TaxTMI 
TaxTMI 
2019 (2) TMI 1805
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..../w section 144C(13) of the Income Tax Act, 1961 (for short "the Act"), in pursuance to the directions of the Dispute Resolution Panel-1 (DRP), Mumbai,for the assessment year 2011-12. ITA no.1964/Mum./2016 Assessee's Appeal 2. Ground no.1 being general in nature does not require specific adjudication. 3. In grounds no.2 to 10, the assessee has challenged the addition made on account of transfer pricing adjustment. 4. The learned Authorised Representative, at the outset, submitted that if ground no.8, challenging selection of certain comparables is decided in favour of the assessee, the other grounds raised in relation to transfer pricing adjustment would be of academic nature. 5. Brief facts are, the assessee, an Indian com....
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....as supported the internal TNMM by undertaking analysis applying external TNMM wherein it had selected six companies as comparables with average mean margin of 11.00%. Since, the assessee had shown margin of 16.87% in case of AE transaction and profit margin of 3.90% in the case of non-A.E. transaction, it claimed that the price charged / paid to the AEs to be at arm's length. After examining the transfer pricing study report and submissions of the assessee, the Transfer Pricing Officer rejected internal TNMM by stating that segmental details are not available. As regards the comparables selected under external TNMM, the Transfer Pricing Officer rejected some of the comparables selected by the assessee including M.N. Dastur & Co. Pvt. Ltd. H....
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....ndia Ltd., Rites Ltd. and WAPCOS Ltd., being Government Companies, they cannot be treated as comparable, since the dynamics of these companies are different considering the fact that they have not been driven by profit motive. He submitted, while deciding the comparability of Government Companies in assessee's own case in assessment year 2008-09 and 2010-11, the Tribunal has held that Government Companies cannot be treated as comparable. He submitted, the same view was expressed by the Tribunal while deciding assessee's appeal in assessment year 2010-11 in respect of the very same comparables which have been considered in the impugned assessment year. Thus, he submitted, the issue is otherwise covered in favour of the assessee by virtue of ....
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.... already decided the issue in respect of the very same comparables in assessee's own case in the preceding assessment years, respectfully following the aforesaid decisions of the Tribunal, we exclude Engineers India Ltd., Rites Ltd. and WAPCOS Ltd. from the list of comparables and direct the Assessing Officer to compute the arm's length price accordingly. Considering the submissions of the learned Authorised Representative that upon exclusion of these three comparables, the margin shown by the assessee would fall within +/-5% of the average margin of the remaining comparables, hence, no adjustment is required to be made to the arm's length price, we refrain from deciding the other grounds raised by the assessee on the transfer pricing adjus....
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....MM, the assessee had selected six comparables one of them being M.N. Dastur & Co. Pvt. Ltd. However, the Transfer Pricing Officer rejected this company on the reasoning that besides Engineering services it is involved in other activities like taking premises on rent and giving it on rent, whereas, the segmental accounts are not available. While considering the objections raised by the assessee the DRP observed that as per functional profile provided in the annual report, this company is functionally similar to the assessee. They also observed that as per the annual report, 91% of the revenue arises out of engineering consultancy services. Thus, the DRP accepted M.N. Dastur & Co. Pvt. Ltd. as a comparable. 17. The learned Departmental Rep....