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TMI Blog2019 (8) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... "the Act") for the assessment years 2008-09 and 2010-11, in pursuance to the directions of learned Dispute Resolution Penal (DRP)-II, Mumbai. 2. The cross objections have been filed by the assessee with delay of 277 days. The assessee has filed applications supported by affidavits seeking condonation of delay. Shri Farookh Irani, learned Counsel for the assessee submitted, though the DRP has held that the assessee comes within the purview of Knowledge Process Outsourcing (KPO) Company. However, since due to the relief granted by the DRP on other issues, assessee's margin came within the acceptable range of the margin of the comparables requiring no further adjustment, assessee was advised not to file any appeal or cross objection initiall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he held that the assessee is providing KPO services. In the course of proceedings before him, the Transfer Pricing Officer found that while benchmarking KPO services provided to the AE, the assessee has applied Transactional Net Margin Method (TNMM) with Operating Profit to Total Cost (OP/TC) as the Profit Level Indicator (PLI). Further, the assessee had selected eight companies as comparables in transfer pricing study report with arithmetic mean of 21.33%. Since the assessee has shown PLI of 25.87%, the transaction with AE was claimed to be at arm's length. The Transfer Pricing Officer, however, rejected the benchmarking of the assessee and proceeded to compute the arm's length price of the transaction with the AE independently. Tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying upon the observations of learned DRP submitted, Coral Hubs Ltd., cannot be treated as a comparable, as it does not provides service itself, but it does so by outsourcing which is evident from low personnel cost. Thus, he submitted, the business model of the company being completely different from the assessee, it cannot be treated as a comparable. He submitted, for the very same reason, the Tribunal as well as the High Court in various cases have excluded this company as a comparable. In this context, he relied upon the following decisions:- i) Cummins Turbo Technologies Ltd. v/s DDIT, [2015] 53 taxmann.com 492 (Pn.); ii) CIT v/s Cummins Turbo Technologies Ltd., ITA no.1095/2015, dated 28.02.2018 (Bom.); and iii) PCIT v/s Aptara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have considered rival submissions and perused the material on record. We have also applied our mind to the decisions relied upon. Insofar as Coral Hubs Ltd. is concerned, it is seen from the materials available on record that the personnel cost as a ratio of the total cost works out to 4.40% as against assessee's personnel cost of 36.37%. The aforesaid fact clearly demonstrates that unlike the assessee, this company is not providing services itself, but has employed third party vendors to do the work. Thus, the business model of the company is totally different from the assessee. Considering the aforesaid aspect, the Tribunal in Cummins Turbo Technologies Ltd. (supra) has excluded this company as a comparable. The aforesaid decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd demerger, there is a definite impact on the profitability of the company, which is reflected in the super normal profit earned by it. Looking at the aforesaid factual position, the Tribunal in Goldman Sachs Services Pvt. Ltd. (supra) and Transcent M.T. Services Pvt. Ltd. (supra), has excluded this company as a comparable. As these decisions of the Tribunal are for the very same assessment year and there being no material difference in fact, respectfully following the aforesaid decisions of the Tribunal, we uphold the decision of learned DRP in excluding the Mold Tech Technologies Ltd. as a comparable. Grounds raised are dismissed. 16. In the result, Revenue's appeal is dismissed. C.O. no.64/Mum./2016 - By Assessee (Arising out of Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the assessee submitted, learned DRP relying upon its own decision in assessment year 2008-09 has excluded the above three companies and has not decided various other grounds raised by the assessee under a misconception that upon exclusion of these three companies, the margin shown by the assessee would come within the range of +/-5% of the margin of rest of the comparables. He submitted, the aforesaid finding of learned DRP is factually incorrect, as even after exclusion of these three companies, assessee's margin would not come within +/-5% of the margin of the rest of the comparables. Therefore, the other grounds left undecided by learned DRP requires adjudication. Further, he submitted, the Revenue has also filed a Misc. App ..... X X X X Extracts X X X X X X X X Extracts X X X X
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