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TMI Blog2015 (12) TMI 1548X X X X Extracts X X X X X X X X Extracts X X X X ..... he Respondent : Smt. Mitali Madhusmita, CIT-DR ORDER PER J.SUDHAKAR. REDDY, ACCOUNTANT MEMBER: This is an appeal filed by the assessee directed against the order of the AO passed u/s 143(3) read with section 144C of the Income Tax Act, 1961 dated 28/01/2015 for the A.Y. 2009-10. 2. The facts in brief are as under. 2.1. The assessee filed its return of income on 30.09.2009 declaring total income of ₹ 2,00,60,075/-. Since the assessee had undertaken international transactions with its associated enterprises, a reference was made by the Assessing Officer (AO) to the Transfer Pricing Officer, New Delhi, under section 92CA(1). 2.2. The brief facts as recorded by theLd.AO are as under; The assessee is a wholly owned Indian subsidiary of International SOS Singapore, being the AE and primarily acts as a support center to International SOS Singapore location. The assessee provides emergency assistance and support services to its members/clients of the AE. SOS India allows AEs members/clients to access its services through the SOS Singapore Alarm Centre. This enables clients of AE to access strong medical network of doctors, hospitals, clinics, and service prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Global Procurement Consultant Ltd. 3. KCCA Business Services Pvt. Ltd. 4. Killick Agencies Marketing Ltd. 5. Oerient Engineering Commercial Co.Ltd. 2.6. Thus, the Ld.TPO, in all, selected 7 comparable (2 from assessee s set and 5 new comparable), whose average margin was 27.63% as against that of assessee at 7.66%. They are; S.No. COMPANY NAME 1. Access India Advisors Ltd 2. IDC (I) Ltd. 3. Apitco Ltd. 4. Global Procurement Consultant Ltd. 5. KCCA Business Services Pvt. Ltd. 6. Killick Agencies Marketing Ltd. 7. Oerient Engineering Commercial Co.Ltd. 2.7. Vide order dated 28.01.2013 the Ld.TPO proposed adjustment of ₹ 3,59,87,126/- and proposed to assess the income of the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee provides professional support services to its AE. He explained the business operation of the assessee, and contended that certain comparables selected by the assessee were wrongly excluded by the TPO. He advanced detailed arguments on each of the comparables. We would be dealing with their aguments in our findings. 6. The ld. CIT(DR) opposed the contentions of the assessee. She argued supporting the comparable company selected by and excluded by the TPO. She relied on the findings of the TPO as well as the DRP. We would be referring to these arguments, as and when it is necessary in our findings. 7. We have heard the rival contentions. On a careful consideration of the facts of the case, perusal of the papers on record, orders of the authorities below and case laws cited the issue that needs to be addressed are; a) Whether the DRP was right in rejecting the companies, selected by the assessee as comparable companies for the purpose of bench marking, being: i) Educational Consultant India Limited; ii) ICRA Management Consulting Services Ltd.; iii) India Tourism Development Corporation Ltd.; b) Whether the DRP was right in upholding the finding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d give 24-hour access to full time security professionals with hands-on experience in crisis management. The security specialists monitor global risks and assist members to reach safe havens where their safety is not threatened. The company specializes in the provision of security consulting, employee protection, and crisis and risk management services. It offers emergency response planning and security evacuation solutions. The clients of SOS Singapore include banks, universities, pharmaceutical companies, and government and non-profit organizations. International SOS Services (India) Private Limited Background SOS India is a wholly owned Indian subsidiary of SOS Singapore. SOS India primarily acts as a support centre to the SOS Singapore location. SOS India provides emergency assistance and support services to members/clients of various Associated enterprises. This enables clients to access its strong medical network to locate doctors, hospitals, clinics, and service providers across India. SOS India has access to a number of globally trained doctors in India enabling them to advise clients on how to manage a medical situation more rationally. Further, SOS India has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis or on different considerations. Respectfully following the proposition laid down by the co-ordinate Bench of the Tribunal in the case of M/s. ThyssenKrupp Industries India Pvt.Ltd(supra), we direct the TPO to exclude this company from the list of comparable companies while computing the ALP. 2. ICRA Management Consulting Services Ltd. 12.1 The ld. Counsel for the assessee submits that this company is engaged in the business of providing management consultancy services and hence should not be taken as a comparable company. Reliance was placed on the following decisions: Loyds TBS Global Services Pvt.Ltd. Vs/ DCIT (ITA no. 5928/Mum/2012) and Temasek Holdings Advisors(I) Pvt.Ltd. Vs. DCIT (ITA no. 4203/Mum/2012) The ld. AR submitted that companies having similar functional profile have been accepted by the Revenue as a comparable. He cited the case of M/s.Access India Advisory Limited.The Ld.DR relied on the orders of the DRP. 12.2 On the issue of functional profile we agree with the submission of the ld.AR. When M/s.Access India Advisors Ltd., having a functional profile of management consultancy, business advisory etc., is agreed as a comparable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exim Bank. He vehemently contended that functionally, this company is not a comparable, as it works with in the field of power, water resources, transportation industry such as economic, textile, mining, cement, leather, health education, environment, InfoTech etc. The pith and substance of the submission are that the areas in which this company provides support services is totally different from the type of support services provided by the assessee. He placed reliance on the decision of the Hon ble Delhi High Court in the case of Rampgreen Solutions Pvt. Limited vs. CIT, ITA No. 102/2015 judgment dated 10/08/2015 for the proposition that functionally dissimilar companies cannot be taken as comparables. He pointed out that decision of the Spl. Bench of the Tribunal in the case of Global India Pvt. Limited has been overruled by the Hon ble Delhi High Court in ITA No. 7466/M/11 judgment dated 07/03/2004. 12.7 The ld. Departmental Representative on the other hand, pointed out that Global Procurement Limited is not a 100% Government of India owned company and that it is being promoted by export import bank of India, as a private sector company in partnership with Leading corporate g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mits that this company is engaged in the business of providing pay roll processing services and hence is not functionally comparable. The sum and substance of his arguments is that this company renders low end BPO services and hence cannot be compared with the assessee company which renders high profile support services. 12.10. HCCA Business Pvt. Limited is engaged in providing payroll processing services to their clients, to manage the internal pay roll operations. The company is a leading service provider in HR operations and administration. In the synopsis filed before us by the assessee. The functions of HCCA Business Pvt. Ltd. has been listed by the assessee as follows: 1) Payroll processing and compensation structuring 2) HR operations and administration 3) Management of labour and allied HR related compliances 4) Reimbursement processing 5) Accounting services 12.11. The claim of the ld. Counsel for the assessee is that this company renders low end BPO services. In our view this is factually incorrect. Thus, as this company is providing professional support services, on the same analogy used while choosing Access India Advisors Ltd., and IDC (I) Ltd. as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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