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TMI Blog2016 (3) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that the issue is covered in favour of the assessee, and, no interference in the well reasoned findings of the CIT(A) is thus called for. It is not even in dispute that CG Vak Software has made profits in the subsequent year, and that is the reason the DRP has held it to be includible in the list of comparables. We approve the stand of the DRP on this point, and decline to interfere in the matter. We, however, make it clear that our aforesaid decision for this year shall act to the prejudice of the assessee to raise other grievances on the comparables, which are, according to the assessee, wrongly included in the final list of comparables, or the comparables, which have not been included in the final list of comparables but which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another. 1. In making an upward adjustment of ₹ 3,46,97,005/- to the international transaction for provision of information technology enabled services (ITeS) by the Appellant on the following grounds: a. Rejecting the functional analysis, search process adopted and documentation maintained by the Appellant for the international transaction of provision of ITeS to associated enterprises (AEs) b. Including additional companies which are not comparable to the Appellant, inter-alia due to functional incomparability, different business model, turnover, foreign exchange earnings, super normal profits, exceptional/abnormal year of operations. c. Rejecting comparable co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is engaged in the business of providing information technology enabled services to its AEs. During the course of proceedings before the TPO, it was noticed that the assessee has benchmarked its income from services rendered to the AEs, on the basis of transactional net margin method (TNMM) with operating profit divided by operating cost (OP/OC) as the profit level indicator (PLI). While the assessee s PLI was 16.25%, whereas, as per the TPP study, the arithmetic mean of the PLI of its comparables was 16.22%. However, the TPO noted that the margins taken by the assessee are not updated ones, that (a)Allsec Technologies Limied, (b)CG-VAK Software Exports Ltd and (c)R Systems International Ltd are required to be excluded as a and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ather than doing it on his own, and that there are now number of decisions by the coordinate benches holding that Vishal is not a good comparable because of its own peculiarities. He, however, hastened to add that the fact that he has given up the matter on other issues, and this fact should not be held against him in other proceedings. As for the revenue s appeal, he submitted it is a squarely covered matter by coordinate bench decisions. 5. Learned Departmental Representative did justify the stand of the authorities below ad submitted that each comparable has its own peculiarities, and that is the reason averaging is done for the comparables so as to minimize the impact of these peculiarities, and that there is no good rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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