TaxTMI 
TaxTMI 
2019 (7) TMI 1080
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....ted as under: This Miscellaneous application is filed against the order of Hon'ble Income Tax Appellate Tribunal, 'A' Bench, Hyderabad dt. 18.04.2019 vide ITA No. 2010/Hyd/2017, seeking rectification on the following submissions. 1. In the appeal referred above, the appellant raised the following grounds: "1. The Learned (Ld) Dispute resolutions panel (DRP)/ Assessing Officer (AO) are erroneous in law and on the facts of the case. 2. The Ld. DRP/ Ld AO ought to have accepted the profit margin (DP/DC) of 6.27% adopted by the appellant as having complied with the arm's length principle. 3. The Ld DRP/AO are not justified in law in considering wrong comparables and consequently arriv....
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....ther ground that may be urged at the time of hearing with the prior approval of the Hon'ble ITAT. Additional Grounds 1. The Ld. TPO / DRP erred in computing/ confirming the margin of appellant company by treating Fringe Benefit Tax("FBT") as an operating expense, which resulted in reducing the margin of the Appellant company from 6.27% to 5.92%. 2. The Ld TPO/ORP are not justified in law in considering FBT as an operating expense in case of Appellant company as the Ld. TPO himself did not consider the FBT as an operating expense while computing the margins of com parables. " 2. The Hon'ble Income Appellate Tribunal disposed-off these grounds in its order dated 18.04.2019 in ITA No.2010/Hyd/2017. ....
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....see, following the decision of the co-ordinate benches of the Tribunal in the assessee's own case for Assessment Year 2007-08 in ITA No.845/Bang/2011 and Triology E-Business software India ,P. Ltd. case (supra), we hold that this company ought to be omitted form the list of comoarao.es. The AO/TPO are accordingly directed." We notice that the decision of the ITAT, Bengaluru bench cannot be relied as it refers to AY 2007-08 and it is based on several other decisions. We notice that similar to assessee, Celestial Bio Labs also offers several services to its AEs and since we are determining with ALP based on TNMM, we consider the average margin of all the several activities carried on by the assessee. On a compartmentalizing two p....
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....the Hon'ble ITAT directed the Ld. TPO to exclude the company (Celestial Biolabs Ltd) as a comparable for AY 2008-09. 6. Therefore, in the above case the Hon'ble Bengaluru bench has clearly demonstrated that functional profile and other parameters are not changed in the year under consideration which is A.Y 2008-09, and accordingly excluded the same as a comparable in AY 2008-09. 7. Further, we would like to humbly submit that the Hon'ble ITAT observed in Para 9 of the order as follows: II As regards Celestial Biolabs Ltd., Id. AR submitted that this company cannot be a comparable to the assessee company as it is engaged in R&D activities and renders services to specific sectors. It provides contract re....
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....ct, as Hon'ble Bengaluru ITAT in the case of 3DPLM (supra), which is also into software development services, excluded Celestial Biolabs Ltd for AY 2008-09 very much on the basis of exclusion of the same in earlier year i.e. AY 2007-08 and also on the basis of same profile being maintained for AY 2008-09, which clearly demonstrate the said company is functionally dissimilar. 9. It is therefore humbly submitted that there is a mistake apparent from the record in the order of the Hon'ble ITAT to this extent and hence it is prayed that the Hon'ble Income Tax Appellate Tribunal be pleased to rectify the above mistake by passing appropriate order." 2.1 The ld. AR of the assessee referring to the above factual background, ....
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....assessee, Celestial Bio Labs also offers several services to its AEs and since we are determining with ALP based on TNMM, we consider the average margin of all the several activities carried on by the assessee. On a compartmentalizing two profit making companies with several activities, we can compare the end result, unless they are into product or highly diversified or some activities which will modify the profit making ability of the organization. In this case, we do not see any reason to interfere with the selection process. Therefore, the objection of the assessee to exclude the said company is hereby rejected. 5.1 With regard to other submissions of the assessee, we have considered the decision of ITAT, Bengaluru Bench and other ord....