TaxTMI 
TaxTMI 
2020 (2) TMI 1179
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....essing Officer (AO) made a reference to the Transfer Pricing Officer (TPO) for determining the arm's length price (ALP) of the international transactions. The only international transaction in dispute before the Tribunal through this appeal is 'Provision of Carpeting, designing, planning and estimation services' with transacted value of Rs. 5,53,40,229/-. The factual panorama qua this transaction is that the assessee rendered carpet designing services to its Associated Enterprises (AEs). The assessee computed its own Profit Level Indicator (PLI) of Operating profit to Total Cost (OP/TC) at 8.97% under this segment. Ten companies were chosen as comparables with their mean PLI of OP/OC at 7.93%. That is how, the assessee claimed this international transaction to be at ALP. The TPO made certain alterations to the list of comparables. He shortlisted eight companies as comparable with certain inclusions/exclusions, in/from the assessee's list of comparables. On this basis, the TPO proposed certain transfer pricing adjustment which was recommended by the AO in the draft order. The assessee assailed the selection of comparables before the Dispute Resolution Panel (DRP), which excluded on....
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....stomer Support are logged on by various Brinton group entities. The CRM Manager forwards the above requisitions to the assessee for feasibility analysis. Under the head "Functions performed" by assessee, it has been mentioned that on receipt of instructions from BLK via CRM database as regards the projects to be executed, the team at the assessee's office commences work on the project which involves Planning, Estimation and Designing services. Planning and Estimation services are carried out by Interior Designers, Architects and Civil Engineers of the assessee who download the request for services made by various Brinton group companies. After that, it proceeds with the execution of the task which comprises of 'quick take off' involving giving client a brief idea as to the quantity and cost estimations, technical inputs involving giving technical inputs pertaining to the layout and other specific issues raised by the customer on their orders; recommending layout, namely, recommendations about the nature of quantity to be manufactured, changes in the colour scheme etc.; definitive plans for approval, namely, converting the layout into 3D image using CAD/CAM software; and sending the....
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....to the same by submitting that it was functionally different and also a big brand. The TPO rejected the assessee's contentions and included the same in the final list of comparables. The assessee remained unsuccessful before the DRP as well. 7. Having head both the sides and gone through the relevant material on record, we find from the Annual report of Infosys BPO Ltd., a copy of which has been placed on record, that its total revenue stands at whopping Rs. 1129.11 crore as against the assessee's revenue under this segment at a mere Rs. 5.53 crore. Segmental information of this company is available at page 403 of the paper book, which divulges that this company has segments of rendering services in the Financial sector, Manufacturing sector, Telecom sector, Retail sector and Others. Total revenue of Rs. 1129 crore and odd has been earned from the above five major sectors. The assessee's design services are meant only for the Manufacturing of carpets as against the Infosys BPO Ltd. engaged in rendering ITeS services not only for Manufacturing but also for Financial, Telecom, Retail and Other sectors. Operating profit rates of such segments, as per segmental information, varies f....
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....he comparability is the nature of services provided. Even under the KPO services, as per the CBDT Notification No.890 (E), as taken note of by the TPO, call centre, data processing, engineering and design, geographic information system services, human resource services, medical transcription, support centres etc. have also been classified under one category of KPO. It does not mean that a company rendering call centre or back office operations becomes comparables to a company rendering geographic information system services or engineering and design or medical transcription services etc. Further comparability within the overall category of KPO service is also required to be separately established for treating a particular company as comparable. 10. Adverting to the facts of the instant case, we find that the assessee's functional profile under this segment is that of design services. On the other hand, the annual report of Eclerx services, whose copy has been placed at page 258 onwards of the paper book, shows that this company has rendered services to the financial institutions for planning their priorities by partnering with them to increase control, execute ongoing functions wi....
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....has further been mentioned that due to these developments, the company invested large amount of funds in the development of EMR software and SaaS model marketing of the same in the US. It has still further been mentioned that this company supported a Product Division under the name of Iridium and with a focused approach. The product team was able to come up with end-to-end global work flow automation system that help in the day-to-day work flow. The products like Iridium Medical Transcription Automation software, Iridium certified home based medical transcription, Iridium certified medical transcription, Falcon-2000, etc., are few of the products which have been accepted by customers. It has also been mentioned in the Annual report that: "since August, 2010 Accentia's products development team, along with their functional experts and development partners have been involved in the mission of designing and developing a world class fully integrated multi-disciplined cloud based host.......... Application which integrates all services from electronic medical record (EMR) Practices...... Management System (PMS) - Code Mapping/Scrubbing - Medical Billing and Receivables Management System....