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2. Whether the Tribunal was correct in excluding Accel Transmatics Ltd., Kals Information systems Ltd., Lucid Software Ltd., Tata Elxsi Ltd., from the list of comparables, holding that they are functionally different without appreciating that the comparables satisfy all the qualitative and quantitative filters applied by the TPO and that selection of comparables in a case depends on assessee specific FAR analysis ?

3. Whether the Tribunal was correct in considering the comparables as engaged in software products business, merely because it has developed software products by following software development process, without having legal ownership on such software products ?

11. Improper selection of comparables: It was submitted by the learned counsel for the Assesse that the following 2 companies are not functionally comparable with that of the Assessee.

          a)          KALS        Information             Systems
    Limited
          b)          Accel Transmission Limited

In this regard our attention was drawn to the decision of the Hon'ble ITAT Bangalore Bench in the case of Triology E-Business Software India Pvt. Ltd. (supra) wherein these companies were held to be not functionally comparable with that of a pure software developer like the Assessee.

Date of Judgment 18-07-2018, ITA No.454/2015 The Commissioner of Income-tax & another Vs. M/s. Analog Devices India Pvt. Ltd.,

(e) Accel Transmatic Ltd.

xxxxx

50. We have considered the submissions and are of the view that the plea of the assessee that the aforesaid company should not be treated as comparables was considered by the Tribunal in Capgemini India Ltd. (supra) where the assessee was software developer. The Tribunal, in the said decision referred to by the ld. counsel for the assessee, has accepted that this company was not comparable in the case of the assessee engaged in software development services business. Accepting the argument of the ld. counsel for the assessee we hold that the aforesaid company should be excluded as comparables.

(d) Lucid Software Limited xxxxx

15. The facts and circumstances under which the aforesaid companies were considered as comparable is identical in the case of the Assessee as well as in the case of Date of Judgment 18-07-2018, ITA No.454/2015 The Commissioner of Income-tax & another Vs. M/s. Analog Devices India Pvt. Ltd., Logica Private Ltd. (supra). Respectfully following the decision of the Tribunal referred to above in the case of Logica Pvt. Ltd. (supra), we direct that the company viz., Lucid Software be excluded from the list of 20 comparable arrived at by the TPO."