Income Tax Appellate Tribunal Kolkata Dcit, Cir2(2), Kolkata, Kolkata vs M/S Nomura Research Institute & ... on 26 October, 2018 IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH : KOLKATA [Before Hon'ble Shri A.T.Varkey, JM & Hon'ble Shri M.Balaganesh, AM ] I.T.A No. 284/Kol/2016 Assessment Year : 201112 Nomura Research Institute Financial Tech.(I) Pvt. Ltd. vs DCIT, Circle2(2), Kolkata (formerly Anshin Software Pvt. Ltd.) [PAN: AADCA 8967 A] (Appellant) (Respondent) I.T.A No. 485/Kol/2016 Assessment Year : 201112 DCIT, Circle2(2), Kolkata vs Nomura Research Institute Financial Tech.(I) Pvt. Ltd. (formerly Anshin Software Pvt. Ltd.) [PAN: AADCA 8967 A] (Appellant) (Respondent) For the Appellant : Shri J.P. Khaitan, Senior Advocate For the Revenue : Shri G. Mallikarjuna, CIT DR Date of Hearing : 01.08.2018 Date of Pronouncement : 26.10.2018 ORDER Per M.Balaganesh, AM 1. These cross appeals of the assessee as well as the revenue arise out of the final order passed by the Learned Deputy Commissioner of Income Tax , Circle 2(2), Kolkata [ in short the ld AO] under section [ in short u/s] 144C read with section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') dated 29.11.2015 pursuant to the Directions of the Learned Dispute Resolution Panel [in 2 ITA Nos.284&485/Kol/2016 M/s Nomura Research Institute Financial Tech. (I) Pvt. Ltd. (formerly Anshin Software Pvt. Ltd. A.Yr.201112 short the ld DRP] u/s 144C(5) of the Act dated 21.10.2015 for the Assessment Year 201112. Both the appeals are taken up together and disposed off by this common order for the sake of convenience. 2. The Ground Nos. 1 & 2 raised by the assessee are with regard to non consideration of revised return of income filed by the assessee. The brief facts of this issue are that the assessee filed its original return of income for the Asst Year 201112 on 17.11.2011 declaring total income of Rs 54,56,160/. The revised return of income was filed on 29.11.2012 declaring total income of Rs 53,14,323/. Admittedly this revised return was filed within the time limit prescribed u/s 139(5) of the Act. The ld AO while completing the assessment ought to have taken note of the same and computed the total income of the assessee. Hence we direct the ld AO accordingly. The Ground Nos. 1 & 2 raised by the assessee are allowed. 3. The Grounds 3 to 5 raised by the assessee are general in nature and does not require any specific adjudication . DETERMINATION OF ARM'S LENGTH PRICE 4. The only issue to be decided in these cross appeals is with regard to inclusion and exclusion of certain comparables for the purpose of determining the Arm's Length Price (ALP) of international transactions entered into by the assessee with its Associated Enterprise (AE). 5. The brief facts of this issue are that the assessee is engaged in the business of rendering software development services. The assessee renders services to Anshin Software Corporation , USA incorporated as a company under the laws of California, USA. Infact the assessee is a captive service provider for Anshin Software Corporation, USA. It is not in dispute that the assessee and Anshin Software Corporation , USA are Associated Enterprises (AEs) because of common 2 3 ITA Nos.284&485/Kol/2016 M/s Nomura Research Institute Financial Tech. (I) Pvt. Ltd. (formerly Anshin Software Pvt. Ltd. A.Yr.201112 shareholding in both the companies by Shri Arnab Debnath and Miss Mausumi Debnath. During the year under consideration, the total turnover of the assessee company was Rs 16,62,87,634/ and out of which Rs 15,88,37,635/ constitutes export turnover. The assessee received a sum of Rs 15,88,37,635/ for rendering software development services from its AE. Thus the entire export turnover constitutes sale to AE in USA. Under the provisions of Section 92 of the Act, any income arising out of an international trans