2014 (12) TMI 1212

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.... mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-border-insideh:.5pt solid windowtext; mso-border-insidev:.5pt solid windowtext; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-fareast-language:EN-US;} SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER For the Appellant: Shri Ajit Kumar jain For the Respondent: Shri K.C.P. Patnayak  O R D E R PER N.K. BILLAIYA, AM: This appeal by the assessee is preferred against the assessment order dt. 31.10.2012 made u/s. 143(3) of the Act r.w. Section 144C(3) of the Act. 2. The assessee was incorporated as a 100 percent Shell owned Company in 1996 to render support in the development of business in petroleum, natural gas, petrochemicals and renewable energy of the Shell group of India. During the year under consideration, the assessee was engaged in provision of advisory and support services to its Associated Enterprises(AEs). Return of income was electron....

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....its economic analysis. The final comparables selected by the TPO for the purpose of determining the arm's length price are as under: S. No. Name Selected by OP/TC(%) 1. Artefact Projects Ltd. Appellant 32.34 2. Educational Consultants India ltd. Appellant 1.87 3. ICRA Management Consulting Services ltd Appellant 4.18 4. NTPC Electric Supply Ltd Appellant 39.21 5. IDC (India) Ltd TPO 15.48 6. Indus Technical & Financial Consultants Ltd. TPO 14.56 7. Rites Ltd. (Seg) TPO 25.77 8. Technicom-Chemie (India)Ltd TPO 7.33 9. Water & Power Consultancy Services (India) Ltd. (Seg) TPO 40.37   Average   20.12  3. Aggrieved by the inclusion of company's mentioned at S. No. 1, 4, 7 & 9 hereinabove, the assessee raised objection before the DRP. It was contended before the DRP that the 10% mark-up earned by the assessee is appropriate. It was claimed that the TPO erred in rejecting the TP analysis made by the assessee. Objections were also raised in respect of the selection of the Comparables made by the TPO. The objections were duly considered and n....

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....nd is involved in enhancing and bringing sectoral reforms process and has been participating in various projects of distribution, infrastructural development programmes under consultancy assignments. Further, this company is also engaged in rural electrification on turn-key basis and also engaged in post award project monitoring and supervision of quality work for the project under execution. Considering all these facts, this company is not functionally comparable. It is therefore directed to exclude this company from the final list of comparables. 8. It would be pertinent here to mention that the above mentioned two companies were considered as comparables by the assessee itself which was subsequently claimed to be excluded from the final list of comparables qua additional ground of appeal. 9. In our considered view, the assessee is not barred for raising a claim of rejection of comparables before us even though the comparables were chosen by the assessee itself in its TP study. We draw support from the decision of the Tribunal in the case of Stream International Services Ltd. in ITA No. 8997/M/2010 wherein it was held as follows: "Having heard the rival submissions and p....

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....mpany had diverse activity. The TPO chose to use the consultancy segment only as a comparable. The assessee objected for this also claiming that this company is providing high end services. This claim of the assessee did not find any favour and the company was considered as a comparable. A cursory look at the business performance of the company shows that this company has been awarded prestigious assignments of advisory consultancy services for Taj Expressway from Greater Noida to Agra, General consultancy for Bangalore Metro, detailed engineering of MUTP phase-II work for MRVC, PMC for upgradation of Railway infrastructure in Rourkela steel plant, Rehabilitation of 290 BOXN wagons of East Coast Railway and training of 360 supervisors of Indian Railways. In the consultancy services segment also, this company is engaged in providing high end/engineering/consultancy services, mainly in the infrastructure sector which is Railways, highways, airports, ports, ropeways, urban transport, power and building construction etc. In its segment reporting, this company has identified three business segments as primary segment namely consultancy services, export of rolling stock equipment and sph....