TaxTMI 
TaxTMI 
2022 (8) TMI 90
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.... filed challenging the Order dated 22ndNovember, 2019 passed by the Income Tax Appellate Tribunal ('ITAT') in ITA 1934/Del./2018 for the Assessment Year (hereinafter referred to as 'AY') 2012-13. 2. Learned counsel for the Appellant states that the ITAT has erred in laying down stringent standards of comparability and attempting to identify exact replica of taxpayer for comparability analysis, whereas the Indian Law and the international jurisprudence recognize the reality that there cannot be an exact comparable in a given situation without any difference and without appreciating that such stringency will defeat the purpose of flexibility provided in the comparability analysis for determination of Arm's Length Price (ALP). 3. He states t....
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....ment years in the case of the assessee and Infosys BPO had acquired Portland Group Pty Ltd., Australia during the year under assessment. 6. Learned counsel for the respondent, who appears on advance notice, points out that the TPO had insisted on service revenue filter from export/ITES of 75% and had rejected the assessee's suggestion to adopt the filter of 50% export. In support of his contention, he relies upon the order passed by the TPO dated 15th February, 2016. The relevant portion of the said order is reproduced hereinbelow:- No. Description of filter Remarks of this office . .... .... 2 Selected companies which had positive sales and ratio of other operating income to sales > 50% over the time period under consideration. T....
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....in order to nullify the effect of transfer of income to a jurisdiction outside India, if any, in respect of the controlled transaction. The exercise of determining the arm's length price in respect of international transactions between related enterprises is aimed at determining the price which would have been charged for products and services, as nearly as possible, if such international transactions were not controlled by virtue of their being executed between related parties. The object of the exercise is to remove the effect of any influence on the prices or costs that may have been exerted on account of the international transactions being entered into between related parties. It is clear that for the exercise of determining the arm's ....
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.... used, is ignored. 42. Before concluding, there is yet another aspect of the matter that needs consideration. The Tribunal proceeded on the basis that while applying TNMM method, broad functionality is sufficient and it is not necessary that further effort be taken to find a comparable entity rendering services of similar characteristics as the tested entity. The DRP held that TNMM allows flexibility and tolerance in selection of comparables, as functional dissimilarities are subsumed at net margin levels, as compared to Resale Price Method or Comparable Uncontrolled Price Method and, therefore, the functional dissimilarities pointed out by the Assessee did not warrant rejection of eClerx and Vishal as comparables. 43. In our view, the ....