [Bang. Trib.] after analysing the entire cases on the point, came to the conclusion that the decision rendered by the Tribunal in the case of Genesis Integrated Systems (I) P. Ltd. [2012] 53 SOT 159 lays down the correct law on the application of turnover filter and that decision has to be followed. He pointed out that the DRP in the present case has followed the ruling in the case of Genesis Integrated Systems (I) P. Ltd. (supra) and therefore the order of DRP has to be upheld. 18. We have given a careful consideration to the rival submissio…

DCIT, Bangalore vs. M/S Northern Operating Services, Bangalore

In the result, the appeal by the revenue is dismissed

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaran

…l in the case of Autodesk (I) P. Ltd. v. DCIT [2018] 96 taxmann.com 263 [Bang. Trib.] after analysing the entire cases on the point, came to the conclusion that the decision rendered by the Tribunal in the case of Genesis Integrated Systems (I) P. Ltd. [2012] 53 SOT 159 lays down the correct law on the application of turnover filter and that decision has to be followed. He pointed out that the DRP in the present case has followed the ruling in the case of Genesis Integrated Systems (I) P. Ltd. (supra) and therefore the order of DRP has to be upheld. 18. We have given a careful consideration to the rival submissi…

DCIT, Bangalore vs. M/S Independent Technology Systems (India) Pvt. Ltd., Bangalore

In the result, the appeal by the revenue is partly allowed and the CO by the assessee is also partly allowed

Bench: Shri N.V. Vasudevan & Shri Inturi Rama Rao

…chnologies Ltd., (iv) Satyam Computer Services Ltd., (v) iGate Global Solutions Ltd. The CIT(A) in coming to the above conclusion placed reliance on the decision of the ITAT Bangalore in the case of Genisys Integrating Systems (India) (P) Ltd. Vs. DCIT (2012) 53 SOT 159 (Bang.) wherein it was held when there is a limit for the lower end for identifying the comparable companies, there is no reason why there should not be an upper limit also, as size matters in business. 17.1. The learned DR submitted that high turnover is not a relevant criterion to regard a company as not comparable, so long as the two companies…