IMPORTANT POINT
The court is the final fact-finding authority in transfer pricing matters, and the statutory authority must examine the merits of exclusion of comparables to determine if the transaction is at arm's length.

JUDGMENT

Rajiv Shakdher, J. (Oral)

CM No.39008/2019 [Application filed on behalf of the appellant seeking condonation of delay of 258 days in re-filing the appeal]

1. This is an application moved on behalf of the appellant/revenue seeking condonation of delay in re-filing the appeal.

1.1. According to the appellant/revenue, there is a delay of 258 days.

2. Mr Himanshu S. Sinha, who appears on behalf of the respondent/assessee, says that he does not oppose the prayer made in the application.

3. Accordingly, the delay is condoned.

4. The application is disposed of, in the aforesaid terms.

ITA 787/2019

5. This appeal concerns Assessment Year (AY) 2008-09.

6. Via this appeal, the appellant/revenue seeks to challenge the order dated 23.05.2018, passed by the Income Tax Appellate Tribunal [in short, "Tribunal"].

7. We may note that the Tribunal via the impugned order has, in fact, dealt with cross-appeals filed before it by the appellant/revenue as well as the respondent/assessee.

7.1. The appellant/revenue's appeal was numbered as ITA No.1204/Del/2014, which was filed concerning AY 2009-10.

7.2. Likewise, the respondent/assessee had filed two appeals, numbered ITA No.410/Del/2013 and ITA No.1484/Del/2014, concerning AY 2008-09 and 2009-10 respectively.

8. However, as noted right at the beginning, the appellant/revenue has come up in appeal vis-a-vis AY 2008-09 whereby, the respondent/assessee's appeal, i.e., ITA No.410/Del/2013 was partly allowed.

9. In the appeal preferred by the respondent/assessee before the Tribunal, it had asked for exclusion of the following nine (9) comparables:

(i) Infosys Ltd. [in short, "Infosys"]

(ii) KALS Information Systems Ltd. [in short, "KALS"]

(iii) Bodhtree Consulting Ltd. [in short, "Bodhtree"]

(iv) Tata Elexi Ltd. [in short, "Tata Elexi"]

(v) Avani Cincom Technologies Ltd. [in short, "Avani"]

(vi) Wipro Ltd. [in short, "Wipro"]

(vii) E-Zest Solutions Ltd. [in short, "E-Zest"]

(viii) Persistent Systems Ltd. [in short, "Persistent"]

(ix) Softsol India Ltd. [in short, "Softsol"]

10. It is not in dispute that out of the aforementioned nine ((9) comparables, the Tribunal has via the impugned order directed the exclusion of eight (8) comparables, barring Softsol.

10.1. We are told by Mr Himanshu S. Sinha, who appears on behalf of the respondent/assessee, that the respondent/assessee has not preferred an appeal on that score.

11. Insofar as the appellant/revenue is concerned, Mr Ruchir Bhatia, learned senior standing counsel, who appears on behalf of the appellant/revenue, submits that this appeal is confined to the direction issued by the Tribunal to exclude the following four comparables:

(i) Avani

(ii) Wipro

(iii) E-Zest

(iv) Persistent

12. Mr Bhatia says that the approach adopted by the Tribunal was unsustainable and, therefore, interference is called for by this court.

13. On the other hand, Mr Sinha relies upon the impugned order in support of his submission that the Tribunal has returned findings of fact and, therefore, no interference is called for by the court.

14. Having examined the record and heard learned counsel for the parties, we find that the following emerges:

15. Insofar as the respondent/assessee is concerned, it is in the business of software development services.

16. Therefore, while examining the approach adopted by the Tribunal, one would have to see whether the exclusion of the four comparables ordered by the Tribunal was in accordance with the well-accepted norms laid down by this court.

17. On examining the impugned order, we find that insofar as Avani, Wipro, and Persistent are concerned, the Tribunal has returned a finding of fact that no segmental data is available. These three comparables are in the business of software products and services and no segmental data is available.

18. The finding of fact recorded by the Tribunal vis-`a-vis Avani is that it deals in software products and services, there is a categoric finding that no segmental data is available and, therefore, it is not a good comparable.

18.1. Lik