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TMI Blog2019 (5) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... eived from provision of services; (ii) Rejection of Comparable Uncontrolled Price [CUP] method applied by the assessee as the Most Appropriate Method [MAM] for bench marking the international transactions pertaining to provision of consultancy services, thereby applying Transactional Net Margin Method [TNMM] as the MAM. (iii) Alternatively, the assessee pleads that the Assessing Officer erred in inappropriately allocating the costs between AEs vis a vis non AEs by taking such subsidy as a part of turnover pertaining to transaction with AEs and allocating the entire costs on the basis of that turnover. (iv) In the alternative, the assessee pleads that the TPO/ Assessing Officer erred in not providing search process used for selectin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious core services as undertaken by Watson Wyatt Group of Companies, which are post-retirement benefits, actuarial valuation etc. Watson Wyatt India renders these services to both - Associated Entities and Unrelated Parties. Services were rendered to Associated Entities in order to service certain client projects overseas. 6. The assessee has also received services from its AE for projects in India or other assistance provided by its AE. Services are rendered by Associated Entities for India in order to service certain projects in India. The appellant is a loss making company since its inception and has got accumulated losses of Rs. 20,19,72,132/- upto 31/03/2009. It was facing financial constraints and like in the past, it has been fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to maintain the strategic presence of WW Global Network. It is the say of the ld. DR that clause 1.1 clearly mentions, "each subsidiary shall provide the WW Global Network all or any of the services outlined in Schedule 1 to the agreement. 10. We find that the Schedule 1 to the agreement which is at page 315 of the paper book lists out the services which the subsidiaries are bound to provide for receiving the service charges and reads as under: " The subsidiary agrees to provide all or some of the following services to the WW Global Network: 1. Maintenance and provision of highly skilled and experienced Associates to work on multi-national projects and proposals for any member of the WW Global Network in an advisory and consultanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idy which is directly related to services provided by it to its AEs. In our considered opinion, this service agreement income of Rs. 7,70,23,981/-, is part of provision of consulting services rendered by the assessee and, therefore, we do not find any error in clubbing service agreement income with provision of consulting services of Rs. 2,45,64,401/-. This ground is accordingly dismissed. 13. Next grievance relates to application of MAM. 14. The assessee has applied CUP as MAM for bench marking provision of consulting services. 15. The assessee has bench marked this transaction under CUP. The bench marking is based upon invoice billed by the appellant towards consultancy services rendered. The appellant company has compared the invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that even as per the Associate Consulting Agreement, which governs sharing of work between all AEs, it has been clearly mentioned that the price to be charged to the AEs should be same as charged to the unrelated parties. Therefore, CUP is MAM and not TNMM applied by the TPO. 18. The ld. DR stated that for using CUP method to benchmark international transactions, strict similarity of services rendered to AE and Unrelated Enterprise (URE) must be established by the assessee on the basis of reliable evidences. The assessee has failed to establish such strict similarity of functions. The ld. DR further stated that there is no scope of services rendered/work done for AEs. The ld. DR further stated that no details or description of services a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing service to both the AEs and non AEs is irrelevant, so as long as the evidences of services provided are available. The services are provided by different set of personnel, having different qualification and it would not be justifiable to ask for invoices of the same person who has provided service to AEs and also to non AEs. 21. Moreover, considering the nature of services provided by the assessee, we do not find the geographical locations relevant because the consulting services provided by the assessee would remain the same whether the service receiver is located in 'X' country or 'Y' country as long as service provider is in India. Our view is fortified by the fact that the price charged to non AEs, [irrespective of geograph ..... X X X X Extracts X X X X X X X X Extracts X X X X
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