Income Tax

Emc Software And Services India Pvt Ltd vs JCIT

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The assessee is engaged in the business of software development and related services to its Associated Enterprises (AEs), SSIPL, wholly subsidiary of EMC Corporation, USA and was registered under SEZ. In TP Study the assessee has selected 7 comparables in respect of Software Development Services segment and 11 comparables in ITES. The TPO has rejected TP Study and called for the documents in respect of comparables selected for determination of arm’s length. The TPO passed an order with adjustment in Software Development Services and ITES segment. The assessee filed objections to the subsequent draft order before the DRP. Pursuant to the directions of DRP, the TPO has passed the assessment order.

The Authorised Representative of the Assessee argued for inclusion of three comparables in ITES segment (which included Jindal Intelcom Ltd and Informed Technologies Limited).The DRP observed that it is engaged in IT and ITES and no segmental reporting is available. The learned AR referred to the case of CGI Information Systems & Management Consultants (P.) Ltd. Vs. ACIT to support the Jindal argument. Following the co-ordinate Bench decision of the Bangalore ITAT, in the case of Ocwen Financial Solutions Pvt. Ltd. Vs. JCIT and the information envisaged by the ld. AR in the Annual Report, the TPO is directed to include both of these comparables for determination of ALP.

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