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TMI Blog2017 (11) TMI 1756X X X X Extracts X X X X X X X X Extracts X X X X ..... r Consultants Limited, this company was earlier taken up as comparable in A.Y. 2010-11 which is immediately preceding year. The Revenue cannot take a different stand in one year and another in very next year without any proper reason assigned to the same. The RPT threshold of below 25% is applicable in the present comparable. Therefore, the TPO should have included this comparable. For working capital the order of the DRP is non speaking and the submissions of the Ld. AR are accepted. As relates to point (d) of the Hon’ble High Court directions, the same has to be taken into proportionate adjustment. Appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... Other Telecommunication Equipment and also provides related services. The assessee also provides Contract Software Development (CSD) Services and Technical Support Services (TSS) to its Associated Enterprises (AEs). Vide High Court order issued in November, 2008 Alcatel Lucent Technologies India Private Limited (formerly Lucent Technologies India Private Limited), Lucent Technologies Hindustan Private Limited and Alcatel Development India Private Limited were marged with ALIL. The merger was effective with retrospective effect from April 1, 2007. The international transactions entered into, by the assessee are tabulated below. The table also provides the transfer pricing approach of the assessee followed by the assessee in benchmarking its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain companies selected by the assessee and included certain additional companies. The TPO also rejected the assessee's claim for working capital and risk adjustment. In respect of CSD Services the TP adjustment proposed by the TPO amounted to ₹ 1,28,51,47,579/- . The TPO included 14 companies in the CSD Services Segment which are as per the following chart: S.No. Company Name OP/TC 1. Acropetal Technologies Limited (IT Segment) 36.69% 2. Akshay Software Technologies Limited 0.16% 3. E-Infochips Limited 56.44% 4. Infosys Limited 43.53% 5. Larsen & Toubro Infotech Limited 18.40% 6. Mindtree Limited (Segment) 10.74% 7. Persistent Systems and Solutions Ltd. (Merged) 22.12% 8. Persistent Systems Ltd. 23.08% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... segment) 10.87 3 Wapcos Limited 30.55 4 Mahindra Consulting Engineers Limited 22.79 Average 19.49% 5. The Ld. AR submitted that in respect of Kirloskar Consultants Limited which was selected by the assessee as a comparable in the TSS segment was incorrectly rejected by the TPO on the ground that it failed the RPT filter of 25%. The Ld. AR submitted that the total RPT by sales ratio is only 11.79% which is below the RPT threshold of 25% and hence, this comparable ought to be included. The Ld. AR further submitted that Kirloskar was selected as comparable by the DRP in AY 2010-11. 6. The Ld. AR also raised the objections to two comparable which were selected by the TPO but are not being accepted by the assessee. The Ld. AR submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of Rampgreen Solutions P. Ltd. In ITA No. 102/2015, wherein the Hon'ble Delhi High Court has held that functionally different company cannot be considered as comparable company. 7. As relates to Mahindra Consulting Engineers Limited, the Ld. AR submitted that the TPO held that under the application of TNMM as the most appropriate method, the difference in functional profile gets evened out and as such the company can be considered as a comparable. He further submitted that his company is engaged in the provision of technical consultancy in Multi Disciplinary Projects which includes designing, engineering, procurement, construction, monitoring and supervision, infrastructure consulting services and integrated project management s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties and perused the Hon'ble High Court directions dated 08.05.2017 along with records placed before us by both the parties. Firstly we take up the issue of exclusion of the comparables that of WAPSCO and Mahindra Consulting Engineers Ltd. As set out by the Ld. AR and after going through the records, it's clear that both these companies are functionally different. The Hon'ble Delhi High Court in case of Rampgreen (supra)has set out the ratio that functionally different comparables cannot be taken by the Revenue authorities or by the assessee for TP study. Therefore, these two comparables have to be excluded. Secondly about the inclusion of Kirloskar Consultants Limited, this company was earlier taken up as comparable in A.Y. 2010-11 which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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