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Particulars Provisions of Provision of Provision of software ITES MSS development service Average OP/OC(%) 15.62% 14.5% 9.95% Appellant's OP/TC (%) 16% 18% 6.48% 2.5 The transactions pertaining to fixed assets and receipt of management services were aggregated with the transaction pertaining to provision of software development services, provision of ITES and provision of MSS.

D. TCS E-serve Ltd and E. TCS E-serve International Ltd .

8. The Ld. counsel referred to page 105 of the Annual Report of the TCS E-sevce Ltd. and page 31 of the Annual Report of TCS E-serve International Ltd., submitted that both companies, in addition to the ITes services, were engaged in technical services involving software testing, verification and validation of the software, which are in the nature of software development services and in absence of segmental result of ITes, the companies cannot be compared functionally with the ITes segment of the assessee. The Ld. counsel relied on the decisions of the Tribunal in the case of Vertex customer services India Private Limited versus DCIT reported in (2017) 88 taxmann.com 286 (delhi-Trib) and Samsung heavy industries India Private Limited versus DCIT (2017) 84 taxmann.com 154 (Delhi-Trib) submitted that companies have been excluded in absence of segmental result and functional dissimilarity.

8.1 On the other hand, the Ld. DR submitted that both the companies were engaged only in providing ITes services and the services of software testing, verification and validation was in respect of the implementation and data centre management for providing the ITes services and thus companies were not engaged in any kind of software development, and therefore being engaged in only one segment, no segmental result for ITes and software development were required in the year under consideration.

8.2 We have heard the rival submission and perused the relevant material on record. The contention of the Ld. counsel that TCS E-serve International Ltd is functionally dissimilar, is not found to be correct. On page 31 of the Annual Report of the company, background and principal activities have been mentioned under Schedule N of notes to account. The relevant extract is reproduced as under:

8.3 Thus it is evident from the Annual Report of the company for the year under consideration that primarily the company is not engaged in software development and it was engaged in providing IT enabled services (ITes) only. The technical services of software testing, verification and validation the software were carried out at the time of implementation of software only and are in the nature of back-office support.

8.4 On perusal of the Annual Report of M/s TCS E-serve Ltd , we find that it has rendered services identical to the services rendered by TCS e-serve international Ltd. In schedule O to the notes of account of the company, available on page 105 of the Annual Report, the principal activities of the company reported are as under: