9911796707
TMI Blog2018 (10) TMI 1812X X X X Extracts X X X X X X X X Extracts X X X X ..... r The Respondent : Shri A. Sreenivasa Rao, Senior DR. ORDER PER SUCHITRA KAMBLE, JM :- This cross-objection is filed by the assessee against the order dated 8th January, 2015 passed by the Income Tax Officer, Ward-10(1), New Delhi under Section 143(3) read with Section 144C of the Income-tax Act, 1961 for assessment year 2010-11. 2. During the year under consideration, the assessee company was engaged in the business of providing marketing support services to its group affiliates and particularly GECAS Services Limited, Ireland. The assessee had undertaken following international transactions with its Associated Enterprises (AE) :- S. No. International transactions Value in transactions 1 Market support and administrative services rendered ₹ 4,57,43,014/- 3. The international transactions entered into by the assessee company with the associated enterprises were referred to the Transfer Pricing Officer (TPO) for determining the Arm s Length Price (ALP). The TPO passed the order dated 22nd January, 2014 wherein he made an ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the TPO/AO which was not adjudicated upon by the Revenue authorities. 7. The learned DR relied upon the order of the TPO/AO and directions of the DRP. 8. We have heard both the parties and perused all the relevant records. The Revenue has not disputed the functional profile of the assessee company at any point of time. During the course of hearing, learned DR could not distinguish the decision of the Delhi Tribunal in the case of Philip Morris Services India S.A. Vs. ACIT (supra) relating to four comparables which have to be excluded as per the submissions of the learned AR. Therefore, it will be appropriate to direct the TPO/AO to exclude these comparables in the light of the decision of the Delhi Tribunal. The Tribunal in the said case held as under :- 4. Before taking up the comparability or otherwise of the companies assailed before us, it is sine qua non to consider the functional profile of the assessee under this international transaction. The assessee entered into an Agreement with its AE on 01.04.2007 to be read along with an Amendment agreement dated 01.04.2008, under which it agreed to carry out market support services in India, Nepal, Bangladesh and A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject management consulting, Industrial cluster development, Environmental management consulting, Energy management consulting, Market and social research and Asset reconstruction management services. No segment-wise profitability data of these services is available. The TPO has considered this company as comparable on entity level. We find that there is a tiny resemblance of Market and social research functions performed by this company with the overall activities undertaken by the assessee. All other services are entirely different. We fail to appreciate as to how all the above listed services can be considered as comparable with the services provided by the assessee, which are restricted to market support as indicated above. 8. The ld. DR strenuously argued that all the activities done by this company are basically Business services and the assessee is also rendering business services. He submitted that differentiation of functions in the overall Business services umbrella is taken care of under the TNMM. He harped on the contention that there is no requirement to have identical services for the purpose of making comparison under the TNMM. 9. We are unable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is conducting Independent Procurement Review of multilaterally funded projects spread across the globe. It also undertakes Procurement audits. This company is providing full time advice on procurement and contract related aspects to several agencies across the globe. For example, in Georgia, it provided advice on procurement and contract related services to Municipal Development Fund (MDF), Republic of Georgia. In Iran, this company provided procurement advisory services to international forums, such as, Bam Reconstruction Office of Ministry of Housing, Tehran. In Guyana, this company was selected through an international competitive process in assisting the Government of Guyana in strengthening of its procurement administration under Technical Assistance Credit from the World Bank. In India, it provided Procurement Advisory Services to IIT, Baramathy, Pune, India in the implementation of World Bank administered Empowering Poor: A pilot ICT programme for rural areas of Pune District funded by Japan Social Development Fund Grant. It has also carried out review of Procurement Systems and Organisation in the State of Madhya Pradesh, particularly, covering the health, public heal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany, namely, R T, Records and Payroll, with the market services rendered by the assessee to its AE, on a cost plus basis, we find that there is a huge functional disparity between the two. That apart, the consideration of this company on an entity level by the TPO has rendered the entire exercise of comparison meaningless. Finding striking dissimilarities between this company and the assessee, we order to exclude this company from the final set of comparables. Similar view has been taken by the Tribunal in its order for the immediately preceding year in assessee s own case. iv. Quippo Valuers 15. The TPO proposed to include this company in the list of comparables which was objected to by the assessee. Such an objection was overruled by the TPO. The assessee could not get any relief from the DRP on this issue. 16. We have heard both the sides and perused the relevant material on record. It is an admitted position that the Annual report of this company for the relevant year is not available in public domain. Annual report of this company for the next year is available at page 148 onwards of the paper book, which also contains figures for the year under consider ..... X X X X Extracts X X X X X X X X Extracts X X X X
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