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Characterisation The functional analysis serves as a foundation to characterise entities for the purposes of inter-company transfer pricing. Based on facts presented in the above FAR analysis, the assessee can be characterised as a captive service provider that assumes lower than the normal risks associated with the business of providing software development. Based on the above we undertake the exclusion/inclusion of the comparables alleged by assessee as under.

17. Persistant Systems Ltd.

The Ld.AR submitted that this company is functionally not similar to assessee as it is engaged in software products, services and technology innovation. The company focuses on next generation technology centered on four main themes- Cloud computing, Analytics, Social enterprise and Enterprise Mobility. Persistent also focuses on establishing a strong IP portfolio and IT(TP)A No.2870/Bang/2017 the IP led business of the company saw a significant boost during the year under consideration due to two product acquisitions by its subsidiaries. Further, during the year under consideration, Persistent also concluded a contract to take over IBM's TNPM product road map, which would help the company strengthen its position in relation to the IP led business.