TaxTMI 
TaxTMI 
2022 (10) TMI 482
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....hi (hereinafter referred to as 'the AO or Assessing officer') which was passed on the transfer pricing order dated 20.01.2021 and the DRP-2, New Delhi directions dated 10.01.2022 u/s 144C(5) of the Act. 2. The facts in brief are assessee/appellant Organica Water Private Limited ("Organica India") was incorporated on 29th December, 2010 as a wholly owned subsidiary of Organica Technologies Zrt, Hungary. The Company is engaged in the business of providing services in respect of wastewater treatment plant in India and abroad and also providing design related engineering services to its AEs and exploring business opportunity in the field of water treatment to/ for its holding company. Organica Zrt is provider of ecologically engineered wastewa....
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....f 13 comparable companies with arm's length margin (represented by median of data set) 9 of 19.80%. The Ld. TPO admitted that the Assessee has AE and Non-AE transactions, and that TP is to be applied only on the AE transactions, and he did not accept segmental level profitability provided by the Assessee and instead calculated margins on entity level basis wherein, the Ld. TPO included margin arising out of non-AE transactions as well. The Ld. TPO further computed proportionate adjustment on the basis of revenue. The Ld. AO passed the draft assessment order dated 1st April 2021 enhancing the income of the Assessee on account of the adjustments made by the Ld. TPO by Rs. 3,14,00,113. Aggrieved by the approach adopted by the Ld. AO / the L....
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....nces of the case, the order passed by the Ld. Assessing Officer ("Ld. AO") is bad in law and void ab-initio. 2. That on facts and circumstances of the case and in law, the reference made by the Ld. AO suffers from jurisdictional error as the Ld. AO did not record any reasons in assessment order based on which he reached the conclusion that it was "expedient and necessary" to refer the matter to the Ld. Transfer Pricing Officer ("Ld. TPO") for computation of the arm's length price, as is required under section 92CA(1) of the Income Tax Act, 1961 ("Act"). 3. That on facts and circumstances of the case and in law, the Ld. AO/Ld. TPO/Ld. Dispute Resolution Panel ("Ld. DRP") erred in making an addition of Rs.3,26,67,008/- to the return....
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....great difference in past years and present AY as the non-AE business which contributed 54.94% and 74.23% in F.Y. 2014-15 and 2015-16 respectively had declined to nearly 1.58% in the present F.Y. 2016-17. However, the assessee did not scale down its operation in terms of employees size or other over heads as it was optimistic of getting non-AE business in future. It was pointed out during the year under consideration the employees were engaged for development activities. Ld. AR referred to the list of employees and submitted that most of the employees were dealing with marketing functions and which were primarily in regard to the non-AE business only. It was submitted that Ld. AO had fallen in error in taking into consideration the revenue f....
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....stical purposes. 8. Ground no. 7; In regard to this ground it can be observed that Ld. DRP has taken into consideration the FAR to include and exclude the comparables as follows :- S. No. Name of company Contention of Assessee Directions of DRP 1. Mitcon Consultancy & Engg. Services Ltd. To be excluded. FAR similar. To be included 2. Tata Consulting Engineers Ltd. To be excluded. FAR not similar. To be excluded 3. Ridings Consulting Engineers India Limited. To be excluded. FAR not similar. To be excluded. 4. L & T Technology Services Ltd. To be excluded. FAR not similar. To be excluded. 5. Aakar Abhinav Consultants Pvt. Ltd. To be excluded. FAR similar. To be included. 6. Feedback Infra Pvt. L....
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....r Karkhana Ltd. * Successful commissioning of new 7000 TCD capacity sugerfactory at Sahakar Maharshi Bhausaheb Thorat SSKL and 2500 TCD at Kisanveer Khandala SSKU (Completion of erection). 2. Aakar Abhinav Consultants Pvt. Ltd. a. Functionally not comparable: The company, Aakar Abhinav is an engineering consulting firm serving clients in sectors such as transportation planning, traffic engineering, architecture, urban infrastructure and project management. 3. Feedback infra private limited. a. Functionally not comparable Feedback infra is a leading infrastructure services company, with over 9,500 employees and associates. The company provides high end advisory and consulting services in the field of transportation, energy and ur....