9911796707
TMI Blog2014 (6) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... iled engineering, CAD, 2D SPP & ID administration services, 2D detailed engineering services, PDS/PDMS administration services, 2D drafting services, 3D modelling and training services. For the assessment year under dispute, the assessee filed its return of income on 16-11-2006 declaring total income of Rs.44,22,133/- after claiming exemption u/s 10B of the Act. The return of income was processed u/s 143(1) of the Act. Subsequently, during the scrutiny assessment proceedings, the Assessing Officer noticing that the assessee had entered into international transactions with its associated enterprise (AE) made a reference to the TPO for analysing the arms length price of international transaction. The assessee during the year under consideration reported revenue from international transactions relating to provision for IT enabled services at Rs.5,68,68,285/- and provision for IT enabled Engineering Services at Rs.32,98,567/-. Assessee also received reimbursement of expenses at Rs.15,76,625/- The assessee in the TP study undertaken with and external consultant selected Transaction Net Margin Method (TNMM) as the most appropriate method and profit level indicator (PLI) by the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue is covered by the decision of Income-tax Appellate Tribunal, Hyderabad bench in the assesee's own case in ITA No.1989/Hyd/11 dated 31-10-2013 for assessment year 2007-08. 7. Though the learned DR did not dispute the fact that the issue is covered by the decision of Income-tax Appellate Tribunal in assessee's own case for assessment year 2007-08 but he raised a preliminary objection to the effect that the assessee has not raised this ground before the DRP. 8. In rejoinder to the submissions made by the learned DR, the learned AR contended that the assessee in fact has raised a specific ground with regard to the working capital adjustment before the DRP, but the DRP has not decided that issue. In this context, the learned AR drew our attention to the grounds raised before the DRP which are placed at page 383 of the paper book. 9. We have heard the parties and perused the materials on record as well as the orders of the revenue authorities. So far as the objection of the learned DR that the assessee has not raised this ground before the DRP, we do not find any merit in such contention. On perusal of grounds Nos. 10.1 and 10.2 of ground of objections before the DRP, a copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y further adjustment towards working capital is required, the same may be considered after verification as directed above. If required, the TPO or AO can seek information from the Assessee and decide accordingly." Respectfully following the observations made by the co-ordinate bench (supra), we direct eh Assessing Officer /TPO to determine the ALP in terms with the directions of co-ordinate bench as extracted hereinabove. This ground is considered to be allowed for statistical purposes. 10. In ground No.5, the assessee has objected to selection of certain companies as comparables. Hereinafter, we will deal with each of the company objected to by the assessee. Asit C. Mehta Financial Services Ltd. 11. Objecting to the aforesaid company, the learned AR submitted that not only this company is functionally different but it also fails the RPT filter. The learned AR submitted that the Income-tax Appellate Tribunal, Hyderabad Bench has excluded the aforesaid company from being treated as comparable in assessee's own case for the assessment year 2007-08 in ITA No.1989/Hyd/11 dated 31-10-2013.. 12. The learned DR, on the other hand strongly supporting the orders of Assessing Officer /T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id decision of the co-ordinate bench, we direct the Assessing Officer/TPO not to treat the aforesaid company as comparable to the assessee. VISHAL INFORMATION TECHNOLOGIES LTD:- 14. Objecting to the selection of this company, the learned AR submitted that not only this company cannot be considered to be a comparable to the assessee as it is engaged in high end BPO services and other functions but its employee cost is abnormally low compared to the assessee. It was submitted that the low employee cost indicates that the company is outsourcing its activities to third parties. The learned AR submitted that the co-ordinate bench of the Tribunal has held that the aforesaid company cannot be compared to the assessee while deciding the issue assessee's case for assessment year 2007-08. 15. The learned DR justified the selection of aforesaid company as comparable. 16. We have heard the parties and perused he materials on record as well as orders of the revenue authorities with regard to the aforesaid company. It is a fact that the co-ordinate bench of this Tribunal while deciding the assessee's appeal for the assessment year 2007-08 in ITA No.1989 directed the Assessing Officer /TPO to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elhi Bench in case of CRM Services in ITA No.4068/Del/09 dated 30-6-2011 and the decisions of the Income-tax Appellate Tribunal, Hyderabad Bench in case of Capital IQ Information (ITA No.1961/Hyd/11) and in case of Ivy Comptech Pvt.Ltd. vs. CIT ITA No.1558/Hyd/10 dated 17-1-2014.. In fact, the DRP in assessee's own case for asst. Year 2007-08 has directed exclusion of the aforesaid company by holding as under:- "The assessee strongly objected to the inclusion of M/s Maple E. Solutions Ltd., as a comparable in the year under consideration. It is also pointed out that Triton Corporation acquired 100% equity shares of M/s Maple E-Solutions Ltd. in the year under consideration. When this was pointed out to the TPO he stated that this argument was not raised before him. Further, as per the decision of the Income-tax Appellate Tribunal in the case of CRM Services Delhi Bench, in ITA No.4068(Del)/2009 assessment year 2004-05 dated 30-6-2011 (at page 38 internal order) it was held that Maple E solutions & Triton Corporation should be excluded as comparables as they have been already indicted for money laundering offences. In view of the same, we hold that M/s Maple E Solutions Ltd., shall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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