“comparable companies”

Vmware Software India Private 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

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.2127/Bang/2017 : Asst.Year 2012-2013 M/S.Vmware Software India The Deputy Commissioner Of Private Limited, Kalyani Magnum Income-Tax, Circle 7(1)(2) V. Bangalore. Block-I, 3Rd Floor 165/2 Doraisanipalya, Iim Post Bannerghatta Road Bengaluru – 560 076. Pan : Aaccv4573E. (Appellant) (Respondent) Appellant By : Sri.T.Suryanaranayana, Advocate Respondent By : Dr.Manjunath Karkihalli, Cit -Dr Date Of Pronouncement : 17.06.2022 Date Of Hearing : 03.06.2022 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 24.01.2017 Passed U/S 143(3) R.W.S. 144C(13) Of The I.T.Act. The Relevant Assessment Year Is 2012-2013. 2. The Issues Raised In The Appeal Are As Follows:- (I) Validity Of The Impugned Final Assessment Order; (Ii) Transfer Pricing (Tp) Adjustment Of Rs.26,85,43,457 Made By The Transfer Pricing Officer (Tpo) Towards The International Transactions Of Provision Of Contrct Software Development & Information Technology Enabled Services To The Assessee’S Associated Enterprises (Aes); (Iii) Addition Of Rs.7,62,39,388 Being The Alleged Suppressed Income Of The Assessee; & 2 It(Tp)A No.2127/Bang/2017. M/S.Vmware Software India Private Limited.

using data as at the time of assessment proceedings, instead of that available as on the date of preparing the TP documentation for comparable companies while determining the arm's length price; 10. On the facts and circumstances of the case, the learned Assessing Officer in pursuance of the directions ... circumstances of the case, the learned Assessing Officer in pursuance of the directions of the learned Panel erred in upholding the rejection of comparable companies considered in the TP documentation with respect to software development service (viz. Helios and Matheson Information Technology Limited, IDBI Intech Ltd, Allied Digital Services

Ibm India Private Limited, Bangalore vs. Joint Commissioner of Income Tax, Circle-3(1)(1), Bangalore

In the result, the appeal filed by the assessee is dismissed

Bench: Shri Chandra Poojari & Smt. Beena Pillai

account for, inter alia, differences in (i) marketing expenditure, (ii) research and development expenditure, and (iii) risk profile between the Appellant and the comparable companies. The Hon'ble DRP erred in upholding the actions of the learned TPO/ learned AO. 9. Other grounds 9.1. The AO has erred

M/S. Citrix R & D India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 2(1)(1), Bangalore

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

Bench: Shri Chandra Poojari & Shri George George K.

comparables. 6. The Learned AO/ TPO while passing the final AO order/ Order giving effect to DRP directions erroneously computed incorrect margin for various comparable companies in SWD and ITeS segments. Following are the comparables for exclusion/inclusion in the SWD segment: 7. The Learned AO in pursuance of the directions ... enhancement held that no adjustment should be made to the profit margins on account of working capital differences between the tested party and the comparable companies for the following reasons: (i) The daily working capital levels of the tested party and the comparables was the only reliable basis of determining

Ametek Instruments India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-1(1)(1), Bengaluru

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

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.432/Bang/2021 : Asst.Year 2016-2017 M/S. Ametek Instruments India The Assistant Commissioner Private Limited Of Income-Tax, Circle 1(1)(1) V. Benguluru. Plot No.1, Epip Industrial Area, Divyashree Nr Enclave, 4Th Floor Block A, Whitefield Bengaluru – 560 066. Pan : Aahca2869B. (Appellant) (Respondent)

assessee filed objections before the Dispute Resolution Panel (DRP). The DRP did not grant any relief with regard to the exclusion / inclusion of comparable companies. The DRP directed the TPO to recompute the margin of four comparable companies, namely, KALS Information Systems Private Limited, C G Vak Software & Exports Limited ... learned Departmental Representative supported the orders of the Income Tax Authorities. It was submitted by the learned DR that if the turnover of a comparable company is less or more than 10 times the turnover of the assessee, then it cannot be considered as a comparable company. 6.3 We have

