ORDER

PER BEENA PILLAI, JUDICIAL MEMBER

Present cross appeals has been filed by revenue as well as assessee against final assessment order under section 143(3) read with section 144C(13) of the Act, dated 18/01/2016 passed by Ld.DCIT Circle 1(1)(2) on following grounds of appeal:

ITA No. 482/B/2016 (revenue appeal)

1. The order of the Dispute Resolution panel is opposed to law and the facts and circumstances of the case.

Software development services segment

2. The DRP erred in directing the AO/TPO to exclude M/s. Acropetal Technologies Ltd. and M/s. Larsen & Toubro InfoTech Ltd. from the list of comparables, holding them to be functionally dissimilar as they are having significant onsite revenues, thereby seeking exact comparability while searching for comparable companies of the assessee under TNMM method, whereas requirement of law and international jurisprudence require seeking similar comparable companies. Also, the nature of activity, i.e. software development remains the same, irrespective of the company engaged in providing onsite offshore services.

3. The DRP erred in directing the AO to exclude M/s. Larsen & Toubro infoTech Ltd.. and MIs. Acropetal Technologies Ltd,. on the ground that they have significant onsite revenue, without appreciating the fact that onsite developments of software entails more cost and thereby results in power profit margins.

4. The DRP erred in directing the AO to exclude M/s. Acropetal Technologies Ltd., from the list of final comparable also for the reason that clear segmental information of the employee cost was not available. Without appreciating that proper segmental information was available on prowess database as well audited finials.

5. The DRP erred in directing to exclude E-infochips Ltd, from the list of comparables holding these no segmental information is available and that it fails 75% services revenue filter by not acknowledging the fact that entire revenue of the company comes provision of services, and services income being 100% of its sales, the company qualifies the filter.

6. The I)RP erred in directing exclusion of M/s. ICRA Techno Analytics Ltd., from the list of comparables on the ground that it is into diversified activity and no segmental data is available, without appreciating that the basic faction of the company is developing software talons in those and other verticals. The company's business of analysis of statistical data of its clients before providing software solutions does no render the services to be functionally incomparable.

7. The DRP erred directing to exclude MIs. E-Zest Solutions Ltd. from the list of comparables holding it to be functionally uncomparable, thereby by seeking exact comparability by imposing condition beyond law whereas requirement of law is to acknowledge only those differences that are likely to materially affect the margin, the DRP thought to have appreciated that the comparable affect the qualified all the qualitative and quantitative filters applied by the TPO and in a computer software services, if considered as a sector of business, the 15 different lines prevailing in the business can not be considered functionally different from each other.

8. The DRP erred in directing exclusion of M/s. Infosys Technologies Ltd., from the list of companies holding it to be functional incomparable, without appreciating that the primary source of income of the comparable is from provision of software development services. Also the DRP erred in imposing a condition beyond law in seeking exact comparability that are likely to materially affect the margin,

9. The DRP erred in directing the position of law that there could be differences between the enterprises compared under TNMM method that are not likely to materially affect the price or cost charged or the profits accruing to such enterprises.

10. The DRP erred in directing the AO to exclude M/s. Tata Elxsi Ltd. from the list of comparables, holding it to be functionally uncomparable, without appreciating th