TaxTMI 
TaxTMI 
2022 (3) TMI 291
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....perused the materials available on record. During the year under consideration, Intelenet Global Services Pvt. Ltd. was merged with Serco BPO Pvt. Ltd. from 06/07/2011. The order passed by the ld. TPO pertains to the period 01/04/2011 to 06/07/2011. The assessee is a leading Business Process Service provider in India. The assessee is led by the Intelenet Management team, backed by Blackstone, a leading Global Private Equity Player. Blackstone's support is testimony to the strength of the Intelenet brand, the management team and the potential of the global BPO industry and will provide Intelenet with the necessary thrust to help augment its growth trajectory and vision. The assessee company has various fully owned subsidiaries such as M/s. Intelenet America Inc, USA; M/s. Intelenet Inc, USA and M/s. Intelenet UK Ltd., UK etc. 3.1. On perusal of 3CEB report of the assessee, the ld. TPO observed that assessee has given guarantee to its AE. The assessee submitted that it acquired a company through its wholly owned subsidiary Snow Holding Company Ltd. The assessee had provided a corporate guarantee to a bank, on the strength of which, the bank has provided funds to the wholly own....
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....ly 2011) GBP 9966 7,13,075 Total 59,31,924 3.3. The ld. TPO observed that assessee should have charged guarantee fees of Rs. 59,31,924/- from its AE for providing corporate guarantee and performance guarantee as above. 3.4. We find that the ld. DRP had upheld the action of the ld. TPO by following its directions given in earlier years. 3.5. We find at the outset, both the parties mutually agreed that this issue is a recurring issue from A.Yrs. 2008-09 onwards and the same has been decided by this Tribunal in assessee's own case from A.Yrs. 2008-09 to 2011-12 and also in A.Y. 2013-14. We find that this Tribunal in assessee's own case for A.Y. 2013-14 in ITA No. 7309/Mum/2017 dated 06/04/2021 had addressed the very same issue as under:- "5. Provision of Corporate and performance guarantee 5.1. The assessee acquired a company through its wholly owned subsidiary namely Snow Holding Company Limited. The assessee provided corporate guarantee to a bank that provided funds to wholly owned subsidiary for the said purpose. The assessee also provided guarantee to Railway Pension Trustee Corporation Ltd., on....
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....ee by its AE. It is further pleaded that entire compensation received from the customer back to the assessee. We have noted that there is no finding of TPO on these facts. The TPO while making adjustment simply follows the adjustment made in earlier years. Similarly, this aspect is not considered by the learned DRP. Considering the aforesaid factual aspects this part of ground of appeal related with performance guarantee is restored to the file of assessing officer/TPO to examine the effect and pass the order a fresh in accordance with law." 3.6. Respectfully following the aforesaid decision, we hold that ALP of Corporate guarantee shall be computed @ 0.5% of guarantee value and as regards the determination of ALP for provision of performance guarantee, the same is restored to the file of the ld. TPO for fresh adjudication in the light of above mentioned directions given by this Tribunal. Accordingly, the ground Nos. 1-1.5 raised by the assessee are allowed for statistical purposes. 4. The ground Nos. 2.1 - 2.4 raised by the assessee are with regard to TP adjustment made in the sum of Rs. 55,29,690/- in respect of provision of back office services. 4.1. We have heard rival....
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....lars Intelenet Inc Intelenet UK Intelenet (UK) Services Ltd., Other Non AE Grand Total (Matching with Audited P & L) Comments Revenue 10,10,87,305 8,14,64,984 1,19,30,049 1,76,24,15,094 1,95,68,97,432 as per related parties schedule in audited financials Salary-direct 2,69,72,234 3,45,90,047 26,49,516 88,42,89,128 1,16,21,17,204 As per 12 months actual payroll Salary-non- direct 1,37,24,999 1,10,60,803 16,19,787 18,72,10,689 allocated based on revenue Recruitment 6,69,924 8,59,132 65,807 2,59,77,509 2,75,72,373 allocated based on direct salary Training 1,04,686 1,34,253 10,283 46,89,749 49,38,971 allocated based on direct salary Connectivity 22,19,408 17,88,593 2,61,928 4,87,75,330 ....
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....sp;2,57,981 15,73,26,245 16,15,31,828 revenue/actual if any thing specific Entertainme nt expenses 59,729 62,736 13,896 29,82,412 31,18,773 No of employees Payments to auditors 80,068 64,526 9,449 13,95,956 15,50,000 revenue Bad debts written off - - - 2,58,00,677 2,58,00,677 actual Provision for doubtful debts - - - 1293177 1293177 actual Loss on fixed assets sold / scrapped / written off 9,384 9,856 2,183 13,31,095 13,52,518 employees Provision for estimated losses on onerous com - - - 9,44,75,197 9,44,75,197 actual Provision for anticipated losses - - - 15,52,420 15,52,420 actual Depreciation 58,13,516 61,06,188 13,52,551 18,96,56,153 20,29,28,409 No. of employees Miscellaneo us Expenses 2,40,513 ....
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....ults audited. The segmental results are reflected in the annual accounts of the company as per the mandate provided in Accounting Standard - 17 issued by the Institute of Chartered Accountant of India. Other than that, the segmental data submitted by the assessee before the ld. TPO need not be statutorily audited. The audited segmental results are furnished to the ld. TPO by the assessee only to provide more authenticity to the data contained therein. Nothing prevents the ld. TPO to verify and examine the unaudited segmental results matching with the overall audited financial statements furnished before him. Hence, the action of the ld. TPO in rejecting the segmental results furnished by the assessee for the mere reason that the same are not audited, is hereby dismissed. Reliance in this regard is placed on the decision of this Mumbai Tribunal in the case of Tecnimont ICB Pvt. Ltd., in ITA No. 7098/Mum/2010 dated 25/02/2011. 4.5. We also find the reasons stated by the ld. DRP for rejecting the segmentals are factually wrong. In this regard, the relevant observations of the ld. DRP are reproduced hereunder:- "6.1.6 From the above accounts as furnished, it is seen that ma....
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....ssuming if all the comparables chosen by the ld. TPO are to be accepted, the arithmetical mean margin of comparables is only 20.52%. Hence, the transactions of the assessee would be at arm's length requiring no TP adjustment. Accordingly, the ground Nos. 2.1 to 2.4 raised by the assessee are allowed. 5. The ground No. 3 raised by the assessee is with regard to rectification and error in computation of total income of the assessee. The ld. AR stated that the ground No. 3.1 to 3.5 raised by the assessee does not survive in view of section 154 order passed by the ld. AO on 11/11/2016 rectifying the returned income of the assessee to 16,80,98,430/- instead of Rs. 138,66,87,018/- pursuant to the approval of merger of Intelenet Global Services Pvt. Ltd., and Serco BPO Pvt. Ltd., by the Hon'ble Bombay High Court w.e.f. 06/07/2011. Since relief is already granted to the assessee in the section 154 order dated 11/11/2016, the ground Nos. 3.1 - 3.3 raised by the assessee does not survive. 6. The ground No. 3.4 raised by the assessee is seeking relief for MAT credit. 6.1. We have heard rival submissions and perused the materials available on record. We find that assessee had ....