Enstage Software Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Bangalore

The appeal of the assessee is partly allowed

Bench: Smt. Beena Pillai & Ms. Padmavathy Sit(Tp)A No.260/Bang/2021 Assessment Year : 2016-17 M/S. Enstage Software Private Limited, Dcit (Exemptions), Vs. 16/1, Wings, 2Nd Floor, Circle – 2(1)(1), Cambridge Road, Halsuru, Bengaluru. Bengaluru – 560 008. Pan : Aaace 9963 B Appellant Respondent

turnover/service revenue while selecting the companies comparable to the assessee and that application of turnover filter is a relevant criteria in choosing comparable companies. The ld AR also It is submitted that the difference in the scale of operations have a direct impact on the profitability and an increase ... more than Rs.200 Crores and the Assessee’s turnover is only Rs.20,18,51,846/-. The TPO excluded from the list of comparable companies chosen by the Assessee in its TP study companies whose turnover was less than Rs.1 Crore. The Assessee raised objections before the DRP that while

M/S Lenovo (India) Private Limited, Bangalore vs. Income Tax Officer Ward-4(1)(1), Bangalore

Bench: Shri. George George K & Ms. Padmavathy S

assessee raised objections before the DRP. The DRP gave partial relief to the extent of revision in the PLI’s of comparable companies considered for TP adjustment. The revised average of OP/OC of comparables came to 3.51% and hence the AO in the final order revised the TP adjustment towards

M/S. Johnson & Johnson Surgical Vision India Private Limited ( Earlier Known As Abbott Medical Optics Private Limited), Gurgaon vs. Income Tax Officer, Ward- 11(1), Bangalore

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

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 84/Bang/2020 Assessment Year : 2009-10 M/. Johnson & Johnson Surgical Vision India Pvt. Ltd. (Earlier Known As Abbott Medical Optics Pvt. Ltd.), The Income-Tax The Masterpiece, Officer, Level 5, Golf Course Road, Ward – 11(1), Sector – 54, Bangalore. Vs. Gurgaon – 122 002. Haryana. Pan: Aaeca8659C Appellant Respondent Assessee By : Shri Ajit Tolani, Ca Revenue By : Shri Pradeep Kumar, Cit Dr Date Of Hearing : 18-04-2022 Date Of Pronouncement : 10-06-2022 Order Per Beena Pillaipresent Appeal Arises Out Of Order Dated 05.11.2011 Passed By Ld.Cit(A)-4, Bangalore For A.Y. 2009-10 On Following Grounds Of Appeal: “The Grounds Mentioned Herein By The Appellant Are Without Prejudice To One Another. 1. That The Order Of The Learned Commissioner Of Income- Tax (Appeals)-4, Bangalore [‘Ld. Cit(A)'] & The Learned Income-Tax Officer, Ward 11(1), Bangalore (`Ld. Ao') To The Extent Prejudicial To The Appellant, Are Bad In Law, Contrary To Facts & Circumstances Of The Case & Liable To Be Quashed.

Resale Price Method as the most appropriate method. 4.8. Upholding the Ld. TPO's approach of not applying multiple year/ prior year data for comparable companies while determining arm's length price. 4.9. Upholding the Ld. TPO's approach of using data at the time of assessment proceedings, instead ... that available Page 4 of 10 IT(TP)A No. 84/Bang/2020 as on the date of preparing the Transfer Pricing documentation for comparable companies while determining the arm's length price, ignoring the fact that the data was not available to the Appellant at the time of complying with

M/S Applied Materials India Private Limited, Bangalore vs. Income Tax Officer Ward-1(1)(1), Bangalore

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

Bench: Shri George George K. & Ms. Padmavathy S

reasonably accurate adjustment to the Assessee’s NCP margin so as to eliminate the material effects of the differences between the Assessee and the comparable companies in this regard. IT(TP)A No.3403/Bang/2018 Page 9 of 44 18. The ld. AR submitted that the determination of net cost margin excluding ... AO/Ld. TPO erred in considering Provision for Doubtful Debts as non-operating while computing the margins of the comparable companies. The Ld. Panel erred in upholding the actions of the Ld. TPO. 5.13 The Ld. AO/Ld. TPO erred in considering data obtained u/s 133(6). The Ld. Panel erred

