Income Tax Appellate Tribunal Kolkata Nomura Research Institute Financial ... vs Dcit, Cir2(1), Kolkata, Kolkata on 4 October, 2017 IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH : KOLKATA [Before Hon'ble Sri N.V.Vasudevan, JM & Shri M.Balaganesh, AM] I.T.A No. 587/Kol/2015 Assessment Year : 201011 D.C.I.T., Circle2(2) vs. M/s.Nomura Research Institute & Kolkata Financial Technologies Pvt.Ltd.Kolkata [PAN : AADCA 8967 A] (Appellant) (Respondent) I.T.A No. 590/Kol/2015 Assessment Year : 201011 M/s. Nomura Research Institute & vs D.C.I.T., Circle2(2), Financial Technologies Pvt.Ltd. Kolkata Kolkata [PAN : AADCA 8967 A] (Appellant) (Respondent) For the Department : Shri G.Mallikarjuna, CIT(DR) For the Assessee : Shri J.P.Khaitan, AR Date of Hearing : 19.09.2017. Date of Pronouncement : 04.10.2017. ORDER Per N.V.Vasudevan, JM I.T.A.No.590/Kol/2015 is an appeal by the Assessee while ITA No.587/Kol2015 is an appeal by the revenue. Both these appeals are directed against the order passed by D.C.I.T., Central2 (1), Kolkata dated 18.02.2015 u/s 143(3) r.w.s. 144C of the Income Tax Act, 1961 (Act.) 2. The assessee in its appeal has filed revised grounds of appeal. Grounds No.1 to 16 of the revised grounds of appeal filed by the assessee read as follows : 2 ITA Nos.587&590/Kol/2015 M/s. Nomura Research Institute & Financial Technologies Pvt. Ltd. A.Yr.201011 "Technical Issues 1. For that the Assessing Officer erred in not giving full effect to the directions of the Hon'ble Dispute Resolution Panel RP under section 144C(5) of the Act thereby violating section 144C(13) the Act by: a. not including Akshay Software Technologies Ltd. in the final set of comparables b. not excluding interest income in the cases Kuliza Technologies Pvt. Ltd. and Inteq Software Ltd. 2. For that the Assessing Officer erred in assessing the total income of the Appellant at Rs. 1,91,03,939/ as against the total income of Rs. 40,62,622 computed by the Appellant under the normal provisions of the Act. 3. For that the Authorities below erred in rejecting the transfer pricing documentation maintained by the Appellant in accordance with the provisions of the Act read with the Income Tax Rules, 1962 ('Rules') and in making an adjustment of Rs. 14,741,337/ to the international transactions with Associated Enterprise. 4. For that the Transfer Pricing Officer erred in not providing the detailed search process for selecting his own set of companies which he considered as comparables during the transfer pricing proceedings and also erred in conducting fresh search and economic analysis. 5. For that the Authorities below erred in rejecting the use of multiple year data despite the Appellant demonstrating the circumstances warranting use thereof. Rejection and inclusion of comparable companies 6. For that the Authorities below erred in including EInfochips Bangalore Limited and lnteq Software Limited in the [mal set of comparables although they are secret comparables for which no data was otherwise available, they are not functionally comparable and also have supernormal operating margin. 7. For that the Authorities below erred in including Infinite Data Systems Pvt. Ltd. (Merged) in the final set of comparable although it is not functionally comparable and has a supernormal operating margin. 2 3 ITA Nos.587&590/Kol/2015 M/s. Nomura Research Institute & Financial Technologies Pvt. Ltd. A.Yr.201011 8. For that the Authorities below erred in including (a) Thirdware Solutions Limited and (b) CompULearn Tech India Ltd in the final set of comparables although they are not functionally comparable. 9. For that the Authorities below erred in selecting Kuliza Technologies Private Ltd in the final set of comparables, a secret comparable for which no data is otherwise available and in any event in c