TaxTMI 
TaxTMI 
2014 (2) TMI 1222
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....als) - 15 ['CIT(A)'] has erred in confirming the action of the Additional Director of Income-tax (International Taxation -Range 1 ('AO') and Additional Commissioner of Income-tax (Transfer Pricing) - 1(2) ('TPO') of making an unjustified Transfer Pricing adjustment of Rs. 6,08,81,192. 2. On the facts and in the circumstances of the case and in law the Learned CIT(A) has erred in confirming the action of Learned AO/ TPO retaining Zenith Infotech Limited as a comparable company without considering the functional comparability and other relevant factors. 3. On the facts and in the circumstances of the case and in law the Learned CIT(A) has erred in misinterpreting the Grounds of Appeal filed by the Appellant with regard to loss mak....
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....es of the case and in law the Learned CIT(A) has erred in confirming the action of the AO/TPO in disregarding the application of multiple-year data while computing the margins of alleged comparable companies as such data had an influence in determining the pricing policy of the Appellant. 9. On the facts and in the circumstances of the case and in law the Learned CIT(A) has erred in confirming the action of the AO/TPO in not granting the benefits of proviso to section 92C(2) of the Act to the Appellant." 3. Ground No. 1 is general in nature and needs no separate adjudication. 4. Before us, the Ld. Counsel for the assessee stated that the assessee is not keen in pursuing the grievance raised vide ground No. 3 & ground No. 8. These g....
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....al Tower, Singapore 039190 Data and voice network designing, integration & implementation, Network management 191,299,269 7. Having entered into the aforestated international transaction, the assessee submitted statutory reports as per the provisions of the Act. The assessee adopted Transactional Net Margin Method (TNMM) as the most appropriate method. Taking operating margin as the profit level indicator (PLI), the assessee used five broadly comparable independent companies as stated hereinabove. S. No. Company name 2005-06 OPM% 2006-07 OPM% 2007-08 OPM% Weighted Average 1. Antelec Ltd. 10.88 NA NA 10.88 2. Canvasm Technologies Ltd. NA 34.43 -35.43 -22.76 3. Tat....
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....t earlier which pertains to Zenith Infotech Ltd. The reason given by the assessee is that the said company is not functionally comparable and has high abnormal margin. The assessee also requested for the inclusion of additional comparables namely (i) GTL Ltd., (ii) M/s. ORG Informatics Ltd and (iii) Wireless T.T. Info Services Ltd. This claim of the assessee was not entertained by the TPO who was of the opinion that the assessee itself in its original report has taken M/s. Zenith Infotech Ltd., as functionally comparable. The TPO also rejected the claim of the inclusion of additional comparables stating that the assessee has not given any reasoning or search strategy for including these new comparables nor the assessee has explained why ....
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....etails in respect of M/s. Zenith Infotech was not available though the same was taken as comparable by the assessee. But after perusing the financial report of the said company, it was noticed that the said company is functionally not comparable and therefore the assessee has requested to exclude the said company from the set of comparables. The Ld. Counsel further stated that the lower authorities grossly erred in not allowing the assessee to include additional comparables without properly examining those comparables. 13. Per contra, the Ld. Departmental Representative supported the findings of the Ld. CIT(A). 14. Having heard the rival submissions and perused the orders of the lower authorities and the relevant material evidence bro....