9911796707
TMI Blog2017 (11) TMI 1756X X X X Extracts X X X X X X X X Extracts X X X X ..... g directions:- "16.... Consequently, the following directions are issued: (i) the impugned order of the ITAT dated 24th August 2016 is modified by directing the following issues will not be remanded to the TPO but will be decided by the ITAT itself on merits after hearing both the parties. (a) issue concerning exclusion of WAPCOS and Mahindra and inclusion of Kirloskar as comparables for the TSS segment b) issue regarding exclusion of Sasken as comparable for the CDS segment c) issue of denial of working capital and risk adjustment in both the segments, i.e., TSS and CDS; and d) issue of proportionate adjustment in the TSS segment (ii) The appeal of the assessee ITA No. 6856/Del/2015 before the ITAT is restored to its file. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Service Revenue 389,604,691 6. Provision of contract software development 7,274,905,626 7. Payment for deputed employees 112,961,710 8. Reimbursement of expenses (Received) 44,455,170 9. Reimbursement of Expenses (Paid) 9,782,132 10. Interest on Loan 5,379,000 During the relevant assessment year, the assessee had entered into the following international transactions with its AEs - Particulars Most Profit Level Indicator (PLI) Margin earned by the Appellant No. of comparables considered Average margin CSD services Transactional Net Margin Method Operating Profit/Total Cost (OP/TC) 77.7.71%.71% 13 12.18% 7.68% 4 7.28% During the course of Transfer Pricing assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in B & C category are not pressed by the assessee as the DRP has given said relief. As related to issue related to A & D the assessee is agitating the same and therefore, the same are taken for hearing. 4. On the ground relating to the issue of Transfer Pricing adjustments made in respect of Technical Support Services (TSS) Segment, it was the submission of the Ld. AR that under this segment the assessee provided technical support service with respect to telecom equipment sold to customers in India. These services primarily include repairs and maintenance services, after sales support services, installation and commissioning services, trouble report handling services, etc. The Ld. AR submitted that the assessee primarily functioned as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rces, Power and Infrastructure and includes preliminary investigations, feasibility studies, field studies, engineering design, drawings and tendering process, project management operations and maintenance and institutional/human resource development. The Ld. AR also submitted WAPCOS is a Government of India undertaking with an abnormally high margin of 30.55%. The Ld. AR submitted that WAPCOS has been rejected as comparable in the following cases- Nortel Networks India Pvt. Ltd. vs. ACIT (ITA No. 4765/Del/2011 & 427/Del/2012), MCI Com India Pvt. Ltd. (Now Known as Verizon India P. Ltd.) (ITA No. 4187/Del/2010), Yum! Restaurants (India) Ltd. vs. ITO (ITA No. 6168/Del/2012), Actis Advisers P. Ltd. vs. ACIT (ITA No. 6390/Del/2012), Shell Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Rampgreen Solutions P. Ltd. in ITA No. 102/2015, wherein the Hon'ble Delhi High Court held that functionally different company cannot be considered as comparable company. 8. The Ld. DR submitted that for Kirloskar the TPO has not verified the RPT margin whether 25% or not. For exclusion of WAPSCO, the Ld. DR submitted that technical and consultation services run parallel to each other and it is the margin which has to be looked into and not the profit to be only deciding factor for choosing comparable. For Mahindra Consultancy, the Ld. DR relied upon the order of the TPO and DRP. 9. As relates to working capital adjustment ground, the Ld. AR submitted that the TPO should have verified the same which was not done. The Ld. DR submits ..... X X X X Extracts X X X X X X X X Extracts X X X X
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