TaxTMI 
TaxTMI 
2015 (10) TMI 998
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....pute Resolution Panel, Chennai (D.R.P) dated 20.12.2013. 2. The Assessee has raised three grounds in its appeal and they are concised herein below for adjudication:- (i) The Ld. Assessing Officer /TPO have erred in law and on facts in adopting the entity level margin of 23.21% of the assessee instead of A.E segment margin of 45.41% while determining the Arm's Length Price (ALP). (ii) The Ld. Assessing Officer /TPO has erred in law and on facts in disallowing the expenses amounting to US Dollar $30,600 equivalent to Rs. 15,20,849/- by inadvertently considering the same as expenses incurred during the relevant year under consideration viz. Assessment year 2009-10, when the fact was that, this expense was incurred during the earlier a....
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....ansfer price adjustment - upward adjustment of ALP for Rs. 2,32,79,189/-.:- 4.1 The main grievance of the assessee is that the Ld. Assessing Officer/TPO/DRP did not agree to recognize the assessee's segmental profit margin with Associated Enterprises (AE) of 45.41% but had taken into account of the assessee's entity level profit margin of 23.21% as comparable with other comparable companies viz. Genesys International Ltd, KLG Systel Ltd. and Neilsoft Ltd having profit margin of 58.44%, 31.08% and 8.92% respectively. Since the average percentage profit of the comparable companies was 32.81% as against the assessee's entity level profit margin of 23.21%, the TPO had proposed the upward adjustment. The Ld. A.R had submitted before the Reven....
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....parables) with the profitability derived from rendering services to unrelated parties, however proceeded to compare the assessee's entity level profitability with external comparables. The Ld. A.R. further brought to our notice that the TPO had accepted the segmental profitability provided by the assessee for the subsequent assessment year 2010-11 and had not made any adjustment to ALP for international transactions entered between the assessee within AEs. The Ld. A.R. further pointed out that the financial data provided to the TPO for the assessment year 2010-11 was the same as the data provided for the year under appeal viz. assessment year 2009- 10 and the same was accepted by the TPO who had recognized the segmental profitability of the....
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....itability of the assessee's entity level profit. When the Bench queried as to why the matter may not be remitted back to the file of Ld. TPO in order to examine the segmental financial data of the transaction between the assessee company and its AEs because the Ld. A.R had vouched the availability of the same, the Ld. D.R though resisted the proposal could not successfully argue in support of the same. 4.4. We have heard both the parties and carefully perused the materials available on record. The main contention of the Ld. A.R. was that for the purpose of determining the ALP for the transactions related to the assessee company with that of its AEs, internal comparison would be more appropriate than the external comparison, i.e., interna....