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TMI Blog2017 (5) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment Year ('AY') 2011-12. 2. The question sought to be urged by the Revenue concerns the validity of the direction issued by the ITAT in the impugned order to the Transfer Pricing Officer ('TPO') to exclude the reimbursement cost while calculating the operating cost for determining the Arm's Length Price ('ALP') of the international transaction involving the Assessee during the AY in question. 3. The Assessee is a wholly-owned subsidiary of CPA Mauritius Ltd. which in turn is a subsidiary of CPA Jersey. It offers a comprehensive range of legal support services to its Associated Enterprises ('AEs') as well as to independent third party customers. During the AY in consideration, the Assessee earned a margin of 36.08% on cost. 4. The As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. It was demonstrated before the ITAT with reference to the agreement between the Assessee and the AE that there were two kinds of reimbursements. One was towards the cost of the service which had a markup and to that extent had been accounted for in working out the ALP in the transfer pricing study; the other was the reimbursement towards the cost of infrastructure on which there was no mark-up. It is this reimbursement towards the cost of infrastructure on which there was no mark-up that was sought to be excluded by the Assessee from the operating costs while working out the ALP. 8. In the impugned order in para 7, the ITAT notes as under:- "7. We have heard the rival submissions and perused the relevant records. As far as the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income Tax-I v. Cushman and Wakefield (India) (P.) Ltd. (2014) 367 ITR 730 (Del) where, in similar circumstances, this Court had agreed with the Revenue and remanded the matter to the TPO for re-determination of the transfer pricing adjustment. 11. This Court has examined carefully the aforementioned decision in Commissioner of Income Tax-I v. Cushman and Wakefield (India) (P.) Ltd. (supra). The Court finds, to begin with, that the said case was an instance of reimbursement by the Indian entity i.e., the Assessee of the costs incurred by the AE whereas the situation in the present case is the converse. Secondly, and more importantly, in the said case there was no categorisation of the reimbursement costs as cost of infrastructure a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea. 15. In the present case, for instance, the ITAT after examining the agreement between the Assessee and its AE has agreed with the Assessee that the reimbursement of the infrastructure cost has no mark-up. Unless there is a specific plea to the effect that the said factual finding is perverse, the Court cannot, at the instance of a general plea of perversity, entertain such a ground of appeal by the Revenue. In other words, such a plea must be made responsibly after studying the entire record of the case and averred with specificity in relation to the facts of the case. Also, it should be accompanied by a reference to the relevant document which formed part of the record of the case before the ITAT. The Revenue has done neither in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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