TaxTMI 
TaxTMI 
2019 (8) TMI 647
X X X X Extracts X X X X
X X X X Extracts X X X X
....u/s 143 r.w.s. 144C(13) of the Income Tax Act, 1961 pursuant to the directions of Ld. Dispute Resolution Panel-I, Mumbai [DRP] u/s 144C(5) dated 23/12/2015. The grounds raised by revenue reads as under: - 1. Whether on the basis of the facts and circumstances of the case and in law, the Hon'ble DRP was correct in accepting four comparables namely E4e Healthcare Business Services Limited. Dion Global Solutions Limited and Omega Healthcare Management Services Pvt. Ltd, and Informed Technologies India Limited as a comparables without appreciating the fact that these companies are not similar to the functions performed by the assessee and it is not in accordance with the requirements of degree of comparability as required in Rule 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....documentation prepared by the Respondent be accepted. 2. Further in the circumstances of the case and in law, the Hon'ble DRP erred in confirming the action of the Assessing Officer/Transfer Pricing Officer in selecting Accentia Technologies Limited ('Accentia') and Eclerx Services Limited ('Eclerx') as comparables for benchmarking the international transaction of provision of investment/economic/business research services provided by the cross-objector/Respondent to its AE without appreciating that the same are not comparable on the ground of functionality. It is therefore prayed that Accentia and Eclerx be excluded from the final set of comparable companies, since they are functionally not comparable ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Length Price. The assessee had two wholly owned subsidiaries-one in USA & another in UK. The assessee earned service revenue of Rs. 20.09 Crores from its AE and in its Transfer Pricing Study Report, benchmarked the transactions using Transactional Net Margin Method [TNMM] with Profit Level Indicator being Operating Profit/Operating Cost. It arrived at margin of 18.18% as against mean margin of 3.97% reflected by 15 entities. However, treating the functions of assessee as KPO, Ld. TPO rejected the search adopted by assessee using the key words as 'BPO/ITES'. Finding more fallacies/shortcoming in assessee's methodology, the comparable entities were rejected. In the final analysis, adopting 2 entities namely Accentia Technologies Ltd. & Eclerx....
X X X X Extracts X X X X
X X X X Extracts X X X X
....O. The second benchmarking done by the assessee also could not find favor with Ld. DRP since it was, interalia, noted that the assessee did not follow any structured search procedures to identity the comparable and data used was not made available to Ld. TPO. 3.3 Proceeding further, although Ld. DRP upheld the action of Ld. TPO in selecting 2 comparable entities viz. Accentia Technologies Ltd. & Eclerx Services Ltd., however, at the same time, Ld. DRP agreed with assessee's submissions for inclusion of 4 entities namely (i) Dion Global Solutions Ltd. (ii) E4 Healthcare Business Services Ltd. (iii) Omega Healthcare Management Services Pvt. Ltd. & (iv) Informed Technologies India Ltd. Aggrieved by the inclusion of 4 entities, the revenu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inimum that could be allowed to be retained by the AEs and therefore, the same methodology may be adopted for the year under consideration also. 5. The Ld. Authorized Representative for Assessee [AR] has drawn our attention to the orders of Ld. TPO in subsequent years to submit that a particular methodology has been accepted by the assessee as well as revenue to work out the TP adjustment and therefore, the same methodology should be applied in this year also, facts being pari-materia the same. 6. Upon due consideration, we find force in the arguments advanced by Ld. AR. The perusal of paras 10.3 & 10.4 of order of Ld. TPO for AY 2012- 13, as placed on record, would reveal that revised margins of USA & UK AEs have been accepted to be ....