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| The Tax Publishers2020 TaxPub(DT) 4291 (Bang-Trib) INCOME TAX ACT, 1961
Section 92C
Sasken Communication Technologies Ltd. due to extraordinary event of corporate retructuring, significant expenditure on research and development activity and significant intangibles, could not be considered as comparable to assessee engaged in software development services.
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Transfer pricing - Determination of ALP - Selection of comparables - Extraordinary events and significant intangibles
Assessee rendered software development services to its AE abroad. TPO considered Sasken Communication Technologies Ltd. as comparable to assessee. Held: Sasken Communication Technologies Ltd. had acquired Botnia Hightech F and its two subsidiaries and thus, it had under gone significant restructuring. Also, the company had incurred significant expenditure on research and development activity being 6.07% of sales. Further, the company had significant intangible, inasmuch as it developed Susken branded products owned IPRs. Accordingly, this company could not be considered as comparable to assessee's case.
Followed:Schneider Electric IT Business India Pvt. Ltd. v. JCIT (2019) 106 taxmann.com 70 (Bangalore) : 2019 TaxPub(DT) 4682 (Bang-Trib) and VMware Software India (P) Ltd. [IT(TP)A No. 1311 (Bang) 2014, dated 6-1-2017].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
INCOME TAX ACT, 1961
Section 92C
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