TaxTMI 
TaxTMI 
2019 (10) TMI 1598
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....solution Panel (hereinafter 'DRP') in F.No. 54/DRP-2/BANG/2017-18 dated 20.09.2018. 2. M/s. CMA CGM Shared Service Centre, the assessee, is a subsidiary of M/s. CMA CGM SA, France (its AE) provides shared services to its AE. Towards this service, the assessee company has received Rs. 64,81,42,222/- during the period relevant to the assessment year 2014-15. In order to benchmark this transaction, the assessee company adopted TNMM as the most appropriate method. It has shortlisted 10 comparable companies, 3 years weighted average cost, working capital adjusted for the comparable companies is 7.78%, as against the assessee's PLI of 12.04%. Accordingly, the assessee claimed that its transactions are at arm's length. However, the TPO rejec....
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....nt asset base i.e., Infosys BPO's fixed asset is INR 217 Crores as against assessee's fixed asset of INR 16.56 Crores and hence he pleaded that Infosys should be excluded from comparable list. In support of his claim, the ld.AR relied on the following judicial judgments:- * BNP Paribas Global Securities (I.T.A. No. 2141/ CHNY/2017) * M/s. Cameron Manufacturing India Pvt. Ltd. Vs DCIT, Chennai [ITA No. 336/Chny/2018]and invited our attention to the following portion:- "5. Ground No. 2.1: M/s. Infosys BPO Limited as the comparable company: The Ld.AR submitted before us that the export turnover of M/s. Infosys BPO Limited is quite high which is approx. Rs. 1356 crores while as the export turnover of the assessee com....
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....at the nature of services of M/s Microland is that it engaged in ITeS and Infrastructure management. Infrastructure management services of Microland include cloud computing solutions, application management services, tool-based disaster recovery environment management services. So, it is functionally different and hence not comparable. Inviting our attention to the paper book page no 367, wherein the financials are placed particularly the Segmentation in financial statements and submitted that the financial statements has provided for segmental accounts bifurcating ITES (comparable service) and Infrastructure management services (non-comparable services). Therefore, it was pleaded that ITES segment should be considered as comparable to the ....
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....ice income filter, therefore , M/s Informed Technologies India Ltd., should be included in the comparable set. The ld.AR also relied on the decision of the Hyderabad Bench of this Tribunal in the case of M/s. TNS India Pvt. Ltd., in ITA No. 1875/Hyd/2012 dated 17.04.2015. The relevant portion of the order is extracted below: 17. Informed Technologies Ltd.: Ld. AR submitted, the only reason for which the TPO considered this company as uncomparable is because the revenue earned by the company is only 66.45% thereby it fails more than 75% ITES revenue filter applied by TPO. Ld. AR submitted, the TPO has arrived at the BPO ITES service revenue at 66.45% by treating the rental income as operational revenue. However, the entire export reve....
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....ecord TPO finds that this company satisfies all the filters applied by him, then, he may consider this company as a comparable. 4.3.1 Per contra, the ld DR supported the orders of the lower authorities. 4.3.2 We heard the rival submissions and gone through relevant material. We find merit in the assessee's above submission. Following the above decision, we deem it appropriate to restore the issue of comparability of this company to the AO/TPO for considering afresh after due opportunity of being heard to assessee, on the same lines, supra. 4.4 On the issue of working capital adjustment, the ld.AR submitted that Rule 10B(2)(d) and Rule 10B(3) of the Rules provide that if the comparability gets materially affected due to differences in co....
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....inion that the capital employed on the assessee, including working capital, is one of the relevant factors for the purpose of determining the arm's length price. Therefore, the capital employed by the assessee, including the working capital, and that of comparable companies needs to be taken into consideration. Without comparing the working capital employed by the comparable companies and that of the assessee, this Tribunal is of the considered opinion that there cannot be any transfer pricing adjustment. 4.4.1 Per contra, the ld.DR supported the orders of the lower authorities. 4.4.2 We heard the rival submissions and gone through relevant material. We find merit in the assessee's above submission. Following the above decision, we are o....