supra) this
Tribunal in case of Lucid Software Ltd. observed as under:
Lucid Software Ltd
This comparable was included by Ld.TPO and objected ... between
assessee therein and
Lucid software Ltd.,. As observed therein, this company was
involved in development of software as compared to captive
software service provider
retained as comparable, the
Assessing Officer is accordingly directed to
exclude the above company from comparable.
We further find that the comparability of this
company ... services rendered other than software
development services provided by this
company. Thus the DRP held that software
development segment is comparable to the
assessee
comparable company, it was found that overseas subsidiary companies
have acquired certain IP products and that the comparable is predominantly
engaged in the software development ... comparable. The
assessee objected to the inclusion of this company as a comparable for the
reason that this company being engaged in software product designing
software development activities of the company and
it is observed that the company categorizes its activities as software
services and software products. Nature of software ... Software Services" and "Software
Products" as given in the annual report without explaining as to how
software services constitute software development services
meet the legally acceptable criteria for comparability. The following
comparables therefore ought to have been rejected as comparable:
• Persistent Systems Ltd.;
• Sasken Communication Technologies ... services rendered other than software development
services provided by this company. Thus the DRP held that software development
segment is comparable to the assessee
software development activities of the company and
it is observed that the company categorizes its activities as software
services and software products. Nature of software ... Software Services" and "Software
Products" as given in the annual report without explaining as to how
software services constitute software development services
staff, directors of various projects
(e.g. software development, improvements to existing software,
testing and validation of software, and document writing), and
system engineers providing ... software development services and licensing, royalty
of software products. Thus without having the separate
segmental details and data these diversified activities cannot be
compared with
income from both
the streams of software products and software services, one cannot deduce
the revenue from software services and no one knows the impact ... total revenue, this company was also found
to be functionally not comparable with software development
services segment of the assessee. The DRP has given
M/S Continental Automotive Components ... vs Assistant Commissioner Of Income Tax ... on 24 November, 2021
selected as comparable to the
Appellant'
13.2. Following companies should be selected as comparable to
the Appellant in relation to the software development services ... from
the annual report that the service segment comprises of software
development, software development, software consultancy,
engineering services, web development, web hosting, etc. for
which
