The assessee consisting of two merged companies AITPL and ADIPL involved in service related to software determined the arm’s length pricing method by adopting the transactional net margin method. The Transfer Pricing Officer determined the arm’s length price on the basis of certain comparable entities and made upward adjustments in his order. The assessee challenged the order by the Assessing officer which were confirmed by the Dispute Resolution Panel and the tribunal by raising three questions whether the tribunal has misdirected itself in : (i) not excluding comparables Avani Cincom Technologies Limited (Avani) and Ishir Infotech Ltd (Ishir) (ii) not including comparable Akshay Software Technologies Ltd. and (iii) failing to adjudicate the contentions of the assessee with regards to the inclusion of comparables Tata Elxsi Limited (Tata) and Sasken Communication Technologies(Sasken). As regards to the first question, the court held that the tribunal while rejecting the assessee’s claim as to Avani, had disregarded the information available on the website which stated that they were involved in sale of other products which was not confirmed. As regards to Ishir, the court held that the order of tribunal was erroneous in rejecting assesses’ challenge to inclusion of Ishir as it followed a different business model. The tribunals decision to exclude Akshay as a comparable was held to be unsustainable and was remanded back as it was the assesses contention that Akshay did comply with the revenue filter as well as export filter. Further on the third question, the tribunal had not considered assessees’ objection to the inclusion of Tata and Sasken and the matter was remanded back.(AY. 2007-08)