TaxTMI 
TaxTMI 
2023 (3) TMI 1620
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.... addition of a new company (i.e. HCCA Business Services Private Limited) as comparable to the Appellant, disregarding the fact that the Functions, Assets and Risk ('FAR') profile of this company is entirely different from that of Appellant's business, thereby violating the provisions of Rule 10B(2) of the Income Tax Rules, 1962 ('the Rules'). 2. On facts and in law, the Ld. TPO and Ld. AO erred in adding, and the Ld. CIT (A) erred in confirming the addition of a new company (i.e. Killick Agencies & Marketing Limited) as comparable to the Appellant, disregarding the fact that the FAR profile of this company is entirely different from that of the Appellant's business, thereby violating the provisions of Rule 10B(2) of the Rules. 3. On facts and in law, the Ld. TPO and Ld. AO erred in rejecting, and Ld. CIT (A) erred in confirming the rejection of a company (i.e. Cyber Media India Online Limited) as comparable to the Appellant, disregarding the fact that the FAR profile of this company is same as that of the Appellant's business, thereby violating the provisions of Rule 10B(2) of the Rules. 4. On facts and in law, the Ld. TPO and Ld. AO erred in rejecting, a....
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....omparability analysis, whereas the Indian law and the international jurisprudence recognise the reality that there cannot be an exact comparable in a given situation without any differences without appreciating that such stringency will defeat the purpose of flexibility provided in comparability analysis for determination of ALP. (iii) Whether the CIT (A) in the facts and circumstances of the case and in law, was justified in not considering the facts presented by the Ld. TPO in its original order New Grounds of appeal [Additional Specific Grounds of Appeal (i) The Ld. CIT (A) has erred in directing to exclude the comparable namely, M/s Mitcon Consultancy Services by holding that functional profile & economic activities of the assessee are very different from this comparable. The Id. CIT (A) has also erred in ignoring that fact that the assessee had admitted that this comparable is broadly engaged in the similar business of technical consultancy and engineering services deriving revenue worth 57% from the consultancy segment. (ii) The Ld. CIT (A) has erred in concluding that the comparable namely. M/s L&T Ramboll Consulting Engineers Ltd. is func....
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....national Transactions which are undertaken by the Assessee during AY 2009-10:- Sr. No. Nature of Transactions Value (in INR) Method Applied UOPIPL margin Comparable companies Margin 1 Provision of technical services 412,089,091 Transactional Net Margin Method ('TNMM') 15.50% 15.93% (+/-5% range lies between 10.13% to 21.72%) 2 Availing of facility and administration services 476,171 3 Availing of technical services 39,132,682 4 Provision of market support services 199,943,991 TNMM 10.47% 9.66% 6. During AY 2009-10, the above transactions were examined by the Transfer Pricing Officer ('TPO') during the Transfer Pricing ('TP') assessment proceedings. The TPO, in his TP order, confirmed that the pricing of the Appellant's various international transactions meets the arm's length standard except for certain international transaction. The TPO made the following adjustment: Nature of Transactions TP adjustment (in INR) Provision of engineering, technical & inspection ('ET&I') services 150,430,504 Provision of market support services 23,392,078 Total TP adjustment 173,822,582 ....
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....d power generation, decentralized power generation projects, energy and carbon consultancy service, etc. Having read the above, the Appellant submits that these services are different from what the Appellant is engaged into. ■ Only 57% of the entire revenue of the company is earned from consultancy income is considered, while the Company earns approximately 43% of the revenues from income from vocational training programme, IT training, income from laboratories and other income. ❖ Non-availabilitv of Segmental accounts *The segmental accounts of this company are not available in public domain, which makes it difficult to analyse or select a particular segment of this company, if found comparable to the Appellant' s business activities - as the company's entire operations cannot be considered comparable to that of the Appellant. - Delhi High Court judgment in case of case WSP Consultant s India Pvt Ltd (ITA 935/2017) held that Mitcon Consultancy & Engineering Services Ltd. is deriving less than 75% revenue from consultancy services a reasonable basis for its exclusion. In view of the judgment of the Hon'ble Jurisdictional High Court the same is directed t....
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....sses, and systems. EDS involved with mechanical engineering skills and the services offering extends from early stages of idea generation, through engineering design and analysis, virtual stimulation, documentation and conversion, prototyping and testing, knowledge- based engineering and PLM solutions. As per the annual report, the sales & other income as shown in the profit and loss accounts includes the value of sales reversal of Rs. 80,313,553 towards ongoing pilots conducted at the behest of one of Company's major offshore customer. Therefore, these sales reversals are arising in normal course of business and should not be considered as nonoperating. On examination of the functional we hold that this is not a right comparable owing to functional dissimilarity. The tribunal cannot ignore the functional dissimilarity and consider it as a right comparable. 12. Provision of Market Support Services ⮚ The market support services provided by the Appellant to its overseas AE include the activities undertaken by the Appellant to promote the use of: - UOP equipment by petroleum refineries, petrochemical facilities; - UOP Processes; and ....
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....ct/service lines of the Company are defined as relation & fulfilment income, management consulting and advertisement income. {Refer pages 230 to 232 of paperbook for relevant extract of CIT (A) submission and 1356& 1360 for annual report) ■ Delhi ITAT in case of Genzyme India Pvt Ltd [TS-339-ITAT- 2018(DEL)-TP1 for AY 2009-10 held that the company is engaged) in providing advertising and marketing services (including event management, relationship and fulfilment management) in various forms of media to its clients and thereby, also directly promotes the brand by incurring expenses. We accordingly direct the TPO to include this company in the list of comparables. This company is involved in advertising and marketing services, event management, relationship management, hence cannot be considered as right comparable in the instant case. 2 Times Innovative Media Limited The company is making persistent losses. Therefore, it will not be a good comparable. (Refer page 108 of paperbook for relevant extract of TPO order) This company has been excluded by TPO on the ground that it is a company making persistent losses so, it is not functionally comparable....
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....It's a December ending company. So, it will not be used as a comparable. (Refer page 107 of paperbook for relevant extract of TPO order) The TPO has excluded this comparable on the ground that it has a different financial year ending, i.e. its financial year ends on 31st December. On all other counts this company is a suitable comparable and has been selected by the appellant in its own TP study. If quarterly accounts are available, Ld. AO/Ld. TPO is directed to take accounts for the 12th month period i.e. 01.04.2008 to 31.03.2009 for Indiacom Ltd. and include it in the final list of comparables. (Refer page 42 of paper book for relevant extract of CIT (A) order) Functionally similarity Broadly functional comparable company ■ Unacceptable filtration criterion. (Refer pages 232 to 234 of paperbook for relevant extract of CIT (A) submission and 1425, 1431 & 1433 for annual report) Accented in AY 2008-09 The Company has been accepted by the Ld. TPO during the TP assessment proceedings of the earlier years i.e. AY 2008-09. Delhi High Court decision in case of CIT vs. Mckinsey Knowledge Centre India Pvt. Ltd. [TS- 672- HC- 2015(DEL)- TP] held that....