In IT(TP)A No.182/Bang/2022 -ITAT - ITAT (Bangalore) excludes Larsen & Toubro Infotech, Mindtree, Persistent Systems, and Infosys from final list of comparables in Applied Material India's appeal
Members Chandra Poojari (Accountant) & George George K (Judicial) [08-06-2023]

Read Order: M/s. Applied Material India Private Limited v. The Assistant Commissioner of Income Tax

Chahat Varma

New Delhi, June 9, 2023: The Bangalore bench of the Income Tax Appellate Tribunal, taking into account the orders in M/s. Applied Material India Private Limited’s (assessee) own case from earlier years and the order of the Tribunal in the case of M/s. Yahoo Software Development India Pvt v. The Joint Commissioner of Income Tax [LQ/ITAT/2022/3163], has directed the exclusion of Larsen and Toubro Infotech Ltd., Mindtree Limited, Persistent Systems Ltd., and Infosys Limited from the final list of comparables.

Factual matrix of the case was that the assessee was a private limited company engaged in the business of providing software development and support services to its holding company. The case involved a reference to the Transfer Pricing Officer (TPO) to determine the Arm's Length Price (ALP) of an international transaction conducted by the assessee with its Associated Enterprises (AEs) during the assessment proceedings. The assessee sought for exclusion of companies from the comparable list.

The Tribunal proceeded to consider the exclusion of Larsen and Toubro Infotech Ltd., Mindtree Limited, Persistent Systems Ltd., and Infosys Limited as comparables. The Tribunal noted that common contentions were raised for the exclusion of these four companies.

“In the present case, the functional profile, assets, risks and activities of the assessee company are admittedly similar to the previous assessment years. Following the earlier years orders in the assessee’s own case and the order of the Tribunal in the case of Yahoo Software development India P. Ltd. (supra), we direct exclusion of the above four companies from the final list of comparables,” held the Tribunal.