Document Fragment View

Matching Fragments

6. The authorities below erred in selecting the following, functionally dissimilar companies as comparables for IT Enabled Services segment under the facts and circumstances of the case:

 Acropetal Technologies Ltd. (Seg.)  Hartron Communications Ltd (Seg)  Capgemini Business Services (India) Pvt. Ltd.  Tech Mahindra Ltd. (Seg)  e4e Healthcare Business Services Pvt. Ltd.
 Infosys BPO Ltd.

7. The authorities below erred in selecting Hartron Communications Ltd. as a comparable for IT Enabled Services segment which earned super normal profits for the year under consideration.

The Ld.TPO proposed the adjustment to ALP being shortfall at Rs. 2,98,47,287/- under SWD segment.
6.1 The final set of comparables selected by the Ld.TPO under ITeS services segment are as under: 
           S.No.     Company Name                      PLI(OP/OC)
                     Acropetal Technologies
             1                                            24.16%
                     Ltd.
                     Microgenetic Systems
             2                                            16.34%
                     Ltd.
             3       Jindal Intellicom Ltd.               -3.00%
             4       Hartron                              44.07%

                                               IT(TP)A No. 2828/Bang/2017

                         Communications Ltd.
                         (seg)
                   5     Microland Ltd.               8.62%
                         Capgemini Business
                   6                                  26.78%
                         Services (India) Pvt. Ltd.
                         Tech Mahindra Ltd.
                   7                                  22.27%
                         (seg)
                         E4E Healthcare
                   8                                  17.26%
                         Business Pvt. Ltd.
                   9     Infosys BPO Ltd.             29.28%
                         Average                      20.64%
Microland Ltd.
Hartron Communications Ltd. (seg) Capgemini Business Services (India) Pvt. Ltd. Tech Mahindra Ltd.
Infosys BPO IT(TP)A No. 2828/Bang/2017 Coordinate bench of this Tribunal in case of ISG Novasoft Technologies Ltd. vs. DCIT in IT(TP)A No. 42/Bang/2018 for A.Y:
2013-14 by order dated 29.04.2019 has considered following comparables as under:
"Hartron Communications Ltd.
Further the learned AR emphasized that this comparable company is also engaged in real estate activity. The learned AR referred to page 1344 and 1350 of the paper book 2 and emphasized the entry into real estate business. The learned AR made submissions on the trading of shares of this company and relied on the observations of the Auditors. We found that the Chennai Bench of Tribunal in the case of M/s.Cameron Manufacturing India Pvt. Ltd. vs. DCIT in ITA No.336/Chny/2018 dated 16/10/2018 has observed at para 7 which read as under:
Capgemini Business Services (India) Pvt Ltd for FY 2012- 
 Particulars                      Amount       Amount
Trade Mark,
Methodology and                                 1,32,27,082
Information Support
Other expenses (Bank
                                                   4,58,647
Guarantee Charges)
Revenues
Capgemini America Inc      1,38,34,00,945
Capgemini Outsourcing
                           1,11,29,20,107
Services SAS
Capgemini UK PLC             56,38,85,986
Capgemini Canada Inc         51,76,50,927
Others                       24,73,18,736 3,82,51,76,701
Expenditure
Network related cost
                              6,44,33,165
(Capgemini Services
SAS, France)
Network  related cost
                              8,35,22,704
(Capgemini Outsourcing
Services SAS)and
Professional
                              1,04,21,158
consultancy (Capgemini
Business Services
(China) Ltd)

                                 IT(TP)A No. 2828/Bang/2017

Professional and
                               73,99,408
consultancy (Capgemini
Singapore
EDP        Pte. Ltd.)
     Expenses
                             6,07,22,526
(Capgemini India Pvt.
Ltd)
Service fees (Capgemini
                            14,87,17,789
Outsourcing Services
SAS)
Service fees (Others)        1,42,30,206
Training charges
                             1,70,02,732
(Capgemini Universite)
Reimbursement of
                               27,17,661
expenditure (Capgemini
Services SAS) of
Reimbursement
                               15,89,465      41,07,56,814
expenditure (Others)
Total RPT                                   4,24,96,19,244
Total revenue from
                                            5,16,22,18,012
operations
RPT %                                               82.32%