आयकर अपील(cid:547)य अ(cid:876)धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ DB-A‘ Bench, Hyderabad (cid:302)ी (cid:874)वजय पाल राव, उपाÚय ¢ एवं

(cid:302)ी मधुसूदन साव(cid:875)डया, लेखा सदè य के सम¢ ।

Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No.397/Hyd/2023 (िनधा१रण वष१/Assessment Year: 2016-17)

Dy. CIT Vs. Charter Global Circle 1(1) Technologies Private Hyderabad Ltd, Hyderabad PAN:AAICS8032K (Appellant) (Respondent)

िनधा१ौरती (cid:554)ारा/Assessee by: Shri Mithilesh Sai, CA राज(cid:830) व (cid:554)ारा/Revenue by:: Smt. B. Malathi, Sr. AR सुनवाई की तारीख/Date of hearing: 06/04/2026 घोषणा की तारीख/Pronouncement: 24/04/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.:

This appeal is filed by the Revenue feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals)-10, Hyderabad (“Ld. CIT(A)”) dated 23.05.2023 for the A.Y.2016-17.

2. The Revenue has raised the following grounds of appeal:

“1) Whether on the facts and circumstances of the case, the CIT(A) is justified directing to adopt the turnover filter in the software industry when Department's stand has consistently been that turnover is not a relevant filter in the software industry.

2) Whether on the facts and circumstances of the case, the CIT(A) is justified rejecting the following 8 companies on the ground of functional dissimilarity ignoring the fact that under TNMM method degree of functional comparability required is low as the very TNMM method is tolerant to functional differences, especially view the keeping in Range concept of 35th percentile to 65th percentile while determining the tolerance band of Arm's Length Range.

S.No. Comparable

1 Kals Information Systems Ltd

2 Rheal Software (P) Ltd

3 CG-VAK Software & Exports Ltd

4 Cimiti Technologies Ltd 5 RS Software (India) Ltd

6. Inteq Software Pt Ltd

7. Infobeans Technolosics Ltd

8 Thirdware Solutions Ltd a) Whether on the facts and circumstances of the case, the CIT(A) is correct in rejecting M/s. Kals Information Systems Pvt. Ltd. as comparable for the taxpayer company without considering the fact that the Annual report of the comparable itself mentions that the comparable company is into business of Software services.

b) Whether on the facts and circumstances of the case, the CIT(A) is correct in rejecting M/s. Rheal Software Pvt. Ltd. as comparable for the taxpayer company without considering the fact that the Annual report of the comparable itself mentions that the comparable company is into business of Software Development and Maintenance'.

c) Whether on the facts and circumstances of the case, the CITIA) is correct in rejecting the M/s. Rheal Software Pvt, Ltd. as comparable without considering the fact that fluctuating margins do not affect the comparability analysis.

d) Whether on the facts and circumstances of the Case, the CIT(A) is correct in rejecting M/s. CG VAK- Software & Exports Ltd as comparable for the tax payer company without considering the fact -that the Annual report of the comparable itself mentions that the comparable company is into business of Software Development and maintenance.

e) Whether on the facts and circumstances of the case, the Ld. CIT (A) is correct in rejecting M/s. Ciginiti Technologies Ltd as comparable company for the without comparing the fact that the ‘Software Development Services’as per Rule 10TA includes debugging of systems i.e. testing services.

f) Whether on the facts and circumstances of the Case, the CIT(A) is correct in rejecting M/s RS Software India Ltd as comparable for the taxpayer company without considering the fact that the annual report. Whether on the facts and circumstances of the Case, the CIT(A) is correct, into business of software development services.

g) Whether on the facts and circumstances of the Case, the CIT(A) is correct in rejecting M/s. Inteq Software Pvt. Ltd as Comparable for the taxpayer company without considering the fact that the Annual report of th