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TMI Blog2017 (7) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... in law, the order passed by the Ld. Assessing Officer ( Ld. AO ) under section 143(3) read with section 144C of the Act is bad in law. 2. That the reference made by the Ld AO suffers from jurisdictional error as the Ld AO has not recorded any reasons in the draft assessment order based on which he reached the conclusion that it was 'necessary or expedient' to refer the matter to the Additional Director of Income Tax, Transfer Pricing Officer-II(1), New Delhi ('Ld TPO') for computation of the Arm's Length Price ('ALP'), as is required under section 92CA(1) of the Income Tax Act, 1961 ('the Act'). 3. That on the facts and in circumstances of the case and in law, the Ld. AO erred in assessing the returned income of the appellant of ₹ 1,14,47,127 at ₹ 1,28,46,321 on the directions of Learned Dispute Resolution Panel ( Ld. DRP ) under section 144Cof the Act. 4. That on the facts and in the circumstances of the case and in law, the Ld. DRP erred in directing the Ld. AO to determine the arm's length mark up for the Market Support Service segment after including certain comparables ( IDC India Limited and Empire Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng ('TP') documentation maintained by it in terms of section 10D of the Act read with Rule 10D of the Income-tax Rules, 1962 ('Rules') as well as fresh search; 6.8. disregarding multiple year/ prior years' data as used by the appellant in the TP documentation and holding that current year (i.e. FY 2006-07) data for comparable companies should be used despite the fact that the same was not necessarily available to the appellant at the time of preparing its TP documentation That the above grounds of appeal are independent and without prejudice to each other. That the appellant reserves its right to add, alter, amend or withdraw any ground of appeal either before oral the time of hearing of this appeal. 3. The facts of the case in brief are that the assessee filed the return of income on 29.10.2007. Subsequently, the revised return was filed on 04.03.2009 declaring total income at ₹ 1,14,47,127/-. In the revised return the assessee offered prior period income and also claimed expenses on account of trade claim and prior period expense. The case was selected for scrutiny. The assessee is a branch office of the Philip Morris Services In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference to para 2.5 at page nos. 14 to 16 of the order dated 26.08.2016 and stated that the ITAT in the preceding year has directed to include the comparable M/s Agrima Consultants International Ltd. and to exclude the comparable M/s IDC India Ltd. and M/s Empire Industries Ltd. It was contented that since the facts for the year under consideration and the preceding year are similar, therefore, by following the earlier order dated 26.08.2016 of this Bench of the ITAT for the preceding year in assessee s own case, the same course to be adopted. It was stated that if the aforesaid company i.e. M/s Agrima Consultants International Ltd. is included and another two companies i.e. M/s IDC India Ltd. and M/s Empire Industries Ltd. are excluded the average margin of the comparables will be within 5% range and no adjustment is required to be made on account of arm s length price. 6. In his rival submissions the ld. DR although supported the order of the DRP/AO but could not controvert the aforesaid contention of the ld. Counsel for the assessee. 7. We have considered the submissions of both the parties and carefully gone through the material available on the record. It is noticed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is comparable has been selected by Ld. TPO which has been objected by the assessee. Ld. A.R. submitted that this company is functionally not similar with that of the assessee. He submitted that the activities performed by this company is more of the knowledge process and requires extremely skilled personnel for the same. The company is also into research and survey activities including a very high level management consultancy. The assessee has placed reliance upon the decision of Hon'ble Delhi High Court in the case of Rampgreen Solutions Pvt. Ltd. Vs CIT in I.T.A. No. 102/2015 wherein the Hon'ble Court has held that where the tested party is not a KPO service provider, an entity rendering KPO services cannot be considered as a comparable for the purpose of TP analysis. He also placed reliance upon the decision of this Tribunal in the case of Microsoft Corporation India Pvt. Ltd. VS DCIT in I.T.A. No. 5766/Del/2011 wherein this company has been characterized as an information technology, research and advisory firm. Further, it has been held that his company earns its income in the form of research and survey. 5.1 We have perused the above details placed in the Paper B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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