TaxTMI 
TaxTMI 
2017 (7) TMI 907
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....pedient' to refer the matter to the Additional Director of Income Tax, Transfer Pricing Officer-II(1), New Delhi ('Ld TPO') for computation of the Arm's Length Price ('ALP'), as is required under section 92CA(1) of the Income Tax Act, 1961 ('the Act'). 3. That on the facts and in circumstances of the case and in law, the Ld. AO erred in assessing the returned income of the appellant of Rs. 1,14,47,127 at Rs. 1,28,46,321 on the directions of Learned Dispute Resolution Panel ("Ld. DRP") under section 144Cof the Act. 4. That on the facts and in the circumstances of the case and in law, the Ld. DRP erred in directing the Ld. AO to determine the arm's length mark up for the Market Support Service segment after including certain comparables ( IDC India Limited and Empire Industries Limited) which were not contemplated/ proposed by the Ld. TPO/ Ld. AO in the draft order passed by the Ld. AO under section 144C(1) of the Act. It is therefore prayed that the directions issued by the Ld. DRP under section 144C of the Act regarding inclusion of such comparables which were not proposed in the draft assessment order should be treated as inval....
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....data for comparable companies should be used despite the fact that the same was not necessarily available to the appellant at the time of preparing its TP documentation That the above grounds of appeal are independent and without prejudice to each other. That the appellant reserves its right to add, alter, amend or withdraw any ground of appeal either before oral the time of hearing of this appeal." 3. The facts of the case in brief are that the assessee filed the return of income on 29.10.2007. Subsequently, the revised return was filed on 04.03.2009 declaring total income at Rs. 1,14,47,127/-. In the revised return the assessee offered prior period income and also claimed expenses on account of trade claim and prior period expense. The case was selected for scrutiny. The assessee is a branch office of the Philip Morris Services India S.A. incorporated in Switzerland and was engaged in import and distribution of Marlbore Brand of cigarette in India. It also provided marketing support services to its various group companies. Besides this, it was also involved in the export of tobacco leaves to its group companies. During the course of assessment proceedings, th....
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....ants International Ltd. is included and another two companies i.e. M/s IDC India Ltd. and M/s Empire Industries Ltd. are excluded the average margin of the comparables will be within +/-5% range and no adjustment is required to be made on account of arm's length price. 6. In his rival submissions the ld. DR although supported the order of the DRP/AO but could not controvert the aforesaid contention of the ld. Counsel for the assessee. 7. We have considered the submissions of both the parties and carefully gone through the material available on the record. It is noticed that similar issue was involved in the earlier year in ITA No. 5380/Del/2010 preferred by the assessee before this Bench of the ITAT which is evident from the findings given in para 2.5 at page no. 6 of the order dated 26.08.2016 which read as under: "2.5 The issue before us is regarding inappropriate rejection/inclusion of certain companies in the final list of comparables which are as under: i) The assessee has disputed rejection of following companies: a) Capital Trust Ltd. b) Agrima Consultants International Ltd. The assessee has also disputed inclusion of follow....
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....ein the Hon'ble Court has held that where the tested party is not a KPO service provider, an entity rendering KPO services cannot be considered as a comparable for the purpose of TP analysis. He also placed reliance upon the decision of this Tribunal in the case of Microsoft Corporation India Pvt. Ltd. VS DCIT in I.T.A. No. 5766/Del/2011 wherein this company has been characterized as an information technology, research and advisory firm. Further, it has been held that his company earns its income in the form of research and survey. 5.1 We have perused the above details placed in the Paper Book and the judgements relied upon by the Ld. A.R. It is also observed from the functional profile that this company is in the knowledge process outsourcing unit and cannot be compared with the back office support services carried by the assessee. Respectfully following the ratio laid down by Hon'ble Delhi High Court in the case of Rampgreen Solutions Pvt. Ltd. Vs CIT (supra), we accordingly reject this company from the list of comparables. 6. Empire Industries Ltd: This company has been included by the TPO which has been objected by the assessee for the reason that it i....