Section 92C : Company Providing Software Support Services not comparable with Software Develpment

Co. providing software support services isn’t comparable with an entity engaged in software development

[2015] 56 taxmann.com 465 (Bangalore - Trib.)

IN THE ITAT BANGALORE BENCH 'B'

Deputy Commissioner of Income-tax, Circle-12 (4), Bangalore

v.

Textron Global Technology Centre (P.) Ltd

Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm's length price (Comparables and adjustments/Comparables - Illustrations/RPT) - Assessment year 2005-06 - Whether exclusion of comparable companies with RPT of less than zero per cent is not valid, and companies with RPT less than 15 per cent alone can be considered as comparable - Held, yes - Whether size, turnover and brand of company are deciding factors for treating a company as a comparable - Held, yes - Whether a company engaged in business of software products and services and training and specialised embedded software services is not comparable to software development service provider - Held, yes - Whether a company engaged in software licence and related services cannot be compared to software development service provider - Held, yes [Paras 13 to 26] [Partly in favour of assessee]