Technologies India Pvt. Ltd., Ward 12(1), KH No.37/11/37/28, Bangalore. Village Kapashera, CNG Station, New Delhi 110 037. PAN: AAECM 0999F APPELLANT RESPONDENT Appellant by : Shri K.R. Vasudevan, Advocate Respondent by : Shri Priyadarshi Mishra, Addl. CIT(DR)(ITAT), Bengaluru. Date of hearing : 14.09.2021 Date of Pronouncement : 06.10.2021 ORDER Per Chandra Poojari, Accountant Member These appeals by the assessee are directed against the separate orders of the CIT(Appeals)4, Bangalore passed u/s. 143(3) r.w.s. 144C/92CA of the Incometax Act, 1961 [the Act] dated 30.11.2016 and 21.01.2017 for the assessment years 201011 & 20 1112 respectively. ITA No.450/B/2017 (AY 201011) 2. The Assessee Company is stated to be engaged in the development and export of computer software to its holding company. IT(TP)A Nos. 450 & 1214/Bang/2017 Page 2 of 40 The international transactions undertaken by the Appellant are as under: Amount Received Software services Rs. 23,61,49,062/ Market support services Rs. 1,95,82,511/ 3. The assessee has raised the following grounds of appeal : "Common Grounds 1. The learned Assessing Officer ("learned AO"), learned Transfer Pricing Officer ("learned TPO") and the Honourable Commissioner of Income Tax (Appeals) [Hon'ble CIT (A)] grossly erred in adjusting the transfer price of the Appellant's international transactions with its Associated Enterprises ("AEs") u/s 92CA of the Incometax Act, 1961 ("the Act"). 2. The learned AO/learned TPO/Hon'ble CIT(A) erred in rejecting the TP documentation maintained by the Appellant by invoking provisions of subsection (3) of 92C of the Act. 3. The learned AO/learned TPO/Hon'ble CIT(A) erred in rejecting comparability analysis carried in the TP documentation and in conducting a fresh comparability analysis by introducing various filters in determining the ALP. 4. The learned AO/learned TPO/Hon'ble CIT(A) erred in not complying with the guidelines specified under Rule 10B (2) and Rule 10B(3) of the Incometax Rules, 1962 while selecting comparables, thereby violating the basic tenet of the Indian Transfer Pricing regulations. 5. The learned AO/learned TPO/Hon'ble CIT(A) erred in using data as at the time of assessment proceedings, instead of that available as on the date of preparing the TP documentation for comparable companies while determining arm's length price. IT(TP)A Nos. 450 & 1214/Bang/2017 Page 3 of 40 6. The learned AO/learned TPO/Hon'ble CIT(A) erred in not allowing appropriate adjustment towards to the risk differential between the Appellant visàvis independent comparable companies." 4. At the time of hearing, the above grounds (1) to (6) were not pressed and accordingly dismissed as not pressed. Software Services 5. The Assessee was in receipt of Rs. 23,61,49,062 on account of providing software development services to its AE. The TPO recomputed the arithmetic mean of the profit level indicators of the final comparables, arriving at a shortfall of Rs. 2,13,05,013 which was treated as Transferpricing adjustment, in respect of the software development segment. The TPO while accepting TNMM methodology, however, resorted to a fresh search and revised analysis on basis of fresh comparables. 6. The TPO after considering the assessee's TP study and applying certain filters, arrived at a final list of 11 comparables and determined the arm's length price (ALP) as follows: Arm's Length Mean 22.71% Margin on cost Operating Cost