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3. The TPO observed that the Adobe Systems India Pvt. Ltd. is a software research and development company incorporated in India on 30.07.1997. It functions as a contract services provider and renders service to its group companies. It is primarily engaged in undertaking software development services. Further, the company is engaged in marketing and promoting the products and services of Adobe group. He observed that during the impugned assessment year, the assessee has entered into the following international transactions with its AE M/s Adobe Systems Inc. and Adobe Systems Software Ireland Ltd. :-

14. Referring to the TPO order for assessment year 2009-10, he submitted that the TPO had categorically held that information gathered from independent sources like Website of US Patent Office shows patents have been filed in US with India originating during the year. Referring to page 116 of the Paper Book, he submitted that Adobe Systems Inc. had filed one patent during the year 2007, 4 patents during the year 2008, 5 patents in the year 2009 and 17 patents in the year 2010 with US patents and trademark office. He submitted that these details were not available in earlier years. Further Adobe has no PE in India. It is operating through Adobe India. Therefore, the assessee cannot say that this company is not incurring any expenditure for patent. He submitted that even if the ownership does not lie with the AE, the same cannot be a ground for saying that it is not developed by the AE. Referring to page 22 of the Paper Book, Volume- 1, ld. DR drew the attention of the Bench to Exhibit- 4 which shows the typical software development life scale (SDLC). He submitted that the scale consists of market research, R&D, software requirement analysis, system analysis and design, code generation, testing and maintenance. He submitted that the assessee is doing all 7 activities and not the last three i.e. code generation, testing and maintenance. He submitted that Infosys Technologies Ltd. also is doing similar function. Therefore, it is functionally same. Referring to page 29 of the Paper Book, ld. DR drew the attention of the Bench to the terms and conditions of the provisions of software development services, according to which, Adobe India provides engineering, research and development services to Adobe US. Further, Adobe India also performs design, development, support improvement and enhancement services for Adobe US products. As per the said terms and conditions, Adobe India is reimbursed by Adobe US all direct, indirect and overhead expenses incurred in rendering services along with a mark up on such costs. Referring to page 31, Volume- 1 of the Paper Book, he submitted that Adobe India undertakes the coding and documentation function with respect to the software modules that it develops. Adobe US plans, supervises and manages the coding and documentation function performed by Adobe India. Adobe India is only responsible for the development of modules of the software for a product. He submitted that the assessee has technical man power and is capable of developing new software. It has registered 27 patents with the U.S. Govt. department. Referring to page 32 of the Paper Book, he drew the attention of the Bench to para 4.2.3 which is risk analysis. Referring to page 33 of the Paper Book, he submitted that Adobe India is compensated on the basis of a full cost plus mark-up and is assured of the recovery of costs of any underutilized/unutilized resources. Thus, Adobe India is not exposed to any utilization risk and the capacity utilization risk is borne by Adobe US. He submitted that in any service, there is some calculation on the basis of manpower. The assessee also takes some risk. Therefore, it cannot be said that the assessee is not a risk free entity. Referring to page 621 of Volume-2 of the Paper Book, ld. DR drew the attention of the Bench to the agreement for technology, research and development. Referring to para 2.3 at page 622 of the Paper Book, he drew the attention of the Bench to the ownership of the invention. This shows that ownership has not been designed for any patents developed in India. He submitted that the assessee nowhere in the TP study report has declared the patent as going to the AE abroad without any costs. Therefore, it cannot be said that the assessee has not taken any risk. In view of the above, he submitted that the order of the Tribunal in assessment year 2009-10 should be followed where it has been held that Infosys Technologies Ltd. is a comparable.

6.5.8 When we compare the activity of the instant assessee, we find from the transfer pricing study as under:
"a) Adobe India provide engineering, research and development services to Adobe US . Adobe India also performs design, development, support improvement in enhancement services for Adobe US products (para-4.2.1 on page 22 of the TP study)
b) Adobe India undertakes, the coding and documentation function with respect to the software modules that it develops ( page 24 of the TP study)
c) Adobe India is responsible for day-to-day project management and the end deliverables with respect to the models of the software being developed by it.( Page 24 of the TP study)
d) Adobe India undertakes quality control procedure with respect to the software modules developed by it. ( Page 24 of the TP study)
e) Adobe India also performs unit test for the software modules developed by it.( Page 25 of the TP study).ยด 6.5.9 Though, in the TP study the assessee has furnished that conceptualization and design of the software are being done in the supervision or direction of the 'Adobe US' and the assessee's having limited role in these activities, but, in our opinion, it is evident from the transfer pricing study, as far as development of software modules is concerned, the assessee also plays a dominant role. The learned TPO in the order has brought on record that the assessee has not provided the details of software developed or designed and conceptualizations was done abroad and development work was done in India. He also mentioned that details of software developed completely and description of functions in India and abroad was not provided to him despite numerous opportunities given to the assessee. The assessee has even not brought any such evidences before us.