TaxTMI 
TaxTMI 
2018 (11) TMI 435
X X X X Extracts X X X X
X X X X Extracts X X X X
....e not comparable to the Appellant in terms of functions performed, assets employed and risks assumed; 2.9 excluding certain companies on arbitrary/ frivolous grounds even though they are comparable to the Appellant in terms of functions performed, assets employed and risks assumed; 3. The Ld. AO, while following the directions of the Hon'ble DRP of treating gain/ loss on account of foreign exchange fluctuation as non-operating in nature, erred in not disclosing the computation of the revised adjustment in this regard to the Appellant." 3. The representatives of both the sides were heard at length. The case records carefully perused and with the assistance of the ld. Counsel, we have considered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules. Judicial decisions relied upon were carefully perused. 4. Briefly stated, the facts of the case are that the appellant company is engaged in the business of I.T. Enables Services [ITES]. The scope of services are as under: "SCOPE OF SERVICES 1. Civil and Structural Detailing Carry out following services in accordance with requirements o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion ii. Conversion iii. Porting c. Process Consulting 4. FINANCE & ACCOUNTING 1. Invoice processing 2. Asset Entry processing 5. MEP Services L Quantity Surveying/ Take-off Services * This includes quantification for all trades like Electrical, HVAC, CHW, HWS, CWS Piping, Plumbing, Sanitary, Rain Water etc., Material take-offs, Bill preparation, Procurement Packaging, Bill checking during construction and Trouble shooting. 2. 2D/3D/4D Modeling. Detailing & Drafting This includes 2D Detailing & Drafting, 3D Modeling, 3D Fabrication Drawings and As fitted/ As-built drawings 3. Schematic Designing and Design Detailing Services * Mechanical Designing of Heating, Ventilation & Air Conditioning (HVAC) Systems, Plumbing, Sanitary & Rain Water Services, Fire Fighting, Water Services and Effluent Treatment etc. Plants including designing & selection of equipment, layouts, Plant room detailing & Sections etc. Carrying out Design Calculations for Selection of Major Mechanical Equipment. Electrical Designing of Main Power Distribution System, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....,472,065 2,479,010,978 3,529,044 2,475,481,934 131,915,677 7.15 ........ .......... AVERAGE 31.98% 7. After making adjustment on working capital, the TP adjustment was computed as under: Operating cost of the assessee A 312,376,712 ALP at a margin of 30.10% B = 130.10* A 406,402,102 Price received from AE(operating income) C 346,741,455 Adjustment u/s 92CA D+B-C 59,660,647 8. The assessee raised objections before the DRP, but without any success. 9. Before us, the ld. AR strongly contended for the exclusion of the following comparables: i) Mahindra Consulting Engineers Limited ii) Alphageo (India) Limited iii) STUP Consultants Private Limited iv) Semat Ltd v) Kirloskar Consultants Limited 10. In addition, the ld. AR pleaded for inclusion of the following comparables: i) KITCO Limited ii) M.N Dastur & Company (P) Ltd. iii) Consulting Engineers services (India) Private Limited iv) Development Consultants Private Limited 11. We will first address the issues relating to exclusion of the comparables. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s company to the file of the Assessing Officer/TPO. The relevant finding of the coordinate bench reads as under: "20. We have considered the rival arguments made by both the sides, perused the orders of the TPO/AO/DRP and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. So far ITA No.244/Del/2012 as adjustment of the arm's length price of the international transaction is concerned, the argument of the ld. counsel for the assessee is that the same is Nil if the five comparables are excluded from the final set of comparables. From the chart filed by the ld. counsel for the assessee, we find there is no observation of the DRP on the issue of the above five comparables. At the time of hearing, ld. counsel for the assessee filed a copy of the order of the Tribunal in the case of Flour Daniel India (P.) Ltd. (supra) wherein the Tribunal at para 5.9 of the order has observed as under:- "5.9 We have heard the rival submission and perused the relevant material on record including the paper book of the assessee. On perusal of the annual report of M/s Alphageo, we find that during the year under consideration ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns given by the Tribunal [supra]. iii) STUP Consultants Private Limited 17. The functional profile of this company shows that this company is a full service project delivery consultancy company offering diversified services, such as, integrated planning, architectural engineering and project management services for power, transportation, telecommunication etc. The description of principal services provided by the company is civil engineering consultancy. The ld. AR contended that this company is providing services for engineering design software. 18. We do not agree with the contention of the ld. AR. The functional profile of this company is akin to that of the appellant company as both the companies are engaged in providing consultancy services in civil engineering. In our considered opinion, this company is a good comparable and has been rightly used by the TPO. Therefore, no interference is called for. iv) Semat Ltd 19. It appears that the only reason claimed for exclusion of this company is non-availability of Annual report for F.Y. 2007-08. Though the TPO has referred to the Annual Report, but it pertains to F.Y. 2008-09. In our considered opinion, the TPO shoul....