2018 (4) TMI 2036

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....ax Act, 1961 pursuant to the directions of Ld. Dispute Resolution Panel [DRP]. The effective Grounds of Appeal as raised in the appeal reads as under:- Ground NO.1: Adoption of Entity-Level Benchmarking :- The Learned AO & DRP have erred in law & in facts in rejecting audited Division-wise Profit and Loss statement and adopting Entity-Level benchmarking instead of benchmarking only the International Transactions. Ground No. 2: Rejection of PLI adopted by the Assessee :- The Learned AO & DRP have erred in law & in facts in rejecting the PLI i.e. Operating Profit & Operating Expenses. Ground NO.3: Incorrect Selection of Comparable: - (a) The Learned AO & DRP....

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....oa. 3.2 The international transaction, being consideration received by assessee from its AE against BPO services aggregating to Rs. 27.64 crores, as reported in Form No. 3CEB was referred u/s 92CA(1) for computation of Arm Length Price [ALP] to Ld. Transfer Pricing Officer [TPO] on 16/01/2014. In terms of the agreement with its AE, the said consideration was arrived at on the basis of Seat cost per employee @300GBP, Cost of Salary/incentive of permanent employee with markup of 12% and reimbursement of all direct expenses. 3.3 The assessee in his Transfer Pricing [TP] Study adopted Cost Plus Method [CPM] as the most appropriate method to benchmark the aforesaid international transactions. The Profit Level Indicator [PLI] sele....

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....4. The Ld. Authorized Representative for Assessee [AR] while drawing our attention to the documents placed in the paper-book submitted that Ld. TPO erred in rejecting audited segmental results submitted by the assessee and entity level adjustment was not justified on factual matrix. Our attention is drawn to the fact that complete segmental details were available on record which has completely been ignored by Ld. TPO as well as by Ld. DRP. The orders for succeeding years have also been placed on record to submit that the methodology as adopted by the assessee in the impugned AY has been accepted in succeeding years and therefore, the rejection of the same was not justified. The Ld. AR further submitted that Berry Ratio was well accepted PLI....