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of <h1>Tribunal Excludes Comparable Companies for Transfer Pricing Adjustments, Assessee's Appeal Allowed</h1> <h3>WTW Global Delivery and Solutions India Pvt. Ltd. [formerly known as M/s. Wills Processing Services (India) Pvt. Ltd.] Versus DCIT, Range-2 (3) (1), Mumbai.</h3> WTW Global Delivery and Solutions India Pvt. Ltd. [formerly known as M/s. Wills Processing Services (India) Pvt. Ltd.] Versus DCIT, Range-2 (3) (1), ... Issues involved:Challenging final assessment order under ITAT Mumbai for AY 2007-08, selection of comparable companies for Transfer Pricing adjustments.Detailed Analysis:Challenging Final Assessment Order:The assessee appealed against the final assessment order dated 30-12-2015 for AY 2007-08 under section 143(3) r.w.s. 144C(13) of the Act, issued by the Assessing Officer following directions from the Dispute Resolution Panel (DRP).Selection of Comparable Companies:The assessee, an Export Oriented Unit under the STPI Scheme, engaged in IT Enabled Services to Associated Enterprises, challenged the selection of 25 comparable companies by the TPO and DRP. The list included companies remanded by the High Court, leading to a final set of 25 comparables for transfer pricing analysis.Exclusion of Comparable Companies:The assessee sought the exclusion of 10 specific comparable companies, presenting arguments based on functional differences and past judgments. The Tribunal examined each company individually and directed the exclusion of Accentia Technologies Ltd, Mold-Tek Technologies Ltd, E-clerx Services Ltd, Vishal Information Technologies Ltd, Asit C Mehta Financial Services Ltd, Bodhtree Consulting Ltd, Infosys BPO Ltd, WIPRO Ltd, Maple E-Solutions Ltd, and HCL Comnet Sys & Ser Ltd.Rationale for Exclusion:The Tribunal considered various factors for exclusion, such as functional differences, demerger events, business models, segmental details, revenue recognition methods, goodwill, brand value, R&D activities, fraud charges, profit trends, and accounting year differences. Past judgments and case laws were also cited to support the exclusion of these companies.Outcome:After excluding the 10 companies, the Tribunal directed the AO/TPO to determine the Arm's Length Price (ALP) by considering the remaining 15 comparable companies. The appeal filed by the assessee regarding Transfer Pricing adjustments was allowed, with the order pronounced in open court on 29.08.2022.This detailed analysis covers the issues of challenging the assessment order and the selection/exclusion of comparable companies, providing a comprehensive overview of the judgment delivered by ITAT Mumbai.
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