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TMI Blog2017 (12) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to set aside the impugned order dated 15.03.2017, passed by the AO in consonance with the orders passed by the ld. CIT (A)/TPO under section 250 / 143 (3) read with section 144C of the Income-tax Act, 1961 (for short the Act ) qua the assessment year 2011-12 on the grounds inter alia that :- 1 On facts, circumstances of the case and in law, the Learned Commissioner of Income - Tax ( Appeals ) - 19, New Delhi [ herein referred to as Ld . CIT ( A ) ] erred in confirming an addition of INR 15,503,946 to the taxable income of the Appellant on account of determination of arm's length price of the international transaction u / s 92CA ( 3 ) of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egulatory environment in India and coordinating in respect of logistic services. 3. During the year under assessment, the taxpayer entered into international transactions with its Associated Enterprise (AE) to the following effect :- Sl . No . Name of the international transaction Amount ( INR ) 1 Provision of support services 171,249,543 2 Purchase of fixed assets 2,683,783 3 Reimbursement of expenses paid 2,030,640 4 Reimbursement of expenses received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl . No . Company Name OP / OC 1 Quadrant Communication Ltd. 14.58 2 Concept Communication Ltd. 4.73 3 Info Edge (India) Ltd. 45.53 4 Media Research Users Council 40.53 Average 26.34 and proposed TP adjustment u/s 92CA at ₹ 2,54,52,714/-. 10. However, ld. CIT (A) after considering the contentions raised by the taxpayer ordered to exclude Info Edge (India) Ltd. from the final set of comparable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r contended that when the functional profile of a company is similar to the taxpayer, it cannot be excluded for benchmarking international transaction merely because of the fact that it is a not-for-profit organisation. 14. Undisputedly, major source of revenue of MRUC is the income from its members in the shape of membership fee and subscription fee for Indian Readership Survey (IRS) and Indian Outdoor Survey (IOS) reports. When we refer to relevant page 374 of the annual report of MRUC, available in the paper book, it is referred as a not-for-profit organisation representing four different stakeholders in Media Research covering media sellers and buyers, operative portion thereof is extracted for ready reference as under:- Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 10B(1)(e) under Transactional Net Margin Method (TNMM), net profit margin established by the TP analysis is taken into account to arrive at the arm s length price qua international transactions. In case of MRUC being a not-forprofit organisation, profit making is not the motive rather it is operating in media research covering media sellers and buyers for some specific motive of the company. So, a not-for-profit organisation cannot be compared with the taxpayer which is a company established for making profit. 18. Furthermore it is event from page 386 of the annual report of MRUC, available in the paper book, that MRUC paid expenses to the tune of ₹ 9,27,95,904/- (in the earlier year RS.8,19,52,193/-) to the third party rese ..... X X X X Extracts X X X X X X X X Extracts X X X X
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