Hewlett-Packard Globalsoft Private Limtied, Bangalore vs. DCIT, Bangalore

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes and the appeal of the revenue stands dismissed

more cost and thereby results in lower profit margins. iv) Whether the Hon'ble DRP was right in seeking exact comparability while searching for comparable companies of the assessee under TNMM method whereas requirement of law and international jurisprudence require seeking similar comparable companies. v) Whether

DCIT, Bangalore vs. M/S Hewlett Packard Globalsoft Pvt. Ltd., Bangalore

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes and the appeal of the revenue stands dismissed

more cost and thereby results in lower profit margins. iv) Whether the Hon'ble DRP was right in seeking exact comparability while searching for comparable companies of the assessee under TNMM method whereas requirement of law and international jurisprudence require seeking similar comparable companies. v) Whether

Corp Attire, Bengaluru vs. The Income Tax Officer, Ward-5(3)(1), Bangalore

In the result, appeal of the assessee is partly allowed

Bench: Shri N. V. Vasudevan & Ms. Padmavathy Sit(Tp)A No.202/Bang/2021 Assessment Year :2015-16 M/S. Nike India Pvt.Ltd., Vs. Dcit, Ground & First Floor, Circle – 3(1)(1), Olympia Building, No.66/1, Bagmane Tech Bengaluru. Park, C. V. Raman Nagar, Bengaluru – 560 093. Pan : Aabcn 9612 K Appellant Respondent Assessee By : Shri. K. R. Vasudevan, Advocate Revenue By : Smt. Susan Dolores George, Cit(Osd)(Itat), Bengaluru. Date Of Hearing : 21.07.2022 Date Of Pronouncement : 26.07.2022 O R D E R Per N. V. Vasudevan:

associated enterprise, i.e., SMC. Moreover as MSIL was concerned, its operating profit margin was 11.19 per cent. which was higher than that of the comparable companies whose profit margin was 4.04 per cent. Therefore, applying the transactional net margin method it must be stated that there was no question ... commission paid by the assessee was 7% of the value of products sourced. The assessee benchmarked the same under CUP method by selecting certain comparable companies, which had paid sourcing commission in the range of 5% to 12%. Accordingly, the assessee claimed the payment to be at arms length

Essilor India Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Bangalore

In the result, the appeal filed by the assessee stands allowed

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 219/Bang/2021 Assessment Year : 2016-17 M/S. Essilor India Pvt. Ltd., 10Th Floor, Prestige Trade The Deputy Tower, Commissioner Of 46, Palace Road, High Income Tax, Grounds Sampangi Rama Circle-2 (1)(1), Nagar, Vs. Bangalore. Bangalore – 560 001. Pan: Aaace4623J Appellant Respondent Assessee By : Shri Chavali Narayan, Ca : Dr. Manjunath Karkihalli, Revenue By Cit Dr Date Of Hearing : 30-03-2022 Date Of Pronouncement : 31-05-2022 Order Per Beena Pillaipresent Appeal Is Filed By The Assessee Against The Final Assessment Order Dated 30.03.2021 For Assessment Year 2016-17 Passed By The Ld.Acit, National E-Assessment Centre, Delhi On Following Grounds Of Appeal: “Based On The Facts & Circumstances Of The Case & In Law, Essilor India Private Limited (Hereinafter Referred To As "Eipl" Or The "Company" Or The "Appellant"), Respectfully Craves Leave To Prefer An Appeal Against The Order Passed By The Additional / Joint / Deputy / Assistant Commissioner Of Income Tax / Income Tax Officer

Appellant at 5.86% on operating revenue computed by the TPO based on TNMM is higher than the weighted average operating margin earned by comparable companies at 0.98% and thereby indicating that the Appellant has already been adequately remunerated/ compensated for AMP as well. 11. Without prejudice to the above grounds ... appreciating that TNMM has been considered as the MAM and the operating margin of the Appellant is higher that the operating margins of the comparable companies, thus no separate adjustment for AMP expenditure is required. 12. The learned AO/ TPO/ DRP has erred, in law and in fact, by making

M/S. L G Soft India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 4(1)(1), Bengaluru

