TaxTMI 
TaxTMI 
2026 (6) TMI 488
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....rnment ownership led to the company receiving any (i) grants (i) subsidies or that it was subject to any pricing controls or any preferential treatment vis-à-vis other privately owned companies? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the exclusion of the functionally comparable company BVG India Ltd holding it to be functionally dissimilar? 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directingthe inclusion of the comparable company Cyber Media Research Ltd, although the said company is engaged in market research & is thus, functionally dissimilar?" 2. The assessee in its cross appeal has raised following grounds of appeal: "On the facts and circumstances of the case, the Ld. AO/ CIT(A) has: 1. erred in law and on facts in assessing the total loss at Rs. 23,85,368 as per computation of income filed by the Assessee against a loss of Rs. 4,35,29,880 without appreciating that inadvertently an amount of Rs. 4,11,44,512 representing reversal of provision of forex loss was offered twice by the Appellant in the computation of income filed ....
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....s Limited selected by the Respondent as a comparable company, to benchmark its international transaction of provision of logistic support services to its AEs, on the basis that the company is not functionally comparable to the Respondent, without appreciating that services provided by the company are in the nature of support services and hence the company is comparable to the Respondent. 4. erred in considering Killick Agencies & Marketing Limited in the final set of comparable companies without appreciating that the said company is functionally dissimilar to the respondent, lacks appropriate segmental information, and is also engaged in trading of products which are not akin to provision of support services. 5. erred in considering AXIS Integrated Systems Limited in the final set of comparable companies without appreciating that the company is functionally dissimilar to the Respondent and is engaged in the business of trading of digital certificate, providing high end technical services which are not akin to provision of support services. 6. erred in considering Marketing Consultants & Agencies Limited in the final set of comparable companies without app....
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....E. The assessee carried out an economic analysis and determined margin of comparable at 7.60%. The assesses margin was within the +/- 5.00% range as per proviso to section 92C(2) and claimed its transactions at arm's length. The assessee selected following comparable and their arithmetic mean margin was (-) 3.20% in the following manner: Sl. No. Name of the company Margin (OP/OC) 1 Cyber Media Research Limited (-) 30.51% 2 EDCIL (India) Ltd. 0.70% 3 In House Productions Limited (-) 1.96% 4 India Tourism Development Corporation Limited (-) 7.25% 5 ICRA Management Consulting Services Limited 7.18% 6 Priya International Limited 12.67% Arithmetic Mean (-) 3.20% 6. The TPO issued show cause notice and proposing to reject all six comparable selected by assessee on the ground that they are not comparable and proposed five (5) new comparable in the following manner: Sl. No. Name of the company Margin (OP/OC) 1 Aptico Limited 24.45% 2 AXIS Integrated Systems Limited 9.03% 3 BVG India Limited 24.21% 4 Killick Agencies & Marketing Limited 10.27% 5 Marketing and ....
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....n inadvertently added back twice to the total income for A.Y. 2012-13. The assessee prayed for necessary direction for assessing officer directing for deleting the above referred amount of Rs. 4.11 crore erroneously tax twice in A.Y. 2012-13. 9. The ld. CIT(A) on considering the additional ground of appal recorded the contention of assessee in para 6.8 of his order. The ld. CIT(A) further noted that assessee was asked to justify additional claim and the break up that amount of Rs. 5.30 crore of forex loss is inclusive of Rs. 4.11 crore and that it was already offered to tax. The ld. CIT(A) recorded that despite allowing opportunity, the assessee failed to furnish documentary evidence to establish factual claim made by assessee with corroborative evidence. The assessee failed to give any satisfactory explanation and evidences; thus, the additional ground of appeal was dismissed. 10. On inclusion / exclusion of various comparables, the ld. CIT(A) on its detailed discussion excluded Aptico Ltd. and BVG India Ltd. And directed to include Cyber Media Research Ltd. In final set of comparables and directed TOP / AO to recompute ALP in accordance with law. While excluding BVG India L....
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....iled revised computation of income based on audited financial statement vide their submission dated 14.12.2015 before assessing officer. The copy of application dated 14.12.2015 filed during the assessment proceeding is also placed on record. In the computation of income, the assessee offered an amount of Rs. 4.11 crore to tax on account of provision of forex loss. In the audited financial statement, the assessee reported an amount of Rs. 10,28,50,184/- as 'foreign exchange loss' in other expenses of which Rs. 4.11 crore was attributed to the aforesaid provision. The provision has been reported under "other liabilities" in the audited financial statement for the year. In A.Y. 2013-14, the books of account of assessee was finalised on 30.10.2015, copy of which is also filed on record. In the audited financial statement, the assessee reported an amount of Rs. 5.30 crore under prior period income. The said amount included an amount of Rs. 4.11 crore towards the reversal of aforesaid provision of forex loss booked in the audited financial statement of F.Y. 2012-13. As the amount pertains to A.Y. 2012-13, the assessment was going on for said assessment year, the assessee added this amou....
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....dance with law. Needless to direct that before passing the order, JAO shall allow fair and reasonable opportunity to the assessee. The assessee is also directed to provide complete details including financial statement for A.Y. 2012-13 as well as 2013-14 to the assessing officer. In the result, ground no. 1 & 2 in assessee's appeal is allowed for statistical purpose. ITA No. 5008/Mum/2025 (A.Y. 2012-13) (Revenue's Appeal) 15. The ld. AR of the assessee submits that he supports the order of ld. CIT(A) for including Cyber Media Research Limited (Cyber Media) and excluding Apitco Limited (Apitco) and BVG India Limited (BVG) from final set of comparables. To support the inclusion of Cyber Media Research Limited, the ld. AR of the assessee submits that Cyber Media is primarily engaged in market research and management consultancy services which is in the nature of support services and comparable with assessee. Financial details of such comparable company are available at page no. 145 of the paper book. As per Director's report, this company is considered as the country's most comprehensive, dependable and respected source of market intelligence. This company passes the related par....
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....ctrification and other contracts for Government and private organizations and hence cannot be considered a comparable. The DRP in assessee's own case for A.Y. 2015-16 and 2020-21 excluded this company from comparable. 18. On the other hand, the ld. Sr. DR for the Revenue supported the order of TPO. Against the inclusion of Cyber Media, the ld. Sr. DR for the Revenue submits that this comparable with assessee as per detailed finding of TPO. A broadly FAR analysis i.e. function performed asset employed and risk assumed is to be considered while considering the comparability of the comparable companies. On Apitco, the ld. Sr. DR submits that Apitco is providing marketing support services which is similar to the activities of the assessee. For BVG, the ld. Sr. DR for the Revenue submits that this company is also engaged in the business support services and comparable with the assessee company as per the detailed finding of TPO. 19. We have considered the submissions of both the parties and have gone through the orders of lower authorities carefully. We find that broadly dispute between the assessee and TPO with regard to inclusion and exclusion of certain comparables. We find tha....