TaxTMI 
TaxTMI 
TaxTMI 
2015 (6) TMI 899
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....r pricing adjustment in Information Technology enabled services (ITES) segment. 3. Briefly stated, the facts of the case are that the assessee is a subsidiary of Xchanging Resourcing Services Ltd., UK. It is engaged in rendering contracted software development services and also InformationTechnology-enabled services to Xchanging Group Companies. One of the international transactions reported by the assessee was the `Provision of ITES' with transacted value of Rs. 43,64,55,419/-. The assessee applied the Transactional Net Margin Method (TNMM) as the most appropriate method to demonstrate that the international transaction of providing ITES was at ALP. The Profit Level Indicator (PLI) of Operating Profit to Total Cost (OP/TC) was used. In th....
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.... ITES'. Even the PLI of OP/TC has not been disputed. The assessee is aggrieved against the inclusion of Cosmic Global Ltd. and Accentia Technologies Ltd. Apart from that, the assessee seeks the inclusion of Microland Ltd. 6. Before considering the above three companies from the angle of their comparability, it is essential to note the nature of activity carried out by the assessee under this segment. It can be seen from the TPO's order as well as the Transfer pricing study that the assessee provided the following services to its different associated enterprises as under:- "a) Xchanging Procurement Services (XPS): The end client under this contract is a London-based retail chain. The services provided under the project involved back office....
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....y for the year in question, which is available in the paper book. It can be noticed that its revenue from operations stands at Rs. 7,37,02,584/-, which consists of three amounts, namely, Medical transcription and consultancy service charges amounting to Rs. 9,90,737/-; Translation charges amounting to Rs. 6,99,35,756/-; and Accounts BPO charges amounting to Rs. 27,76,090/-. This company outsourced the activity of Translation. 57.31% of total operating expenses incurred by this company are outsourcing charges. Admittedly, outsourcing is confined to Translation, for which it paid charges at Rs. 3.00 crore. In our considered opinion, this company cannot be considered as comparable with the assessee company for the reason of its major activity,....
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....placed in the paper book. It can be noticed from page 31 of the Annual report that during the year under consideration this company completed the acquisition of 96% of M/s Oak Technologies Inc., a healthcare back-office processing company engaged in medical billing, coding and transcription activities and having substantial global work force. The Mumbai Bench of the Tribunal in Petro Araldite (P) Ltd. Vs. DCIT (2013) 154 TTJ (Mum) 176, has held that a company cannot be considered as comparable because of exceptional financial results due to mergers/demergers. Similar view has been taken by the Delhi Bench of the Tribunal in several cases including Ciena India Pvt. Ltd. Vs. DCIT (ITA No.3324/Del/2013) vide its order dated 23.4.2015. In view ....