TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 752
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.... The assessee's operating margins to cost was 4.25%. In order to justify its ALP, the assessee had taken 12 comparables, which are referred in para 4.3 of TPO's order. The TPO only accepted two comparables out of 12, selected by assessee and rejected the rest of the ten. He resorted to search suitable comparables and selected ten more comparables and thus determined the PLI at 21.48%. The assessee filed objection before DRP and the DRP excluded 3 comparables after which the AO finally determined the operating profit at 15.23%. Being aggrieved, the assessee is in appeal before us and has, inter alia, taken following grounds of appeal: 1.That the learned AO has agreed on the facts and in law in rejecting the TP Documentation maintained by the appellant and making an addition of Rs. 92,82,443 on account of difference of Arm Length Price as determined by the learned TPO and Transfer Pricing of the appellant. The addition of Rs. 92,82,443 made to the income of the Appellant is illegal, erroneous and controversy to law and fact. 2.The Honorable DRP and the learned AO has erred in facts and in law by considering the appellant's ground level coordination & support services as prima....
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....rious parts of the world including India. The assessee provides ground support travel related services, which include attending to the administration and co-ordination of the tours, arranging hotel accommodation, travel, transport, tour guides and other such travel related services to Intrepid Australia. Intrepid group was started in 1989 in Australia as a tour and travel agency providing specialized tours to various locations in Asia. Intrepid group focuses on travelling in which travelers experience the local public, transport for commuting, small scale locally owned establishments for lodging and eating, travelling in small groups while still maintaining high 'travelling' standards. Thus, partly the services rendered by asessee included the following: - To provide on-ground co-ordination and logistical support to enable the successful operation of the Intrepid Itineraries. This logistical support includes the provision of group leaders and the organization of local suppliers. - To operate the trips in accordance with Intrepid's Safety and Responsible Travel policies; - To operate these trips in accordance with Intrepid Travel's branding guidelines; - To communicate any n....
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....er two decades with a range of unbeatable services. With the twin advantages of strong experience and excellent expertise, we enjoy the strong support of innumerable clients in India." 5.2. He, therefore, submitted that this company also was not functionally comparable with the assessee being performing highly technical nature. 5.3. As regards WAPCOS, ld. counsel submitted that it was engaged in providing sophisticated engineering consultancy services in the field of infrastructure in areas like ports and harbours, environmental impact assessment, water and sanitation, micro canalization, rural electrification both in India as well as outside India. It was providing engineering and technical consultancy services which entail completely different function, asset and risk profile as compared to assessee's routine coordination and support services. 5.4. Ld. counsel submitted that in view of Rule 10B(2)(b), these three comparables have to be excluded. 5.5. Ld. counsel relied on following decisions: (i) DCIT Vs. M/s MCI Com India P. Ltd. & ors. (ITA no. 4187/Del/2010 & ors dated 30-8-2012), wherein, in the TP study, the assessee's description of business and its comparable company....
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....not comparables to administrative support services. (iii) Nortel Networks India P. Ltd. Vs. Addl. CIT (ITA nos. 4765/Del/2011 & 427/Del/2013 dated 25-02-2014) In this decision all the earlier decisions have been considered and in paras 11 and 11.1 of its order the Tribunal has observed as under: "11. We have heard the rival contentions and perused the material available on record. Apropos the issue of comparability and the exclusion of Choksi, Rites and WAPCOS, Delhi Tribunal in the cases of M/s MCI Com India P. Ltd. and M/s Verizon India P. Ltd. has held that companies like EIL, Rites, Wapsos and TCE are engineering companies which provide end to end solutions and therefore they cannot be compared with assessees who provide marketing support services to the parent company. They were held to be functionally not comparable with thee engineering companies. 11.1. Following the orders of coordinate benches of ITAT in the cases of M/s MCI Com India P. Ltd.; M/s Verizon India P. Ltd. (supra); Estel in ITA no.584/Banglore/06and our own decision in case of Actis Advisers Pvt. Ltd. ITA No. 6390/Del/2012, we hold that Choksi, Rites and WAPCOS being functionally different cannot be appl....