2018 (9) TMI 1320

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....60A of the Income Tax Act, 1961 impugns the order dated 12.12.2017 passed by the Income Tax Appellate Tribunal ('ITAT') in the case of M/s Belkin India Private Limited in ITA No.2292/Del/2017. The appeal pertains to the assessment year 2011-2012. 2. The limited issue raised by the Revenue in the present appeal relates to the exclusion of Media Research Users Council ('MRUC') from the list of comparables for making transfer pricing adjustment. 3. The reasoning given by the ITAT to exclude the MRUC from the list of comparables vide impugned order are as under: "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). Function....

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....epresenting four different stakeholders in Media Research covering media sellers and buyers, operative portion thereof is extracted for ready reference as under:- "Membership The Council has from the beginning, been a nonfor- profit organisation representing four different stakeholders in Media Research covering media sellers and buyers. On 31st March 2011, MRUC had members as follows :-     No. Advertisers 58 Publishers 107 Advertising Agencies 51 Broadcast and Other media 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....

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....y of subscription fee for IRS/IOS, meaning thereby MRUC outsourcing expenses comes to 85% of the total expenses. So, in the given circumstances, MRUC cannot be compared with the taxpayer which does not outsource any of its activity. 19. Furthermore MRUC does not qualify turnover filter of Rs. 5 crores applied by the TPO for selecting the comparables as is evident from page 382 of the paper book which is income and expenditure account and total income is shown at Rs. 2,64,37,978/-. By applying the filters of Rs. 5 crores, the TPO has rejected other comparables of the taxpayer viz. "Sporting & Outdoor Ad Agency Ltd." So, the MRUC is liable to be excluded from the final set of comparables on ground of turnover filter of Rs. 5 crores also. ....