INCOME TAX ACT, 1961

Section 92C

Transfer pricing - Selection of comparables - Exclusion of Infosys Ltd. as a comparable -

Assessee-company was engaged in providing software development services and information technology enabled services. It entered into various international transactions with its overseas associates and enterprises. It benchmarked the transactions by following TNMM. However, TPO did not accept benchmarking of the assessee and proceeded to conduct his own analysis. In that process, he included an entity 'Infosys Ltd.' in list of comparables. Accordingly, AO passed an assessment order. CIT(A) held that 'Infosys Ltd.' could not be treated as a comparable, as in assessee's own case for an earlier assessment year, Tribunal excluded 'Infosys Ltd.' from the list of comparables. Being aggrieved, Revenue was in appeal before the Tribunal. Held: Assessee sought exclusion of 'Infosys Ltd.' as a comparable on account of high turnover, having business segments of software development and sale of products, diversified business operations, substantial intangible assets, brand value, etc. In view of decisions of Co-ordinate Benches of Tribunal in assessee's own case for earlier assessment years and further considering the fact that Departmental authorities themselves excluded 'Infosys Ltd.' as a comparable in assessee's own case for subsequent assessment years, CIT(A) was justified in holding that 'Infosys Ltd.' could not be treated as a comparable.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2013-14

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