TaxTMI 
TaxTMI 
2020 (9) TMI 1257
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....f Rs. 71,851/-. 2. The assessee has raised the following grounds of appeal:- "1. That on facts and in law the Assessing Officer [hereinafter referred as the "AO"] / Dispute Resolution Panel [hereinafter referred as the "DRP"] / Transfer Pricing Officer [hereinafter referred as the "TPO"] erred in making/upholding an addition to total income of Rs. 2,59,64,130 (includes Rs. 2,58,92,279 on account of transfer pricing addition) under the Income Tax Act, 1961 [hereinafter referred as "the Act"] in the order of assessment. 2. The Ld. TPO/AO erred in enhancing the income of the Appellant by Rs. 2,58,92,279 by holding that the international related party transactions pertaining to its information technology enabled (IT) and financial support services do not satisfy the arm's length principle envisaged under the Act and in doing so have grossly erred in: 2.1 not appreciating that none of the conditions set out in section 92C(3) of the Act are satisfied in the present case; 2.2 disregarding the Arm's Length Price ('ALP') as determined by the Appellant in the Transfer Pricing (TP1) documentation maintained by it in terms of section 92D of the Act read w....
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.... the process also neglected the Indian transfer pricing regulations, OECD guidelines on transfer pricing and judicial precedence 3. Hon'ble DRP erred in concluding the Appellant provides high end services i.e. KPO as against ITeS and financial support service, not appreciating the functional, assets and risk profile of the Appellant. 4. That on the facts and circumstances of the case and in law, the AO and DRP has erred in making disallowance of Rs. 71,851 under the provisions of section 14A of the Act read with rule 8D of Income tax Rules, 1962 ('rules') wherein the appellant has not earned any exempt income during the subject year. 5. That on the facts and circumstances of the case and in law, the AO has erred in levying interest under section 234A of the Act when appellant has filed the return within the statutory time. 6. That on the facts and circumstances of the case and in law, the AO has erred in not granting the full credit of TDS claimed by the appellant in its return of income. 7. That on the facts and circumstances of the case and in law, the AO has erred in initiating penalty proceedings under section 271 (1 )(c) of the Act.....
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.... before the learned Dispute Resolution Panel which passed a direction to the TPO and based on these directions the learned transfer pricing officer as per order dated 17/8/2016 computed the arm's-length price of the international transaction wherein 9 comparable companies were retained having their profit level indicator of operating profit/operating cost (OP/OC) was determined at 25.65% further their adjusted margin was determined at 21.96%. Thereafter the operating cost incurred by the assessee of Rs. 327,343,333/- was used against the international transactions of Rs. 373,335,650/- and the final adjustment was made of Rs. 25,892,279/-. 8. In the final list of comparables, the learned transfer pricing officer included the E Clrex services Ltd having margin of 49.49%, Infosys BPO Ltd having margin of 34.39% and TCS E serve Ltd having margin of 62.07%. 9. The learned authorised representative, Shri Sachit Jolly advocate, submitted that in assessee's own case for assessment year 2010 - 11 in ITA number 6906/del/2014 dated 27th of April 2018 the coordinate bench has considered the issue of inclusion of TCS E serve Ltd in para number 11 of that order and same was remitted back t....
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....ned transfer pricing officer to exclude all these three comparables for all the above years following comparability analysis in some other judicial precedent. He submitted that if in case of company X if comparable Y is excluded, there is no reason to exclude that comparable Y in every other case. He submitted that this is neither the essence of the comparability analysis nor it supports the logic. He submitted that for each of the comparable companies only the functions performed by the company, assets employed by the company and risks assumed by the company are required to be compared. He further submitted that judicial precedents cannot be used in such a blatant manner for exclusion of one comparable if excluded in case of one assessee to be always excluded for all other assesses. 12. The learned authorised representative submitted that the judicial precedent binds the coordinate bench if there rendered in assessee's own case. It is not fair to challenge them in some other proceedings where they need to be followed , unless those orders are challenged before the higher forum and are upset. 13. We have carefully considered the rival contention and perused the orders of the ....