TaxTMI 
TaxTMI 
2025 (5) TMI 864
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....43(3) rws 144C(13) read with section 1448 of the Act in pursuance of the directions dated 27 June 2022 issued by the Hon'ble Dispute Resolution Panel (hereinafter referred to as Hon'ble DRP), on the following grounds, which are independent of and without prejudice to each other, On the facts and in the circumstances of the case and in law, NFAC based on the directions of Hon'ble DRP, has Ground challenging the non-applicability of APA to international transactions of the Appellant with its AE in UK. 1. erred on the facts, in circumstances of the case and in law by not applying the arm's length rate as agreed in the APA with Arthur J. Gallagher & Co. USA to similar international transactions not covered in the APA and proposing an upward adjustment amounting to INR 2,06,94,009 to the value of international transaction pertaining to provision of business support services to Arthur J. Gallagher Services (UK) Limited, United Kingdom Without prejudice to the above; General ground challenging the transfer pricing adjustment of Rs. 2,06,94,009 2. erred in proposing an upward adjustment amounting to INR 2,06,94,009 to th....
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....ted R Systems International Limited (Segmental) India Tourism Development Corporation Limited (Segmental) Kestone Integrated Marketing Services Private Limited (Segmental) Concept Public Relations India Limited Overseas Manpower Corporation Limited Aristotle Consultancy Private Limited PR Pundit Public Relations Private Limited Inappropriate acceptance of certain additional companies as comparable to the business support services of the Appellant for AY 2018-19 6. erred by concluding that the following companies are comparable to the business support services provided by the Appellant and hence, should be considered while computing the operating margins of comparable companies for arriving at arm's length price Tech Mahindra Business Services Limited Manipal Digital Systems Private Limited CES Limited MPS Limited Integra Software Services Private Limited Access Healthcare Services Private Limited Erroneous comparison of full-fledged risk bearing entities with the Appellant's captive operations without making any risk adjustment 7. erred in comparing full-fled....
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....d in providing business support services to AJG US & UK for which it is remunerated at cost plus 13 percent mark-up. 2.1 The Assessee has selected TNMM as the most appropriate method for deciding the Arm's Length Price of the International Transaction. The Profit Level Indicator selected was operating profit upon operating cost. The TPO in the order has mentioned that the profit level indicator of the Assessee [OP/OC] was 13.3%. The Transfer Pricing Officer rejected the Transfer Pricing Study Report of the Assessee for the reasons discussed in the order. The Transfer Pricing Officer, then arrived at following set of comparables : S.No ITES Comparables Turnover Cr Weighted WCA (OP/OC for Comp Cos) 1 Datamatics Business Solutions Ltd. 71.47 5.65% 2 Integra Software Services Pvt. Ltd. 103.24 13.94% 3 Tech Mahindra Business Services ltd. 703.6 18.04% 4 Manipal Digital Systems Pvt. Ltd. [Merged] 25.01 23.19% 5 C E S Ltd. 74.42 23.29% 6 Access Healthcare Services Pvt. Ltd. 436.58 23.88% 7 M P S Ltd. 18.01 58.48% Place 3 35th Percentile 18.....
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....ehemently submitted that these four companies are comparable to the assessee and hence needs to be deleted. 3.2 Assessee has relied on the following case laws with reference to the specific comparables : "Manipal Digital Systems Private Limited Rage Frameworks India Private Limited vis ACIT (Circle 5), Pune [ITA No.674/PUN/2022] (AY 2018-19) Vodafone Global Services Private Limited vis ACTT Circle 1(1), Pune [TS-221-ITAT-2023(PUN)-TP) (AY 2017-18) Schlumberger India Technology Centre Pvt Ltd v/s DCIT, Pune [ITA No 640/PUN/2021] (AY 2016-17) Credence Resource Management Private Limited v/s ACIT Circle 1 (1), [ITA No. 133/PUN/2021] (AY 2016-17) Veritas Software Technologies India Private Limited vis DCIT TP-2, Pune [ITA No 207/PUN/2021] (AY 2016-17) CES Limited FIS Solutions Software (India) Private Limited [TS-623-ITAT- 2023(PUN)-TP] (AY 2018-19) Vodafone Global Services Private Limited vis ACIT Circle 1(1), Pune [TS-221-ITAT-2023(PUN)-TP] (AY 2017-18) Transperfect Solutions India Pvt Ltd v/s ACIT (Circle 7), [ΓΓΑ Νο 331/PUN/2021] (AY 2016-17) Schlumberg....
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.... • Manipal Digital Systems Private Limited, • CES Limited, • MPS Limited and • Access Healthcare Services Private Limited. 5.2 Accordingly, we will restrict ourselves to adjudicate only with reference to the four comparables mentioned above. We will discuss each comparable separately. Manipal Digital Systems Private Limited : 6. The TPO has considered Manipal Digital Systems Private Limited as comparable. Ld.AR submitted that the Revenue of Manipal Digital Systems Private Limited consist of ITES, Sale of e-Books, Distribution of Books and no segmental is available. We have perused the Page No.984 of the paper book which is the annual report of Manipal Digital Systems Private Limited. It is observed that as per the Note-22.01 of the Annual Report, Manipal Digital Systems Private Limited's sale consist of ITES, Pre-media Work and e-Book/Other Books Distribution. We have studied the Annual Report and we could not get separate figures for ITES, Pre- media work and e-book/other books distribution. Thus, the sales appearing in the Annual Report of Manipal Digital Systems Private Limited consist of ITES and Distribution Activities. Ass....
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....ase, we direct the Transfer Pricing Officer to exclude CES Limited as CES Limited is not comparable to assessee. MPS Limited : 6.3 We have perused the Annual Report of the MPS Ltd. It is observed that the Board of Directors of the Company has approved Amalgamation of ADI BPO Services Ltd with the MPS Ltd.,(Page 24 of the Annual Report).It is observed that its wholly owned subsidiary Mag+AB was dissolved with effect from 21.12.2017 and its Software and Intellectual Properties were transferred to MPS Ltd. 6.3.1 The scan copy of relevant part of page 24 of MPS Limited Annual Report is as under : Mag+AB - Mag+AB, wholly owned foreign subsidiary of the Company was dissolved with effect from December 21, 2017 by transfer of Software and Intellectual Properties registered in its name to MPS Limited. 6.3.2 These are extraordinary events.Forthese two reasons, the FAR of the MPS Ltd, is not comparable with FAR of the assessee. The TPO has erred in not considering the two important events. The Ld.DR has not made any submission regarding these two important events. We find support from the order of ITAT Mumbai in the case of Syngenta Services P. Ltd,Vs.ACIT in ITA No.1905/....