2017 (12) TMI 800

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....ction 250 / 143 (3) read with section 144C of the Income-tax Act, 1961 (for short 'the Act') qua the assessment year 2011-12 on the grounds inter alia that :- "1 On facts, circumstances of the case and in law, the Learned Commissioner of Income-Tax (Appeals) - 19, New Delhi [herein referred to as "Ld. CIT(A)"] erred in confirming an addition of INR 15,503,946 to the taxable income of the Appellant on account of determination of arm's length price of the international transaction u/ s 92CA(3) of the Income-tax Act, 1961 ("the Act"). 2 On facts and in law, the Ld. CIT(A) erred in confirming the action of the Deputy Commissioner of Income-tax, Transfer Pricing Officer - 1(1)(2) ("Ld. TPO") of disregarding the economic ana....

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....0,640 4 Reimbursement of expenses received 495,209 4. The taxpayer in order to benchmark its international transaction selected 6 comparables having average Net Cost Plus (NCP) at 8.22% as against NCP mark up of taxpayer at 9.99% and found its international transactions at arm's length. 5. However, TPO rejected 6 comparables chosen by the taxpayer and retained 2 and introduced 2 new comparables and calculated NCP mark up of 4 comparables at 26.34% as against NCP mark up of taxpayer at 9.99% and proposed the adjustment on account of arm's length price at Rs. 2,54,52,714/-. 6. The taxpayer has not approached the ld. DRP rather raised objections before the ld. CIT (A) who has ordered to exclude one comparable viz. Info Edge I....

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....which is under challenge before the Tribunal. 11. At the very outset, the ld. AR for the taxpayer contended that the taxpayer only challenges inclusion of one comparables viz. Media Research Users Council (MRUC). Functional profile of the taxpayer is not in question. Method for benchmarking the international transaction has also been accepted by the ld. TPO. Now, we will examine the suitability of Media Research Users Council (MRUC) in the light of the contentions raised by the ld. AR for the taxpayer as well as ld. DR for the Revenue. 12. The ld. AR for the taxpayer challenged the inclusion of MRUC as a comparable for benchmarking the international transaction qua market support service segment on grounds of functional dissimilarity;....

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....a 33   249 15. When we examine the issue of comparability of taxpayer vis-à-vis MRUC in the light of Rule 10B (2) of the Income-tax Rules, 1962 (for short 'the Rules'), we are of the considered view that the taxpayer cannot be compared with MRUC because of functional dissimilarity as no risk is assumed by the MRUC being a not-for-profit organisation and only serves the interest of its members and assets employed are only from the membership fee as well as subscription fee collected from its 249 members. 16. Furthermore, benefits / profits of the MRUC are not divided between the members, it being a not-for-profit organisation. So, the MRUC does not qualify the parameters lay down under Rule 10B (2) of the Rules, ne....