TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 726
X X X X Extracts X X X X
X X X X Extracts X X X X
....asically a captive service provider to the parent company and provided Information Technology Enabled Service (ITES)to its Associated Enterprises (AE) which includes identification and correction of errors within customer's accounts, performing back end remote troubleshooting, measuring the experience customers have when interacting with support agents, etc. During the year under consideration, the assessee provided ITES to its AE and earned revenue of Rs. 13,07,93,056. In its transfer pricing study report, the assessee benchmarked the aforesaid transaction with the AE by adopting Transactional Net Margin Method (TNMM) as the most appropriate method, the assessee selected ten companies as comparables with arithmetic mean of 4.31% as against the margin shown by the assessee of 15.92%. Therefore, the price charged for service rendered was claimed to be at arm's length. Though, the Transfer Pricing Officer accepted TNMM as the most appropriate method, however, he did not accept most of the comparables selected by the assessee. Further, in course of transfer pricing proceedings, the assessee had furnished a fresh set of comparables, out of which, the Transfer Pricing Officer accep....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xpenditure of Rs. 8.94 crore indicates that the company is engaged into marketing activity. Thus, he submitted, the company cannot be treated as comparable. In support, he relied upon the following decisions:- i) PCIT v/s Ameriprise India Pvt. Ltd., ITA no.461/2016, dated 19.10.2016 (Del. HC); ii) PCIT v/s United Health Group Information Services Pvt. Ltd., ITA no.1180/2017, dated 21.12.2017 (Del. HC); iii) PCIT v/s B.C. Management Services Pvt. Ltd., [2018] 89 taxmann.com 68 (Del.); iv) PCIT v/s PTC Software India Pvt. Ltd., ITA no.598 of 2016, dated 16.04.2018; v) PCIT v/s BNY Mellon International Operations India Pvt. Ltd., [2018] 93 taxmann.com 363 (Bom.); vi) PCIT v/s Aptara Technology Pvt. Ltd., [2018] 92 taxmann.com 240 (Bom.); vii) OSC Services Pvt. Ltd. v/s DCIT, [2018] 97 taxmann.com 299 (Del.); viii) XL India Business Services Pvt. Ltd. v/s ACIT, [2017] 97 taxmann.com 77 (Del. Trib.); ix) Amba Research India Pvt. Ltd. v/s DCIT, [2016] 67 taxmann.com 342 (Bang. Trib.); x) Schlumberger India Technology Centre Pvt. Ltd. v/s DDIT, ITA no.640/Pun./2014, dated 10.01.2018; xi) Principal Global Services Pvt. Ltd. v/s DCIT, ITA no.323/ Pun./2015, dated 29.11....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bally. He submitted, since the company is an integral part of the Tata Consultancy Services Ltd., there is dissimilarity in the scale of operation with the assessee and further, the company has a strategy to build on its 'Full Services Offering', that offer global customers an integrated portfolio of services ranging from information technology services to BPO services. He submitted, the company provides wide range of financial products and enterprise support functions such as financial information processing, customer conduct, business process management and analytics. He submitted, operations of the company comprise of transaction processing and other services. Thus, he submitted, the company being functionally different, cannot be a comparable. Further, he submitted, the company owns substantial intangibles which is not the case with the assessee. He submitted, even though the company is in ITES segment, however, it has only one segment of banking and financial service activity. Therefore, it cannot be treated as comparable to the assessee. In support, he relied upon the following decisions:- i) PCIT v/s United Health Group Information Services Pvt. Ltd., ITA no.1180/2017, dat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the impugned assessment year as well. Thus, consistent with the view taken by the Co-ordinate Benches as regards comparability of this company, we are inclined to hold that this company cannot be treated as comparable to the assessee. In this context, we may also refer to the decision of the Tribunal, Delhi Bench, in Morning Star India Pvt. Ltd. v/s DCIT, ITA no.1520/Del./2015, dated 6th May 2019. TCS e-SERVE INTERNATIONAL LTD. 12. Objecting to the selection of this company, the learned Authorised Representative submitted, this company provides broad range of services that cater to the process management requirements of wide range of financial products and enterprise support functions including financial information processing (data processing and customer contact and transaction processing service). He submitted, the company is engaged in the business process outsourcing services to the banking and financial service industry and transport, tourism and hospitality. He submitted, the information available in public domain indicate that the company has got two segments, whereas, the Transfer Pricing Officer has taken entity wide results. Further, he submitted, the company owned su....