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TMI Blog2018 (1) TMI 1547X X X X Extracts X X X X X X X X Extracts X X X X ..... is a valid comparable and HSCC is not a good comparable for benchmarking the IT. s, entered into by the assessee, for the year under consideration. If ASL is considered as a valid comparable, the assessee will fall within the safe zone of (+/ -)5% of the arithmetic mean. So, we hold that there was no justification in making the upward adjustment for the IT. s of the assessee. We decide effective ground of appeal, in favour of the assessee. - I.T.A. 1500/Mum/2016, I.T.A. 1053/Mum/2017, C.O No.59/Mum/2016 (Arising out of I.T.A. 1500/Mum/2016), SA. No. 330/Mum/2017 (Arising out of I.T.A. 1053/Mum/2017) - - - Dated:- 3-1-2018 - S/Sh. Rajendra, Accountant Member AND Ravish Sood, Judicial Member For the Appellant : Shri Saurabh Deshpande - DR For the Respondent : Shri Madhur Agrawal Order u/s. 254(1) of the Income-tax Act, 1961 (Act) PER RAJENDRA, AM- Challenging the order, dated 20.01.2016, of the Assessing Officer (AO) passed in pursuance of the directions of the Dispute Resolution Panel (DRP), Mumbai, the assessee has filed the present appeal. It has also filed a cross objection (CO). The AO has challenged the direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the financials of the comparables for the year under consideration if same were available. The assessee submitted the same and the average OP/TC worked out (6. 71%), as under: S. No Name of the Comparable Company PLI as per TPSR Updated PLI (%) 1. Arcadia Shipping Ltd. 10.74% 13.42% 2. Central Investigation Security Services Ltd. 2.35% 4.51% 3. Knight Watch Security Ltd. 5.31% 4.70% 4. Orient Express Ship Mgmt. Ltd. 5.05% NA 5. Tops Security Ltd. 6. 35% 2. 71% 6. Security Intelligence Services (I) 7.84% 8.76 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of ₹ 5,77,75, 402/- to the total income of the assessee. 3. Before the DRP, the assessee made elaborate submissions. After considering the available material, the DRP held that the TPO had given detailed reason for rejection of comparables selected by the assessee, that he had given proper opportunity to the assessee to offer its comments on the comparable selected by him, that the objections of the TPO were mainly on the selection of final set of comparables for which he had given detailed reasons. With regard to Arcadia Shipping Ltd (ASL), the DRP held that it was providing services including shipping agency, liner-operations, ship-broking, ship-chartering, Project-cargo/coastal-cargo-movements, Off -shore activities in oil and gas sector, chartering of ships like barges/vessels, transportation of offshore structures, that the TPO had rejected the comparable holding that services rendered by ASL were not comparable to the services rendered by the assessee, that ASL was into the services same as of the assessee, that only the fields of services differ, that same could not vitiate the comparability, that all the services were similar and were rendered for fees, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 25/05/2012 Rampgreen Solutions P. Ltd. (377 ITR 533). 5. We have heard the rival submissions and produce the material before us. We find that the assessee had selected final set of six comparables to determine ALP of the IT. s entered into it during the year under consideration, that the AO had rejected all the comparables selected by the assessee, that he held that HSCC was valid comparable to benchmark the transactions, that the DRP held that one of the comparables selected by the assessee, i.e. ASL, was a valid comparable, that the TPO was justified in holding that HSCC was a good comparable. 5. 1. We find that the issue of inclusion/exclusion of two comparables i. e. ASL and HSCC is key to resolve the dispute before us. First. we will take the matter of ASL. We find that the DRP had held that overall functions of ASL were similar to the activities carried out by the assessee, that some of the activities of comparable were different. We are of the opinion that TP proceedings especially selection of valid comparables-are not meant to put the proverbial fly in place of a fly (makshika-sthane-makshika). What has to be seen is that goods purchased/sold to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n our opinion the overall performance of both the companies are same. Therefore, we are of the opinion that there is no need to interfere with the order of the DRP, as far as inclusion of ASL comparable is concerned. Upholding the order of the DRP, we hold that ASL is a valid comparable. 6. We find that HSCC is rendering comprehensive range of high-end professional consultancy services in the areas of healthcare in India as well as abroad. The assessee is involved in various services under the heads payroll arrangements, pension, insurance for the crew. It is true that it also recruits engineers. But, if we compare functionality of both the entities, it becomes clear that they are not in the similar areas of activities. HSCC is earning consultancy fee, as per financials of the company. 70% of the total fee is received by it, on placement of supply order. Balance 30% of total fee is received by HSCC on receipt of supply/installation of equipments. It is also a fact that it is the government of India enterprises and provides services including conceptual studies and management consultancy, project-management, logistics and installations, procurement and purchases, healthcar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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