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

Bench: Shri Chandra Poojari & Smt. Beena Pillai

learned AO/ learned TPO/ Hon'ble DRP erred in not considering the financial data of the preceding two years in case of the comparable companies wherein the data for the current year is unavailable, while determining the ALP. 5. The learned AO/ learned TPO/ Hon'ble DRP erred in applying ... different financial year ending filter while selecting the comparable companies. The learned AO/learned TPO/Hon'ble DRP erred in 6. applying the service income filter of 75% to sales, leading to a narrower comparable set. 7. The learned AO/learned TPO/Hon'ble DRP erred in applying export earning filter

M/S. Te Connectivity Services India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

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

Bench: Shri Chandra Poojari & Smt. Beena Pillaiit(Tp)A No.300/Bang/2021 Assessment Year : 2016-17

Tribunal, TS-370-ITAT-2021 ST-Ericsson India Pvt Ltd Tribunal, Delhi ITA No.609 & 168/Del/2015 Imsofer Manufacturing India Pvt Ltd, ITA No.5158/Del/2015 & ITA No.1049/Del/2016 Comparable companies do not have Goodwill or Amortisation thereof 10. The ld. AR further submitted that the final set of comparable companies considered for the purpose ... transaction of provision of ITES by the Appellant would be at arm's length, without any further adjustments in relation to the inclusion/exclusion of comparable companies and grant of working capital adjustment. 20. The ld. DR submitted that amortization of goodwill is an operative expenditure and it could

Galax E Solutions India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

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

Bench: Shri N.V. Vasudevan & Ms. S. Padmavathyit(Tp)A No.389/Bang/2021 Assessment Year : 2016-17 Galax E Solutions India Pvt.Ltd. Vs. The Deputy Commissioner Of Income Tax, Unit No.4, 8Th Floor, Innovator Block, Itpl, Circle -3(1)(1), Bangalore, Whitefield Road, Bangalore 560 066. Pan : Aabcg 9007 F Appellant Respondent Appellant By : Shri. C. J. Brito, Ca Respondent By : Shri. Sumeer Singh Meena, Cit, Dr. Date Of Hearing : 23.05.2022 Date Of Pronouncement : 25.05.2022 O R D E R Per N. V. Vasudevan: This Appeal By The Assessee Is Directed Against The Order Dated 26.5.2021 Of The Deputy Commissioner Of Income Tax, Circle 3(1)(1), Bangalore, (Hereinafter Referred To As The Assessing Officer, “Ao” In Short) Passed U/S.143(3) Read With Section 144C(13) Of The Income Tax Act, 1961 (Act) In Relation To Ay 2016-2017. 2. The First Issue To Be Decided In This Appeal Is With Regard To The Correctness Of Determination Of Arm’S Length Price In Respect Of An International Transaction U/S.92 Of The Act. The Assessee In Engaged In The Business Of Provision Of Software Development Services (Swd Services), To It’S Wholly Owned Subsidiary Company In Usa. In Terms Of The Provisions

Profit/Operating Cost (OP/OC) as the Profit Level Indicator (PLI) for the purpose of comparison of the Assessee’s profit margin with that of the comparable companies. The Assessee is a captive service provider and does not bear any cost of software development and support services. The entire ... referred to by the AO, accepted TNMM as the MAM and also used the same PLI for comparison i.e., OP/OC. He also selected comparable companies from database. The TPO on his own identified some other companies as comparable with the Assessee company and arrived at a set of 14 comparable

M/S. Emerson Automation Solutions Intelligent Platforms Private Limited (Formerly M/S Ge Intelligent Platforms Private Limited), Bangalore vs. The Assistant Commissioner of Income Tax Circle-3(1)(2), Bangalore

