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TMI Blog2019 (1) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... anel (DRP). 2. Altogether, the assessee has raised 16 grounds. Grounds no.1 to 12, are in relation to issues relating to transfer pricing (TP) adjustment. Whereas, grounds no.13 to 16, are in relation to corporate / other issues. 3. Insofar as grounds relating to TP adjustment are concerned, though, the assessee has raised a number of issues contesting the addition made on account of TP adjustment, however, at the time of hearing of appeal before us, Shri Porus Kaka, learned Sr. Counsel, appearing for the assessee restricted his arguments only to selection / rejection of certain comparables. In view of the aforesaid, we are only required to decide the acceptability or otherwise of certain comparables as disputed before us. 4. Brief facts relating to this issue are, the assessee an Indian Company is a wholly owned subsidiary of Maersk GSC Holdings A/S (Denmark), which in turn, is a downstream subsidiary of A.P. Moller Maersk A/S (APMM), a company incorporated in Denmark. As stated by the Transfer Pricing Officer, the assessee is a captive service provider and is engaged in providing back office support services and information technology (I.T) support services to its overse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o select comparables independently by applying certain additional filters. In this context the Transfer Pricing Officer also called upon the assessee to explain why certain comparables selected by him in assessment year 2011 12 should not be selected as comparable in the impugned assessment year. Though, the assessee objected to the selection process undertaken by the Transfer Pricing Officer, however, rejecting the objections of the assessee the Transfer Pricing Officer short listed three companies as the final set of comparables for bench marking the arm's length price of the international transactions with the A.E. The final set of comparables with their arithmetic mean as selected by the Transfer Pricing Officer are as under: Sr. no. Name of Comparable NCP Margin (%) 1. E4e Healthcare Business Services Pvt. Ltd. 14.59 2. Infosys BPO Ltd. 33.92 3. Acropetal Technologies Ltd. (Healthcare segment) 29.78 Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case for assessment years 2010 11 and 2011 12, the Tribunal has rejected this company as comparable. The learned Sr. Counsel submitted, only because the Transfer Pricing Officer has selected this company as a comparable in assessment year 2011 12, it has been included in the impugned assessment year as well. The learned Sr. Counsel submitted, the Tribunal in assessee s own case for past assessment year having held this company to be not comparable to the assessee it should be excluded from the list of comparables. 9. Shri Jayant Kumar, the learned Departmental Representative, submitted, the DRP after carefully analysing the functionality of the assessee as well as Infosys BPO Ltd. having found it to be functionally similar has upheld its selection. He submitted, only because of the size or turnover of the company, it cannot be said that it is not a comparable if otherwise it is functionally similar to the assessee. 10. We have considered rival submissions and perused materials on record. From the material on record, it is evident that the assessee is not only a captive service provider, but the nature of service provided by the assessee can be categorized as simple BPO serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selected this company as a comparable in assessment year 2011 12 and following the same, it has been included as comparable in the impugned assessment year. The learned Sr. Counsel submitted, while considering the comparability of the aforesaid company in assessee s own case for assessment year 2011 12, the Tribunal has restored the issue to the Assessing Officer / Transfer Pricing Officer for fresh adjudication. He submitted, in case of Agilis Information Technologies India Pvt. Ltd. v/s ACIT, [2018] 89 taxmann.com 440 (Del.), the Tribunal has rejected this company from being treated as a comparable to a BPO service provider since it is engaged in diversified activities including development of products. 13. The learned Departmental Representative justified selection of this company as a comparable by submitting that the Transfer Pricing Officer has considered only the BPO segment for comparability analysis. 14. We have considered rival submissions and perused materials on record. As could be seen from the facts on record, the assessee has challenged the selection of this company as a comparable primarily on the ground that the company is into diversified activities includin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be treated as a consistent loss making company. Further, he submitted, the DRP has taken contradictory stand while upholding the rejection of this company. He submitted, while applying the filter of consistent loss making company, the DRP has considered the financial results for the accounting period ending in December, whereas, the DRP has rejected this company as a comparable for having a different financial year ending. The learned Sr. Counsel submitted, while deciding Revenue s appeal against selection of the aforesaid company in assessment year 2011 12, the Tribunal has upheld the decision of the DRP in accepting this company as a comparable. Thus, he submitted, the company should be treated as a comparable in the impugned assessment year also. 17. The learned Departmental Representative justifying exclusion of this company submitted, since the comparable has a different accounting period than the assessee, it cannot be treated as a comparable. He submitted, at no stage it has been examined whether nine months data available of the company can be extrapolated to the subsequent three months for deriving the margin of the company. As regards the issue whether the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing the consistent view of the Tribunal, we hold that the company cannot be rejected as a comparable merely because it has accounting period ending in December. As regards the observations of the DRP that it is a consistent loss making company, the learned Sr. Counsel has submitted before us that the company has shown profit for the period ending on December 2009 as well as assessment year 2013 14. Therefore, it does not come in the category of consistent loss making company. Since, the aforesaid aspect requires factual verification, we are inclined to restore the issue to the Assessing Officer for the limited purpose of verifying whether the company has incurred loss consistently for the past three years and decide the issue accordingly after due opportunity of being heard to the assessee. iv) CALIBER POINT SOLUTION LTD. 20. This comparable was proposed by the assessee. However, the Transfer Pricing Officer rejected it on the ground that the accounting period of the company ends in December, whereas, assessee s accounting period ends in March. 21. The DRP has also upheld the rejection of the company as a comparable for the very same reason. 22. We have conside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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