TaxTMI 
TaxTMI 
2017 (12) TMI 345
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....n on account of transfer pricing adjustment amounting to Rs. 4,01,72,876/-. 3. Briefly stated, the facts of the case are that the assessee company was incorporated in India in 2007 and is a wholly owned subsidiary of SHI Korea. It provides engineering, design and related services for the offshore floaters/platform business of SHI Korea. The assessee has a pool of qualified manpower. It employs engineers having a background and experience in lay out design, electrical design, instrumentation design, piping design and mechanical design, etc. The assessee filed return and reported two international transactions in Form No.3CEB. The dispute in the present appeal is on the first international transaction of 'Provision of engineering, design and....
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....ul before the Dispute Resolution Panel (DRP). That is how, the Assessing Officer made an addition of Rs. 4.01 crore in his final order on account of transfer pricing adjustment in the international transaction of 'Provision of engineering, design and related services.' The assessee is aggrieved against the addition made by the Assessing Officer. 6. We have heard the rival submissions and perused the relevant material on record. The ld. AR submitted that the short controversy in the instant appeal is against the inclusion of four companies in the list of comparables. Thus, it is apparent that there is no quarrel on any aspect including the application of TNMM as the most appropriate method with the PLI of OP/OC. 7. Before proceeding to disc....
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....vices' as well. It was submitted that Tata Elxsi Ltd., a company included by the TPO in the final set of comparables, was not rendering IT enabled services. The ld. DR vehemently argued that the selection of comparable companies should be based by considering the assesee's functional profile as that of engineering services also. 9. We are disinclined to accept this contention advanced by the ld. DR for the obvious reason that the TPO himself declined to accept this contention and classified the assessee's services as IT enabled services. Once the TPO has treated the nature of services rendered by the assessee as 'I.T. enabled' and the assessee has not objected to the same in the appeal before the Tribunal, the ld. DR cannot be allowed to s....
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....omparability or otherwise of this company on page 21 onwards of its order. After relying on certain decisions, the Tribunal directed to exclude it from the list of comparables on account of functional dissimilarity and outsourcing of substantial amount of work. We have gone through a copy of the Annual report of this company for the year under consideration, whose copy has been placed on pages 500 onwards of the paper book. The Profit & Loss Account of this company is available at page 542 from which it can be seen that there is income from 'Sales and services' to the tune of Rs. 108.31 crore. Schedule 8 gives a brief description of such 'Income' as including 'Medical transcription, Billing and collections, Income from coding, Interest on F....
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....se services has been clubbed. Such services include Trade processing support, Reference data maintenance, Contract risk review, Reconciliation and controls, Margin and exposure management, Metrics and reporting, Expenses management, Accounting and finance, Consulting services, Online operations & Web analytics, CRM & business intelligence, Data management & Reporting, Competitor benchmarking & Pricing, Quality & compliance and Business process consulting. This company has a single primary segment i.e., 'Data analytics and process outsourcing services.' A plain reading of the nature of services carried on by this company abundantly shows that there is a vast difference with the activity carried on by the assessee. Relying on the view taken b....
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....nt year. Since the Tribunal, for the immediately preceding year, has held this company to be functionally different from that of the assessee, respectfully following the precedent, we direct the exclusion of this company on account of functional dissimilarity as the nature of activity carried on by the assessee during the year also remains similar to that done for the preceding year. (iv) TCS E-serve International Ltd. 17. The TPO included this company in the final roll of comparables. Similar view was taken by him for the immediately preceding assessment year. The Tribunal, in an appeal by the assessee, has directed to exclude this company in its order for the immediately preceding year. The principal activities of this company have bee....