2019 (2) TMI 1993

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....g that gross profit margin is not a suitable allocation key for dividing common expenses between various segments since the predominant segment of the appellant is the service segment for which, calculation of gross profit cannot be done? (i) Whether, in the facts and circumstances of the case and in law, the Tribunal erred in accepting a functionally different company as a comparable and in further rejecting the appellant's reliance on the company's website for ascertaining its nature of business?" 2. The brief facts are that for the A.Y. 2008-09, the assessee [i.e. the appellant] reported its international transactions, including international transaction of "Receipts for services rendered"; it engages itself in online market ....

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....ount had been the basis for proportionate allocation of costs, there was no objection or illegality attached to it. The Court of course in that case was cognizant of the circumstances that the principle of headcount had been applied consistently in the past by the assessee. Learned counsel for the Revenue relied upon the Tribunal's order and submitted that the rejection of the headcount principle was justified. The Tribunal's reasoning was that the headcount principle was irrational given the disparity of salaries of the employees of the different segments. 5. It is apparent that the headcount basis is an acceptable principle and known to law. EHTP India Pvt. Ltd. (supra) recognized it; although the Court took note of the previous practi....