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TMI Blog2015 (5) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... carried out by the TPO and we direct the TPO to exclude the margins of Agrima Consultants International Limited while benchmarking the arm's length price of international transactions of the assessee and applying the margins of other comparables as selected by DRP, determine the arm's length price of international transactions of assessee. Another objection raised by the assessee was against the selection of Rolta India Limited, while benchmarking the international transaction with respect to design engineering services provided by the assessee to its AEs. The learned Authorized Representative for the assessee pointed out that the margins of Rolta India Limited could not be applied as it had different year end as against the assessee’s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach other 1. General Grounds 1.1 The lower authorities have erred in law and in facts in taking BPLR of 10% instead of 14% for computing working capital adjustment in both the functions. 1.2 The TPO, AO DRP erred in law and on facts in not granting benefit of proviso to section 92C (2) of the ITA, 1961 though specifically requested during the course of hearing. 2. For Auxiliary Marketing Support Services :- The learned DRP have erred in law and on facts in determining the Arm's Length Price (ALP) of the appellant's International transactions for Auxiliary Marketing Support services at ₹ 3,04,00,495/- (instead of ₹ 2,84,80,828) by adopting a operating margin of 16.58% instead of the appellant's o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the value of international transactions entered into by the assessee with its associate enterprises, in view of the margins shown by the assessee being not comparables with the margins of the said comparables selected by the Assessing Officer. The learned Authorized Representative for the assessee further pointed out that in case the comparables selected by the TPO are excluded, then assessee s margins would be comparables to the margins of the comparables and there is no need to adjudicate the issue raised against working capital adjustment to be allowed in the hands of assessee and in the hands of comparables. 5. The learned Departmental Representative for the Revenue placed reliance on the orders of authorities below. 6. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s length price after giving working capital adjustment. Consequently, the addition of ₹ 19,19,667/- was made with respect to the international transactions relating to providing marketing support services to AEs and ₹ 10,57,818/- with respect to the international transaction relating to providing of design engineering segment to the AEs. 7. The TPO while benchmarking the market support services segment had selected the following set of comparables:- a. Priya International Limited (Indenting Segment) b. Agrima Consultants International Limited 8. The DRP however, had picked up the set of comparables as picked up in the earlier years and also comparables picked up by the TPO which are as under:- a. Empire Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative for the Revenue referred to the orders of authorities below and pointed out that Agrima Consultants International Limited was broadly comparable to the functions undertaken by the assessee. 12. On the perusal of the record and information furnished by the assessee, Agrima Consultants International Limited was formed in 1972 and engaged in area such as sugar, cement, chemical engineering, power transmission, etc, which services are offered to clients in developing countries. Further, Agrima Consultants International Limited is providing consultancy services to leading financial institutions in and outside India. On the other hand, the assessee was providing marketing support services to various group entities and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arables concerned does not correspond to the financial year of the year, the same was un-comparable. We find merit in the plea of the assessee as even the provisions of Rule 10B(4) of the Income-tax Rules, 1962 provided that the data to be used in analyzing the comparability of an un-controlled transactions with an international transaction, shall be the data relating to the financial year, in which the international transaction had been entered into. In the present case, the data adopted by Rolta India Limited does not relate to the financial year, in which the international transaction has been carried on by the assessee and hence, the said concern is to be excluded from the list of comparables. Similar view has been taken by Pune Bench o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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