The Tax Publishers2020 TaxPub(DT) 3927 (Del-Trib)

Income Tax Act, 1961

Section 92C

In case of Persistent Systems Ltd. revenue was only derived from sale of software services and there was no sale of any product in the concerned year hence, there was no requirement of any segmental information and Persistent Systems was rightly taken as comparable in case of software development service provider like assessee.

Transfer pricing - Determination of ALP - Selection of comparables - No segmental information required

Assessee rendered software development services to AE abroad. TPO considered Persistent Systems Ltd. as comparable to assessee's case.Assessee challenged this on the ground that Persistent Systems Ltd. was engaged in sale of software products also and TPO used consolidated financial statement of Persistent for comparable analysis. Held: TPO used Persistent Systems Ltd. on standalone basis as comparable. In fact revenue was only derived from sale of software services and there was no sale of any product in the concerned year. As there was no product sale but only services there was only one segment hence, there was no requirement of any segmental information. Accordingly, Persistent Systems Ltd. was rightly taken as comparable.

REFERRED :

FAVOUR :

A.Y. : 2014-15

INCOME TAX ACT, 1961

Section 92C

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