2018 (4) TMI 1934

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....owns 100% export oriented unit. It is operating predominantly in the DPO segment. It operated in a single business segment i.e., Outsourced Publishing Services and broadly classified into Information processing (Typesetting) and E-business. The assessee adopted internal TNMM for ALP determination with respect to services rendered to the AE. The TPO found that the internal segment was not comparable and chose external TNMM and hence made an upward adjustment in his TP study. Aggrieved, the assessee filed its objections before the DRP and the DRP disposed its objections giving part relief. Against the order passed by the DCIT in pursuance of the DRP directions, the assessee filed this appeal primarily challenging inclusion of certain comparab....

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....vices. (a) On Extraordinary event, the AR submitted that during the Fy 2009-10, Fortune had merged with other entities and also sold its entire investment in its wholly owned subsidiary 'Fortune Infotech USA, Inc. In this regard , the AR placed reliance in the following cases wherein this company has been rejected on the ground of extra ordinary events: a. M/s. Symphony Marketing Solutions India Pvt. Ltd. (presently merged with Genpact India), (ITA No 1316/Bang/2012) b. Capital IQ Information Systems India Pvt Ltd v DCIT [2013] 32 Taxman.com 21 (Hyd. Trib) (b) On Use of unique software, the AR submitted that this company has developed and owns its unique web based software by which it provides niche services to its customers. Theref....

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....red incorrectly. He submitted that the learned TPO has erred in selecting only 'BPO Operations' as relating to IT enabled services, without appreciating that the company themselves have classified 'Enterprise Solutions' as IT enabled services. Hence, he submitted that for the computation of PLI , the entire IT enabled services as classified in the schedules to profit & loss account should be considered. In this regard , he placed reliance in the case of Amtel R&D India Private Limited vs. DCIT (ITA No. 812/Mad/2015). 4. Further , the AR submitted that the Learned TPO has rejected its comparables viz Caliber Point Business Solutions Limited & R Systems International Limited holding that these companies have adopted different....

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.... law, after affording adequate opportunity to the assessee. The assessee's corresponding grounds are treated as allowed for statistical purposes. 7. With regard to the disallowance made u/s. 14A, the AR submitted that, the DRP erred in confirming the disallowance made by AO at Rs.17,20,802 under section 14A as expenses incurred for earning the exempt dividend income. The assessee has not earned any dividend income during the year from its investments in subsidiary companies namely MPS Technologies Ltd and MPS Content Services INC., USA held during the said assessment year. The AO ought to have appreciated that the assessee had taken a business decision to invest in subsidiary companies and it did not make the investments with a view to ear....