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Showing contexts for: Software Source code in Broadcom India Technologies Private ... vs Assessee on 8 May, 2015Matching Fragments
"Software Product Company A company who develops a software product by following all the steps involved in creating software as explained above from Domain Analysis to Testing. In this case, intellectual property belongs to the company. The products are sold generally on license basis wherein the right to use the software is transferred without giving the source code. These types of companies are not similar to the taxpayer, who is a pure service provider.
Pure Software Development Service Provider A pure software development service provider does a portion of the described software development life cycle. It does not generate any intellectual property for its own. The intellectual property generated belongs to the customer and not to the service provider. The taxpayer falls in this category. Thus comparables are also to be chosen from companies whose significant activities (> 75% of the operating revenues) are in the nature of or relate to software development services."
I.T.A. Nos. 1631/Hyd/10 :- 20 -: 1227 & 2098/Hyd/11 Broadcom India Technologies Pvt. Ltd (Formerly known as LVL7 Systems India Pvt. Ltd) As can be seen from the above extracted portion, the TPO has himself mentioned that a pure software development service provider does not generate any intellectual property for its own. He has further stated that, the companies which sell their products generally on license basis wherein the right to use the software is transferred without giving source code cannot be comparable to pure software development service provider like assessee. It is the specific contention of the learned AR that Accel Transmatic Ltd., has sold IP rights for the software developed by it. Further, it is also the contention of the assessee that this company fails the RPT filter of more than 25% applied by the TPO himself. In case of Huawei Technologies India Pvt. Ltd. Vs. ITO (supra), the ITAT Bangalore Bench while examining the issue of comparability of the aforesaid company to a purely software development service provider has held as under: