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6. Firstly coming to the addition on account of software development and related IT services segment, the assessee has been providing to its AEs the custom development, application management services and installations, performance tuning and training. In their Transfer Pricing Study, the assessee adopted the Transactional Net Margin Method (TNMM) as the most appropriate method with OP/OC as the Profit Level Indicator (PLI) to reach their margin at 16.83%. The assessee selected ten entities as its comparables and the PLI of the comparables was between 4.17 and 8.88%. While rejecting the entities selected by the assessee as ITA TP No. 228/Hyd/2022 comparables, the learned Assessing Officer conducted fresh study and selected twenty one entities as comparables and computed their PLI at 24.58%. On this score, the learned Assessing Officer suggested an upward adjustment of Rs. 5,87,21,257/-. Ld. DRP, after considering the submissions made on behalf of the assessee, retained the entities - Infosys Limited, Larsen & Toubro Infotech Limited, Tata Elxsi Limited (seg), Persistent Systems Limited, Mindtree Ltd, Cybage Software Private Limited, E-Info Chips Pvt. Ltd, Infobeans Technologies Ltd, Nihilent Ltd., Wipro Ltd., Gwynniebee India Pvt. Limited, Exilant Technologies Pvt. Ltd., Aptus Software Labs Pvt. Ltd., Cygnet Infotech Private Limited, Pagetraffic Web-Tech Pvt. Ltd., Gislen Software Pvt. Ltd., and also rejected the entities Evoke Technologies Private Ltd. and Sasken Technologies Limited from the list of comparables. Assessee is challenging the inclusion and exclusion.

14. As far as Persistent Systems Limited is concerned, before the Ld. TPO, assessee raised objections for its inclusion in the list of comparables basing on fails related party transactions filter as applied by the TPO, functionally not comparable, product company and diversified activities, lack of segmental data, significant research and development expenses, presence of intangibles, excluded in assessee's own case itself, non- contemporaneous data and peculiar economic circumstances. Ld. TPO, brushed aside the contentions of assessee and while referring to the annual report of Persistent Systems Limited, observed that the ratio of related party income to operating income in case of Persistent Systems Limited is 24.42% and ratio of related party expense to operating expense is 12.37% and concluded that the said company perfectly qualifies related party filters. Ld. TPO also observed that the annual report mentions products at several places, but at most of the places, it refers to product development services being offered for its clients. It has few products of its own. However, the same are very limited and license revenue ITA TP No. 228/Hyd/2022 contribute less than 0.73% of total revenue. This means that the percentage contribution of product revenue to total revenue is 0.73%, which is insignificant and the entire revenue from operations is derived from software development services. It was also observed by the Ld. TPO that because the company is independent company, any intangibles getting created in the process of business are getting reflected in the financials as against the controlled cost plus which refuses to recognize the intangible in its own hands and rather gives opportunity to its AE to create such intangibles without having contributed to the same and the objection of assessee for peculiar economic circumstances, Ld. TPO observed that as seen from the OP/OC margins of the company for the last three years, margin of the company in FY.2015-16 is 30.35% whereas the profit margin for the FY.2016-17 is only 24.43% and decided that no impact of peculiar circumstances. Finally, taking the CBDT Notification No. 83/2015 (F.No.142/25/2015-TPL) also into consideration, Ld. TPO rejected the assessee's argument on contemporaneous data. Ld. DRP considered the contentions of the assessee and observed that as per the annual report of Persistent Systems Limited and the clarification submitted by the company in its reply to the notice under section 133(6) of the Act, it is very clear that the company is predominantly engaged in software product development services and hence it is functionally comparable and uphold the selection of Persistent Systems Limited as a comparable.

17. Further, there is clear break up of revenue streams from software development services, technologies know-how and products. As stated earlier, E-Infochips Pvt. Ltd., earns 96.14% of revenue from software development services only. Hence, Ld. DRP rejected this plea and decided that E-Infochips Pvt. Ltd., is functionally comparable and uphold the selection of E-Infochips Pvt. Ltd.,as a comparable.

18. Having considered the findings of the Ld. TPO and Ld. DRP, now we look at the findings of the Tribunal in assessee's own case for the assessment years 2014-15, 2015-16 and 2016-17. In the assessment year 2014-15, the Tribunal considered the comparability of Infosys Limited, Larsen & Toubro Infotech Limited, Tata Elxsi Limited (seg), Persistent Systems Limited, Mindtree Ltd and E-Info Chips Pvt. Ltd and found that such entities are not at all good comparables to the assessee and directed the deletion of the same from the final list of comparables. So also in the assessment year 2015-16, Infosys Limited, Larsen & Toubro Infotech Limited, Tata Elxsi Limited (seg), Persistent Systems Limited, Mindtree Ltd and Cybage Software Private Limited were considered and directed to be deleted. In the same way, for the assessment year 2016-17, the ITA TP No. 228/Hyd/2022 comparability of Infosys Limited, Larsen & Toubro Infotech Limited, Tata Elxsi Limited (seg), Persistent Systems Limited and Cybage Software Private Limited has come up for consideration and the Tribunal directed the exclusion of the same on the ground of non-comparability.

21. In ITA No. 198/Hyd/2021 the Co-ordinate Bench of the Tribunal took the view that Infosys Limited, Larsen & Toubro Infotech Limited, Tata Elxsi Limited (seg), Persistent Systems Limited and Cybage Software Private Limited are not at all comparable with the assessee while referring ITA TP No. 228/Hyd/2022 to the orders of the Co-ordinate Bench for the assessment years 2014-15 and 2016-17.

22. A perusal of the orders in Infor (India) Private Limited Vs. DCIT in ITA No. 2307/Hyd/2018 for the AY. 2014-15, Infor (India) Private Limited Vs. ACIT in ITA No. 1689/Hyd/2019 for the AY. 2015-16 and Infor (India) Private Limited Vs. DCIT in ITA No. 198/Hyd/2021 for the AY. 2016-17, therefore, makes it clear that all these seven comparables were found to be not comparable with the assessee consistently for the assessment years 2014- 15, 2015-16 and 2016-17 on the ground of either functional dissimilarity or scales of turnover and profits or non-availablity of segmental information, where it is necessary. All these entities are excluded from the list of comparables from the assessment years 2013-14 to 2016-17 consistently. Learned DR does not plead any change in the factual position for this assessment year from any of the earlier assessment years. Considering the similarly of the facts and circumstances, and respectfully following the consistent view taken by the Co-ordinate Benches in the assessee's own case, we direct the exclusion of Infosys Limited, Larsen & Toubro Infotech Limited, Tata Elxsi Limited (seg), Persistent Systems Limited, Mindtree Ltd, Cybage Software Private Limited and E-Info Chips Pvt. Ltd from the list of final comparables.