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TMI Blog2016 (2) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals filed by the department and the assessee are against the final assessment order passed u/s. 143(3) r.w.s 144C of the Act in pursuance to the directions of Dispute Resolution Panel (DRP), Mumbai. At first, we will deal with the departments appeal in ITA 22/M/15. Only substantive ground raised by the department is as under:- 1. Whether on the facts and in the circumstances of the case and in law, the Hon'ble Dispute Resolution Panel erred in rejecting the comparable viz. Asian Business Exhibition and Conferences Limited which was adopted by the TPO for computation of Arms Length Pricing when the comparable's functioning was very much similar to activities undertaken by the assessee company . 2. As could be seen from the ground raised, the only issue raised by the department is in relation to exclusion of Asian Business Exhibition and Conferences Limited as a comparable by the DRP. 3. Briefly, the facts are, the assessee an Indian company is engaged in the business of providing marketing support and business support services and software development services in relation to re-insurance, underwriting and actuarial activities to its associated enterprises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t satisfied with the same for the reason that the assessee had selected comparable companies by taking multiple year data and segmental accounts provided were not audited. He also observed, software development and I.T. support services segment is only 4% of the total turnover of the assessee. He, therefore, called upon the assessee to explain as to why it should not be considered as predominantly marketing and business support services company. Though, the assessee submitted its explanation objecting to the inferences drawn by the TPO, but, TPO did not accept the explanation of the assessee citing the following reasons: a) The assessee has not provided audited segmental results for the two activities namely software development services and business support services. b) The assessee has earned revenue from Providing Business Support Services to AEs to the tune of ₹ 16,17,50,508/- whereas the revenue earned form the activity of Software Development and IT support services is to the tune of ₹ 67,36,584/-. Thus the predominant revenue is from providing Business Support Services to AEs being 96% of the revenue. 6. Thus, on the aforesaid basis TPO aggregated both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fees charged from visitors for visiting exhibition. The DRP also observed, the company has earned super-normal profit during the year which cannot be ignored. The DRP further observed segmental reporting of the company is not available. The DRP observed merely because the company was considered in the T.P. Study, it has to be included as a comparable. Accordingly, DRP directed the assessing officer to remove Asian Business Exhibition and Conferences Limited from the list of comparables. Since, DRP found that after removal of Asian Business Exhibition and Conferences Limited assessee s margin comes within +/- 5% of other comparables it did not decide assessee s objections in respect of other comparables. Further, the DRP also directed the assessing officer to retain the two segments reported by the assessee and work out the adjustment after removal of Asian Business Exhibition and Conferences Limited. Being aggrieved, the department is before us. 8. The learned departmental representative submitted before us, assessee in its TP study considered this company as a comparable, hence, it cannot again take the plea of excluding the same from being treated as a comparable. Referring to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll India Markets Pvt. Ltd. V/s. The ACIT in ITA 193/M/13 dated 10.12.2014. 11. We have considered the submission of the parties and perused the relevant material on record. On perusal of the order passed by the TPO it is noticed that the TPO while dealing with assessee s objection with regard to selection of Asian Business Exhibition and Conferences Limited as a comparable has admitted that the nature of function performed by this company is event management. It is further relevant to observe, on perusal of annual report of this company it is seen that as per directors report, the main operation is organizing exhibition and events. Further, schedule 12 of the profit and loss account as well as notes to the accounts reveals, revenue earned by the company is from sponsorship, delegates attending conferences, events and entry fees charged from visitors for visiting exhibition, sale of stall place etc. 12. Thus, on overall analysis of facts and materials placed on record it is very much clear that the business model of the assessee and Asian Business Exhibition and Conferences Limited are totally different. While assessee undoubtedly is providing support services to its overseas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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