Mphasis Ltd. v. Asstt. CIT - Taxpublishers.in

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The Tax Publishers2017 TaxPub(DT) 2099 (Bang-Trib) Mphasis Ltd. v. Asstt. CIT INCOME TAX ACT, 1961 --Transfer pricing--Determination of ALPSelection of comparables--Brand value--Both Infosys BPO Ltd. and Wipro Ltd. having huge brand value could not be considered as comparable to a smaller company as assessee in the instant case.--Assessee rendered software developments services to AE abroad. TPO considered Infosys BPO Ltd. and Wipro Ltd. as comparables to assessee's case. Assessee challenged this.Held: Both Infosys BPO Ltd. and Wipro Ltd. having huge brand value could not be considered as comparable to a smaller company as assessee in the instant case. Income Tax Act, 1961 Section 92C *Relied:*Capital IQ Information Systems (India) (P) Ltd. v. Dy. CIT (2013) 25 ITR (T) 185 (Hyd-Trib), CIT v. Agnity India Technologies (P) Ltd. (29013) 219 Taxman 26 (Del) *REFERRED :* FAVOUR : In assessee's favour. A.Y. : 2007-08 INCOME TAX ACT, 1961 --Transfer pricing--Determination of ALPSelection of comparables--Functional dissimilarity--Even though both the KPO and BPO services are IT based services, however, the skill and expertise and even the tools required are different which may result in different economic results of both the segments. In such circumstances, they cannot be compared with each other.--Assessee rendered software developments services to its AE abroad. TPO considered certain entities providing high-end KPO services as comparables to assessee's case. Assessee contended that services rendered by it were classifiable as low-end BPO services. TPO rejected this on the ground that both KPO and BPO services are information technology based services.Held: KPO services include all kinds of research and information gathering and thus required advanced analytical and technical skills as well as a high degree of specialist's expertise . Accordingly, it can be inferred that even though both the KPO and BPO services are IT based services, however, the skill and expertise and even the tools required are different which may result in different, economic results of both the segments. In such circumstances, they cannot be compared with each other. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2017 TaxPub(DT) 2099 (Bang-Trib)

Mphasis Ltd. v. Asstt. CIT

INCOME TAX ACT, 1961

--Transfer pricing--Determination of ALPSelection of comparables--Brand value--Both Infosys BPO Ltd. and Wipro Ltd. having huge brand value could not be considered as comparable to a smaller company as assessee in the instant case.--Assessee rendered software developments services to AE abroad. TPO considered Infosys BPO Ltd. and Wipro Ltd. as comparables to assessee's case. Assessee challenged this.Held: Both Infosys BPO Ltd. and Wipro Ltd. having huge brand value could not be considered as comparable to a smaller company as assessee in the instant case.

Income Tax Act, 1961 Section 92C

Relied:Capital IQ Information Systems (India) (P) Ltd. v. Dy. CIT (2013) 25 ITR (T) 185 (Hyd-Trib), CIT v. Agnity India Technologies (P) Ltd. (29013) 219 Taxman 26 (Del)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08

INCOME TAX ACT, 1961

--Transfer pricing--Determination of ALPSelection of comparables--Functional dissimilarity--Even though both the KPO and BPO services are IT based services, however, the skill and expertise and even the tools required are different which may result in different economic results of both the segments. In such circumstances, they cannot be compared with each other.--Assessee rendered software developments services to its AE abroad. TPO considered certain entities providing high-end KPO services as comparables to assessee's case. Assessee contended that services rendered by it were classifiable as low-end BPO services. TPO rejected this on the ground that both KPO and BPO services are information technology based services.Held: KPO services include all kinds of research and information gathering and thus required advanced analytical and technical skills as well as a high degree of specialist's expertise . Accordingly, it can be inferred that even though both the KPO and BPO services are IT based services, however, the skill and expertise and even the tools required are different which may result in different, economic results of both the segments. In such circumstances, they cannot be compared with each other.