TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 1471
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....ry or expedient' to refer the matter to the Transfer Pricing Officer ('TPO') for computation of the arm's length price (,ALP'), as is required under section 92CA(1) of the Income-tax Act 1961 ('Act'). 3. On the facts and circumstances of the case and in law, the Ld. AO/Hon'ble DRP/Ld. TPO erred in law and in facts by not following the principle of consistency without change of facts vis a vis previous years. In other words, Assessing Officer/TPO/DRP erred in law in rejecting the benchmarking approach adopted by appellant in Transfer Pricing documentation, whereas admittedly, the functional profile and nature of international transactions in the current year are same as previous year. The Assessing Officer/DRP/TPO failed to consider that similar benchmarking approach and TP documentation has been accepted in previous years. 4. On the facts and circumstances of the case and in law, the Ld. AO/Hon'ble DRP/Ld. TPO erred in law and in facts by not taking cognizance of the Article 7(5) of the India Korea tax treaty. 5. On the facts and circumstances of the case and in law, the Ld. AO/Hon'ble DRP/ Ld. TPO failed to understand the business m....
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....Hon'ble DRP/Ld. TPO erred in not making suitable adjustments to account for differences in the risk profile of the assessee vis-a-vis the comparables. 15. On the facts and circumstances of the case and in law, the Ld. AO/Hon'ble DRP/Ld. TPO erred by not applying the Proviso to section 92C of the Act and failed to allow the appellant the benefit of variation of 5 percent in determining the Arm's Length Price . 16. On the facts and circumstances of the case and in law, the Assessing Officer/DRP/TPO failed to use segmental results of companies for the purposes of benchmarking wherever available. 17. On the facts and circumstances of the case and in law, the Assessing Officer/DRP/TPO erred in comparing appellant with companies having disproportionate scale of operations, large turnover, different cost structure and asset base. 18. On the facts and circumstances of the case and in law, AO/DRP/TPO erred in including companies with peculiar economic circumstances and also erred in excluding companies with declining turnover. 19. On the given facts and circumstances of the case and in law, AO erred in charging interest u/s 234B. 20. That the explanations given....
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....ethod (MAM) and operating profit/operating costs (OP/OC) as the profit level indicator (PLI). In the transfer pricing study, the assessee had arrived at 12 comparable companies with an average margin of -4.05%, each using multiple year data, for all the three PO's. This has been compared with the assessee with operating margin of 8.82% for RS 3 project, 9% for RS 1 project and 9.08% for BMRCL project. 2.4 The comparables selected by the assessee for benchmarking international transactions with its AE's are as under: S.NO. Name of the comparable company 1 Access India Advisors Ltd. 2 Asian Business Exhibition & Conferences Ltd. 3 EDCIL (India) Ltd. 4 ICARA Management Consulting Services Ltd. 5 Cyber Media Research Ltd. (Earlier IDC (India) Ltd.) 6 In House Productions Ltd. 7 India Tourism Development Corporation Ltd. 8 Ma Fol Global Services 9 Ma Fol Management Consultants Ltd. 10 Overseas Manpower Corpn. Ltd. 11 Times Innovative Media Ltd. 2.5 The Ld.TPO applied various filters and held the comparables selected by the assessee were functionally different in some cases, and in some comparable he held that the financial year ending were different. He....
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....ment years, viz-a-viz the year under consideration. We are thus restricting the adjudication only to the extent of the comparability of the five companies disputed by the assessee from being excluded/included as mentioned hereinabove. 5.2 Ld.AR placed reliance upon the following judgments in support of his plea regarding the application of principle of res judicata to the facts of the present case: a) Radhasoami Satsang vs. CIT reported in 193 ITR 321 (SC); b) Tamasek Holdings Advisors (I) (P) Ltd vs. DCIT (2013) 38 Taxmann.com 80 (Mumbai-Trib); c) Britons Carpet Asia Pvt. Ltd. Vs. DCIT (2011) 46 SOT 289 (Pune); d) CIT vs. Neo Poly Pack (P) Ltd. (2000) 245 ITR 492 (Del). 5.3 The Ld. AR submitted that these comparables have been considered and has been decided consistently in the preceding and subsequent assessment year, in a particular manner, for the sake of consistency, the same view should continue to prevail in the year under consideration, unless there is some material change in the facts. 6. On the other hand the Ld. DR submits that the basic characterization is different and every year has to be considered differently. He submitted that the inclusion/exclusion of a ....
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....he earlier assessment year as well as in the succeeding assessment year. The ld. DR does not dispute regarding the rejection of this company by the Ld. TPO in the earlier as well as succeeding assessment year. Thus following the rule of consistency we direct the ld. TPO to exclude this company in the list of comparables. HCCA Business Services Ltd. 9. This company has been chosen by the Ld.TPO. This is a company that offers services like payroll processing and compensation structuring, management of labour and legal compliances, payroll legs regulatory compliances, employee reimbursement processing and accounting services. In a nutshell this company is a leading service provider in the entire gamut of HR operations and administration. 9.1 Thus this company is not functionally similar to the activities carried on by the assessee and more so when it has been rejected by the Ld. TPO in the earlier assessment year as well as in the succeeding assessment year. The ld. DR does not dispute regarding the rejection of this company by the Ld. TPO in the earlier as well as succeeding assessment year. Thus following the rule of consistency we direct the ld. TPO to exclude this company in t....