Assessee company was engaged in business of providing software development services, company, engaged in both development of software products as well as services whose segmental data was also not available, could not be accepted as valid comparable. Company whose RPT was 56.49 per cent of operating revenue could not be accepted as valid comparable. Company, engaged in providing multiple services like custom software development in addition to cloud computing, application services and mobile technology, enterprise application services, QA and testing, BPO and strategic sourcing could not be accepted as valid comparable. Comparable company engaged in providing software development and IT enabled services like hardware designing, complete product lifecycle development, application development, enterprise IT consulting could not be accepted as valid comparable. A comparable company was having employee cost percentage of 11.51 per cent whereas filter applied by TPO in case of assessee was 25 per cent of employee cost, said company could not be accepted as valid comparable. company engaged in providing software services and which also earned huge revenue from engineering design charges could not be accepted as valid comparable. Company engaged in providing broadband services and wireless internet-based communication services as well as enterprise computing could not be accepted as valid comparable. Company engaged in providing cloud consulting, cloud regulations and cloud application development could not be accepted as valid comparable. Company having positive net worth and it was not a loss making enterprise and had reported profits in earlier assessment years, same was to be accepted as valid comparable. Comparable company, engaged in software development and testing services was to be accepted as valid comparable. Company, engaged in software service primarily delivering software validation and verification services to banking and financial services industry worldwide could not be accepted as valid comparable. (AY. 2011-12)
Atlas Healthcare Software India (P.) Ltd. v. Dy. CIT (2020) 185 ITD 372 (Kol.)(Trib.)
S. 92C : Transfer pricing-Arm’s length price-Software development service-Comparable-Functionally different-Company, engaged in both development of software products as well as services whose segmental data was also not available could not be accepted as valid comparable-Filter-Related party-Providing multiple services like custom software development in addition to cloud computing, application services and mobile technology-providing software development and IT enabled services like hardware designing-Employee cost-Huge revenue from engineering design charges-broadband services and wireless internet-based communication services-Providing cloud consulting, cloud regulations and cloud application development-Software validation and verification services to banking and financial services industry worldwide-Held to be not comparable-Positive net worth-software development and testing services-Valid comparable.