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TMI Blog2018 (9) TMI 1320X X X X Extracts X X X X X X X X Extracts X X X X ..... issing and absent. The surveys undertaken by MRUC were on behalf of members of MRUC, consisting of advertisers, publishers, advertising agencies and broadcast and other media, totaling 249 in number. In a way, the MRUC was rendering services and working for its members. The MRUC was also outsourcing most of its activities to a third party research agency. The working pattern and model adopted by MRUC was unlike a commercial organization and completely different. The dissimilarities are too striking and apparent to be ignored. The Transfer Pricing Officer had also contradicted himself as recorded in paragraph 19 of the impugned order. Tribunal, in our opinion, was justified in excluding the MRUC from the list of comparables. - ITA 966/2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... UC) in the light of the contentions raised by the ld. AR for the taxpayer as well as ld. DR for the Revenue. 12. The ld. AR for the taxpayer challenged the inclusion of MRUC as a comparable for benchmarking the international transaction qua market support service segment on grounds of functional dissimilarity; that MRUC is a not-for-profit organisation; that MRUC outsources most of its activities to third party; that MRUC does not qualify the filter applied by the TPO qua Related Party Transaction (RPT) and relied upon the decision of M/s. Linked in Technology in ITA No.706/Del/2016. 13. However, on the other hand, ld. DR for the Revenue to repel the arguments addressed by the ld. AR for the taxpayer contended that when the functi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be compared with MRUC because of functional dissimilarity as no risk is assumed by the MRUC being a not-for-profit organisation and only serves the interest of its members and assets employed are only from the membership fee as well as subscription fee collected from its 249 members. 16. Furthermore, benefits/profits of the MRUC are not divided between the members, it being a not-for-profit organisation. So, the MRUC does not qualify the parameters lay down under Rule 10B (2) of the Rules, necessary for comparability analysis. Even otherwise, surplus of MRUC are neither distributed among the members nor are offered for income-tax purposes. 17. Furthermore under section 10B(1)(e) under Transactional Net Margin Method (TNMM), ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res also. 20. Even otherwise, the major transactions of MRUC is Related Party Transactions as its substantive income is generated from membership fees and subscription fees for IRS/IOS reports and as such, price cannot be considered as independent controlled price as the major revenue is earned from its 249 members. Suitability of MRUC as a comparable has come up before the coordinate Bench of the Tribunal in Linked in Technology (supra) and has been ordered to be excluded for the reason discussed in the preceding paras. 21. In view of what has been discussed above, we are of the considered view that MRUC is not a suitable comparable vis- -vis the taxpayer for benchmarking the international transactions qua market support services ..... X X X X Extracts X X X X X X X X Extracts X X X X
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