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TMI Blog2018 (6) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... rdance with law. These grounds are, accordingly are restored to the file of the Ld. AO for the purpose of verification and passing orders a fresh. Benchmarking of 'Provision Of Market Support Services' (MSS) - Comparable selection - Held that:- As a matter of fact even for the assessment year 2008-09 Ld. DRP recorded that for preceding years also it was held that the services rendered by the assessee were not high-end ones, as such Ld. DRP accepted the view taken for the earlier years and held for the assessment year 2008-09 that the services rendered by the assessee was not of high-end. It is not the case of the revenue that such a finding of fact was disturbed by any appellate authority. Such a finding of fact has attained finality - company M/s. Basiz Fund Services Private Limited is functionally dissimilar to the assessee inasmuch as such a company is involved in the fund accounting services, possessing significant intangible assets, the different employees profile, very significant growth in the revenue at 57.61% and earning of profits at 46.75% at supernormal level.company M/s. Basiz Fund Services Private Limited is functionally dissimilar to the assessee inasmuch as such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding high-end market support services to its parent AE. Finally Ld. TPO selected a set of Nine comparables, and while rejecting the request of the assessee for working capital adjustment, made an adjustment of ₹ 51.75 crores. 4. Ld. DRP, by order dated 31/12/2013, referred to their own order for the assessment year 2008-09, directed the exclusion of M/s. Basiz Fund Services Private Limited from the final set of comparable companies and gave relief on certain corporate tax grounds. 5. Challenging the direction of DRP to exclude M/s. Basiz Fund Services Private Limited from final set of comparable companies, Revenue filed ITA 1206/Del/2014. By filing CO No 375/Del/2014, MCIPL is seeking consideration of Transfer Pricing study as final and valid for all purposes and exclusion of four companies - Apitco, Global procurement consultants, Killick agencies and Orient engineering from final set of comparable companies and inclusion of some comparable companies like Inmacs, Access India, EDCIL, Inhouse production, ITDC (seg) etc., MCIPL also for grant of working capital adjustment, whereas by way of ITA 2529/Del/2014, MCIPL is requesting for deletion of ad hoc disallowance mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue does not dispute the same. When the facts continue to be similar, we do not find any reason to take a different view. We, therefore, respectfully following the consistent view taken by the tribunal for the assessment years 2006-07 to 2008-09 answer the issue in favour of the assessee and a direct the Ld. AO to delete the addition made on account of disallowance of car running and maintenance expenses. 10. Now coming to grounds No. 4 and 5, it is submitted by the Ld. AR that in the financial year 2007-08, the assessee company has been booking year-end provisions in its profit and loss account and out of such provisions the statutory auditors of the company had reversed half the amount being excess in nature at the time of finalisation of the books of accounts and claimed only the remaining half as deduction in the return of income. However, subsequently in the financial year 2008-09 the entire amount of provision was automatically reversed in the accounting system of the company as a normal industry practice instead of reversing the amount that was debited to the profit and loss account in financial year 2007-08, resulting in an additional amount being offered to tax in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and applied it only to one comparable. According to the Ld. DR the independent TP Auditor as well as the Ld. TPO selected the comparables from the entire list of companies providing marketing services keeping in view the broad functional comparability under TNMM, the above approach of the TP Auditor was never objected by the assessee and an identical approach was adopted by the Ld. TPO as such now the assessee cannot insist on strict functional comparability to object only those comparables where margin is high. 16. Further according to the Ld. DR it is a well settled proposition of law that assessee cannot approbate and reprobate. If strict functional comparability is adopted for selection of comparables then the matter needs to be restored to the Ld. TPO so as to stick to functional comparability of all comparables, including the comparables not objected by the assessee like Cyber Media Research, which is engaged in event management activities and ICRA Management Consulting, engaged in providing consultancy services in strategy, risk management, operations management, regulatory economics and transaction advisory can be tested. 17. He placed reliance on the decision report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted the PLI of 14 comparables on the basis of multiple data at 8.91%. Ld. TPO has not rejected the transfer pricing study, but proceeded to modify the economic analysis in connection with international transaction of MSS, by adopting the TNNM as the Most Appropriate Method. 21. A reading of the brief profile of overseas parent and MCIPL, as could be found at pages 775 and 776 of the paper book, the detailed analysis carried out in connection with this international transaction of MSS as has been incorporated at page 790 onwards, summary of financial statements can be found at page 890 and FAR from page 792 onwards of the paper book, and the audited financial statements of MCIPL as can be referred to at page 625 of paper book - justifies the finding of the Ld. DRP that the company M/s. Basiz Fund Services Private Limited is functionally dissimilar to the assessee inasmuch as such a company is involved in the fund accounting services, possessing significant intangible assets, the different employees profile, very significant growth in the revenue at 57.61% and earning of profits at 46.75% at supernormal level. Basing on these factors, Ld. DRP recorded a finding that the possessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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