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TMI Blog2015 (10) TMI 2425X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1961 (in short 'the Act') dt.15.4.2012 in pursuance of the directions of the Dispute Resolution Panel ( DRP ) issued under Section 144C(5) rws 144C(8) of the Act dt.18.4.2012. The relevant Assessment Year is 2008-09. 2. The facts of the case, briefly, are as under :- 2.1 The assessee company, a subsidiary of FMC Agricultural Product International AG Switzerland, is engaged in the business of manufacture and processing of pesticides by importing the same from its Associated Enterprises ( AE ). In addition, the assessee is also engaged in trading and providing research and development services to its AEs. For Assessment Year 2008-09, the assessee filed its return of income on 30.09.2008 declaring income of ₹ 5,83,62,730. The return was processed under Section 143(1) of the Act and the case was taken up for scrutiny. 2.2 The Assessing Officer observed that the assessee had entered into international transactions in excess of ₹ 15 Crores and therefore with the approval of the CIT-I, Bangalore made a reference to the Transfer Pricing Officer ( TPO ) to determine the arms length price ( ALP ) thereof, as per the provisions of section 92CA of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,74,069 to the ALP of international transactions entered into by the assessee in the period relevant to Assessment Year 2008-09. The Assessing Officer determined the income of the assessee at ₹ 5,97,36,798 which included the T.P. Adjustment of ₹ 13,74,069 under Section 92CA of the Act vide draft assessment order passed under Section 143(3) of the Act dt.7.12.2011. 2.3 Aggrieved by the draft order of assessment for Assessment Year 2008-09 dt.7.12.2011, the assessee filed its objections thereto before the DRP, Bangalore. The DRP issued its directions under Section 144C(5) rws 144C(8) of the Act vide order dt.18.4.2012 rejecting the objections raised by the assessee. The Assessing Officer in pursuance thereof passed the final order of assessment under Section 143(3) rws 144C of the Act vide impugned order dt.15.6.2012 wherein the income of the assessee was determined at ₹ 5,97,36,798; which included the T.P. Adjustment of ₹ 13,74,069. 3. Aggrieved by the final order of assessment for Assessment Year 2008-09 dt.15.6.2012, the assessee has preferred this appeal raising the following grounds :- A GROUNDS RELATING TO TRANSFER PRICING LEGAL ISSUES ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Appellate Tribunal to decide the appeal according to law. 4. At the outset, the learned Authorised Representative for the assessee submitted that the assessee is only pressing for exclusion of the following two companies from the TPO s list of comparables. (i) Oilfield Instrumentation India Ltd. and (ii) Celestial Labs Ltd. It was submitted that except for pressing ground of appeal at No.9 for exclusion of the above two companies from the list of comparables all other grounds i.e. at S.Nos.1 to 8 and 10 to 13 are not being pressed in this appeal before us. In this view of the matter, the grounds of appeal at S.Nos.1 to 8 and 10 to 13 not being pressed are rendered infructuous and are accordingly dismissed. 5. Oil Field Instrumentation India Ltd. ( Oil Field ) 5.1 This company was chosen as a comparable by the TPO and its inclusion was upheld by the DRP inspite of the objections raised by the assessee to its inclusion/retention in the list of comparable companies. Before us, the learned Authorised Representative submitted that as per the material in the public domain i.e. in its web site, this company i.e. Oil Field is engaged in the supply of equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mum/2011 and co-ordinate benches of this Tribunal in the case of Apotex Research Pvt. Ltd. in ITA No.918/Bang/2011 and Millipore India Pt. ltd., in IT(TP)A No.689/Bang/2011 after considering the functional profile of this company i.e. Oil Field Instrumentation India Ltd. held that this company cannot be a comparable to companies who are R D service providers. The co-ordinate bench of this Tribunal in the assessee's own case for Assessment Year 2007-08, in its order in IT(TP)A No.431/Bang/2012 after considering the above referred decisions of the ITAT, Mumbai Bench in Tevapharma Pvt. Ltd. (supra) and of the co-ordinate benches of this Tribunal in the case of Apotex Research Pvt. Ltd. and Millipore India Pvt. Ltd. (supra) has held as under at para 5.2.4 to 5.2.6 of order while excluding this company i.e. Oil Field :- 5.2.4 The learned CIT(A) has rejected the aforesaid three companies from the list of comparables based on functional differences vis-a-vis the assessee also relying on the decision of the ITAT, Mumbai Bench in the case of Tevapharm India Pvt. Ltd. in ITA No.6623/Mum/2011 for Assessment Year 2007-08 wherein these three companies were rejected as comparables in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the averments and prayer for admission and adjudication of the additional ground raised by the assessee, seeking the exclusion of Celestial Biolabs Ltd. from the list of comparables, In the interest of justice and equity and also since all the necessary facts for adjudicating this ground are already a part of the record, we are of the view that this additional ground raised by the assessee is to be admitted for adjudication. 6.3 According to the assessee from the details in the public domain, Celestial Labs Ltd. is a diversified company apart from software development services operating in diverse field such as rendering IT Services, ITES encompassing application, development and maintenance, production support, data warehousing, SAP implementation, bio-informatics, research in pharmaceutical products and is also into manufacturing and trading of products such as Cel Sanjeevani Products, SAP Services. It is contended by the learned Authorised Representative that in view of the above facts which establish that Celestial Labs Ltd. is functionally dis-similar and different from the assessee in the case on hand it ought to be rejected as a comparable to the assessee comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected as comparables in respect of an R D Service Provider. Before us, no material evidence has been brought on record by revenue to justify the inclusion of these three companies in the list of comparables. 5.2.5 We also find that co-ordinate benches of this Tribunal in the cases of Apotex Research Pvt. Ltd. V DCIT in ITA No.918/Bang/2011 dt.23.11.2012 for Assessment Year 2007-08 and in Millipore India Pvt. Ltd. in IT(TP)A No.689/Bang/2012 dt.4.7.2014 for Assessment Year 2007-08, after considering the functional profile of M/s. Oil Field Instrumentation India Ltd. and M/s. Celestial Bio Labs Ltd. held that these two companies cannot be treated as comparables for an R D Service Provider. 5.2.6 In this view of the matter, following the findings in the decision of the Tribunal Benches in the cases of Tevapharm India Pvt. Ltd. (supra), Apotex Research Pvt. Ltd. (supra) and Millipore India Pvt. Ltd. (supra), we hold that these three companies viz. Oil Field Instrumentation India Ltd., Celestial Bio Labs, Ltd., and Agile Electric Technologies Pvt. Ltd. are functionally different from the assessee in the case on hand and therefore cannot be treated as comparables. We are, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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