TaxTMI 
TaxTMI 
2021 (2) TMI 715
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....) erred in restricting the addition of Rs. 8,51,35,703/- to Rs. 1,56,78,265/- made by the Assessing Officer on the basis of working provided by the TPO, where the arms length margin was taken at 27.80%." 3. Briefly the facts are, as stated by the Transfer Pricing Officer the assessee, a resident company, is a joint venture between Systems Integrated Telemarketing, Netherlands and Tata group India with equal participation. Basically, the assessee provides contact centre services, i.e. e-mail web based chart solutions and voice responses to the customers of SITEL Corporation, USA and SITEL UK Ltd. During the year under consideration, the assessee received an amount of Rs. 69,77,57,962 from SITEL, USA and SITEL UK towards provision of custo....
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....).In course of proceedings before the first appellate authority, the assessee furnished additional evidence under rule 46A to demonstrate that out of the gross revenue earned from the end customers, the AEs have retained certain amount towards marketing related functions performed by them and remitted the balance revenue to the assessee. It was submitted, the revenue retained by the AEs varied between 0% to 28% of the gross revenue earned from the end customers for various projects. It was further submitted, as against the revenue returned of Rs. 8,51,35,703/- by the AEs, they have incurred cost of Rs. 6,03,09,108/-. Thus, it was submitted, there is no question of assessee shifting any profit to AEs. After considering the submissions of the....
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....hat extent. 4. The learned Departmental Representative strongly relying upon the observations of the TPO submitted, since the assessee was unable to justify the claim of idle capacity adjustment, the TPO was correct in disallowing it. Therefore, he submitted, the adjustment proposed by the TPO should be restored. 5. Per contra, strongly relying upon the observations of the first appellate authority learned Counsel for the assessee submitted, the assessee, on its own, has no clients in the overseas market. He submitted, the AEs in USA and UK perform marketing activities and arrange the end customers to whom assessee provides services. He submitted, since the AEs arranged the customers and provided marketing services, they retained, on ....
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....stment proposed by the TPO is on account of disallowance of idle capacity adjustment and rejection of certain comparables. Whereas, before the first appellate authority, the assessee had furnished a number of additional evidences to demonstrate that the profit earned by the AEs from the revenue retained from end customers is at arm's length. From the materials placed before us we find that in respect of some of the projects the AEs, in fact, have incurred loss and in respect of some of the projects with the end customers the AEs have earned negligible profit margin of 1.69%, 2.29% and 3.39%. Only, in respect of two of the projects, the profit margin earned by the AEs work out to 6.97% and 20.93%. Thus, compared to the marketing function....