2024 (12) TMI 864

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Tax Appellate Tribunal (Tribunal) dated 18 June 2018 [ITA 437/2019], 8 October 2018 [ITA 1014/2019], 01 January 2019 [ITA 838/2019 and ITA 875/2019], and 04 February 2019 [ITA 866/2019 and ITA 876/2019] and posits the following questions for our consideration: "2.1 Whether the ld. ITAT was right in fact and in law in seeking only distributor companies while searching for comparable companies of the assessee under TNMM whereas the requirement of law and international jurisprudence require' seeking similar comparables companies? 2.2 Whether the ld. ITAT was right in fact and in law in demanding comparability standards that may itself defeat the purpose of law relating to determination of ALP under the Income Tax Act? ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s comparable without giving an opportunity to Revenue to conduct fresh search for other more suitable software and other distributor companies?" 2. The solitary issue which has been canvassed for our consideration is in respect of the exclusion of seven comparables. The Tribunal while holding in favour of the assessee in this respect had taken into consideration its determination in the assessee's own case for Assessment Year (AY) 2007-08 and 2008-09 and where it had held that satellite TV Channels and cable network operators cannot be equated with the activities undertaken by the assessee. 3. The assessee, it becomes pertinent to note, is concerned with the distribution of TV channels. The Tribunal has, in the aforesaid light, observ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sactions for which, not only separate remuneration has been earned for each of the said activities. So far as production activity is concern, the same has been found at arm's length by the TPO and once these are two different segments then there is no justification to mix up the functions of such ancillary activities with that of distribution activity so as to justify selection of such channel/ content owner companies, especially when transaction from such ancillary services constitutes only 4% of the value of the international transaction of the assessee. Apart from that, the assessee is providing these services as a captive service provider for which it is remunerated separately and ALP of such transaction is not in dispute. Accordingly, ....