In the result, grounds 10 and 11 are allowed for statistical purposes

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm It(Tp)A No.356/Bang/2018 : Asst.Year 2013-2014 M/S.Emerson Automation The Assistant Commissioner Solutions Intelligent Platforms Of Income-Tax, Circle 3(1)(2) V. Bangalore. Private Limited (Formerly Known As M/S.Ge Intelligent Platforms Private Limited) Velankani Tech Park, Building 9 First Floor, 43 Hosur Road Bangalore 560 100 Pan : Aaacg7573K (Appellant) (Respondent) Appellant By : S/Sri.Sachit Jolly & Aayush Nagpal, Advocates Respondent By : Sri.Sumer Singh Meena, Cit-Dr Date Of Pronouncement : 24.05.2022 Date Of Hearing : 17.05.2022 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 30.10.2017 Passed U/S 143(3) R.W.S. 144C Of The I.T.Act. The Relevant Assessment Year Is 2013-2014. 2. The Brief Facts Of The Case Are As Follows: The Assessee Is A Company Engaged In The Business Of Process Industrial Automation That Includes Manufacture & Trading Of Automation Products, Solutions & Services For The Process Controlled Application. For The Relevant Assessment Year The Return Of Income Was Filed By The Assessee On 29.11.2013 Declaring Total Loss Of Rs.1,06,46,560. The 2 It(Tp)A No.356/Bang/2018 M/S.Emerson Automation Solutions Intelligent Platforms Pvt.Ltd Assessment Was Selected For Scrutiny By Issuance Of Notice U/S 143(2) Of The I.T.Act. During The Course Of Assessment Proceedings, The Matter Was Referred To The Transfer Pricing Officer (Tpo) To Determine The Arm’S Length Price (Alp) Of The International Transactions Undertaken By The Assessee With Its Associated Enterprises (Aes). The Tpo Vide Order Dated 31.10.2016 Passed U/S 92Ca Of The I.T.Act Proposed The Following Adjustments:- Segment Value Of Adjustment (Rs.) Manufacturing Segment 4,43,23,760 Hq Charges 86,39,654 Total 5,37,40,836

assessee, 5 IT(TP)A No.356/Bang/2018 M/s.Emerson Automation Solutions Intelligent Platforms Pvt.Ltd the same needs to be reduced from the operating income of the comparable companies. The learned AR has produced detailed computation of net operating margin of comparable companies after exclusion of revenue from sale of services and other ... total operating income of the manufacturing segment of the assessee, the same also needs to be reduced from the operating income of the comparable companies. The learned AR has produced computation of revised margin of comparable companies after exclusion of service income and other income in the case of comparable

M/S. Ge Be Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 3(1)(2), Bangalore

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

Bench: Shri Chandra Poojari & Shri George K. George

above, we remit the issue to file of AO/TPO for fresh consideration. 6.2. With regard to Nihilent Technologies Limited it is submitted that this comparable company is not comparable to the assessee’s case since it is functionally dissimilar as it is engaged in rendering high end services ... same assessment year in paras 24 & 26 as under “ (7) Infosys BPO Ltd. 24. This company is listed at Sl.13 in the list of comparable companies chosen by the TPO. As far as this company is concerned, it is the submission of the ld. counsel for the assessee that this

Deputy Commissioner of Income Tax, Circle- 6(1)(2), Bengaluru vs. M/S. Symbol Technologies India Private Limited, Bengaluru

In the result, appeal by the assessee and that by the Revenue are treated as partly allowed

Bench: Shri N. V. Vasudevan & Shri Laxmi Prasad Sahu

approach of not providing appropriate working capital adjustment towards difference in level of working capital of the Appellant vis-a-vis the comparable companies; 9. On the facts and circumstances of the case, the learned CIT(A) erred in upholding the actions of the learned TPO in treating interest ... referred to by the AO, accepted TNMM as the MAM and also used the same PLI for comparison i.e., OP/TC. He also selected comparable companies from database. The TPO accepted 2 companies chosen by the assessee as comparable companies. The TPO on his own identified 11 other companies as comparable

M/S. Symbol Technologies India Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 6(1)(2), Bengaluru

In the result, appeal by the assessee and that by the Revenue are treated as partly allowed

Bench: Shri N. V. Vasudevan & Shri Laxmi Prasad Sahu

approach of not providing appropriate working capital adjustment towards difference in level of working capital of the Appellant vis-a-vis the comparable companies; 9. On the facts and circumstances of the case, the learned CIT(A) erred in upholding the actions of the learned TPO in treating interest ... referred to by the AO, accepted TNMM as the MAM and also used the same PLI for comparison i.e., OP/TC. He also selected comparable companies from database. The TPO accepted 2 companies chosen by the assessee as comparable companies. The TPO on his own identified 11 other companies as comparable