2023 (9) TMI 1206

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....e said additions were confirmed by Ld CIT(A). Hence the assessee is aggrieved. 3. We shall first take up the addition relating to transfer pricing adjustment made in Marketing services. The assessee was remunerated at Cost plus 15% margin by its AE for the above said services. Hence Operating Profit/Total cost was 15% for the assessee. The assessee selected TNM method as most appropriate method. The TPO noticed that the assessee has used multiple year date and computed weighted average mean of margins of comparable companies selected by the assessee. The TPO did not accept the same. He adopted current year data of the comparable companies, whose arithmetical mean worked out to 65.33% as detailed below:- Sr.No. Name of the company Updated PLI for F.Y. 2006-07(%) 1 Birla Global Asset Finance Co. Ltd. 369% 2 IDC (India) Limited 15% 3 ING Vyasia Financial Services Ltd. 47% 4 ICRA Online Ltd. (Segmental) -95% 5 CRISIL Limited** 52% 6 Wall Street Finance Limited 4%   Arithmetical mean 65.33 Accordingly, the TPO made adjustment of Rs. 38.71 crores in this segment, which was also confirmed by Ld CIT(A). 4. The Ld A.R submitted that though the assessee has so....

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.... submission on the error in computation of margin need not be adjudicated, since the company itself is directed to be excluded. The assessee also sought exclusion of M/s CRISIL Ltd and M/s ING Vysya Financial Services Ltd on account of high RPT. However, it was stated earlier that the exclusion of M/s Birla Global Finance Co Ltd would make its transactions at arms length. Hence we do not find it necessary to adjudicate upon above said two companies. 8. We shall now take up the transfer pricing adjustment made in respect of Backend processing support services. The TPO selected following 31 comparable companies:- Sr.No. Name of the Company Margins 1 Ace Software Exports Ltd -6.79 2 Ask Me Info Hubs Ltd. 5.67% 3 Cosmic Global Lid. 11.75% 4 Maple E Solutions Ltd. 34.32% 5 Transworks Information Services Ltd. (Aditya Biria Monies Worldwide Lid.) 12.44% 6 Triton Corp. Ltd. 32.36% 7 Galaxy Commercial Ltd. 14.36% 8 CMC Ltd (Seg) 31.92% 9 Datamatics Softworid Pvt. Ltd (Seg) 3.14% 10 National Securities depositaries (Seg) 29.17% 11 Accentia Technologies Limited 38.26 12 Allsec Technologies Limited 27.31 13 Apex Knowledge Solutions Limited 12.83 14 ....

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....cluded this company in the assessee's own case in AY 2010-11. Further, the Tribunal has excluded this company in the assessee's own case in AY 2006-07 (ITA No.690/Mum/2016) and in AY 2008-09 (ITA No.6877/Mum/2012). The Ld A.R also relied upon the decision rendered by the Tribunal in the case of Stream International Services (ITA No.8290/Mum/2011 dated 10th October, 2014 ) in AY 2007- 08. Thus, we notice that this company has been held as not a good comparable in various years in the assessee's own case and in the hands of other assessee's also. Accordingly, we direct exclusion of this company. (ii) Mold-Tek Technologies Ltd:- The assessee submitted that this company is a KPO company and hence it is functionally different. Further, during the year under consideration, it has demerged its Plastics division into a separate listed entity, which is an extra ordinary event. The Tribunal has excluded this company in AY 2008-09 (ITA No.6877/Mum/2012) in the assessee's own case. The TPO himself has excluded this company in the assessee's own case in AY 2006-07. The Ld A.R also relied upon the decision rendered by the Tribunal in the case of Stream International Services (ITA No.8290/Mum....

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....ctivities. Further, this company has had 9 acquisition arrangements during this year. The Ld A.R also relied upon the decision rendered by the Tribunal in the case of Stream International Services (ITA No.8290/Mum/2011 dated 10th October, 2014 ) in AY 2007-08. Thus, we notice that this company has been held as not a good comparable in various years in the assessee's own case and in the hands of other assessee's also. Accordingly, we direct exclusion of this company. (x) HCL Comnet Sys & Ser Ltd:- The assessee submitted that this company is a unlisted company and it follows different accounting year, i.e., it ends its accounts on 30th June and not on 31st March. The Ld A.R submitted that the companies following different accounting year was excluded by the Tribunal in the case of American Express (India) P Ltd (ITA No.1674/Del/2015 dated 7th June 2017) relating to AY 2007-08. The Ld A.R also submitted that the Hon'ble Bombay High Court has also excluded this company in the case of CIT vs. PTC Software (I) Pvt Ltd (2017)(395 ITR 176)(Bom). Accordingly, we direct exclusion of this company." 13. The company M/s I services India P Ltd was excluded by the coordinate bench in the cas....