9911796707
TMI Blog2020 (9) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld.DR for the Revenue stressed that the global entity of which the assessee is the subsidiary has high brand value. No merit in the stand of the Revenue in this regard. Even on the second issue of high turnover, the said concern i.e. TCS e-Serve Ltd. cannot be selected as comparable. The total turnover of the assessee during the year is ₹ 30.92 crores. On the other hand, the turnover of the TCS e-Serve Ltd. is ₹ 1578 crores. Accordingly we hold that the TCS e-Serve Ltd. is to be excluded from the final list of comparables. Infosys BPO Ltd. which has both brand value and high turnover of ₹ 1312 crores cannot be selected as a concern comparable to the assessee whose total turnover is only ₹ 31 crores (approx.). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Act, 1961 ('the Act') read with Rule 10D of the Income-tax Rules, 1962 ('the Rules'). Further, the Ld. TPO, in the Appellant's own case, accepted the functional and economic analysis of the Appellant. 1.3 The Hon'ble DRPI Ld. AOI Ld. TPO erred in facts of the case in cherry picking companies having high operating margins without appreciating that such companies are functionally dissimilar to the Appellant. 1.4 The Ld. Assessing Officer/ Ld. TPO erred in using segmental data from an inappropriate business segment of a company in an inconsistent manner vis-a-vis the prior year. Further, the Ld. AO/ Ld. TPO erred in computation of operating margins of comparable companies which were accepted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worked out to 13.63%. The said computation of the margins was on multiple year average. However, during the TP proceedings, the assessee re-computed the mean margins of the comparables using current year data, which worked to 17.4%. The TPO issued show cause notice to the assessee and in the final analysis selected 10 comparables for benchmarking the international transaction of the assessee. The mean margins of the comparables worked out to 26.05% and consequently, the TPO proposed an upward adjustment of ₹ 23,600,763/-. 5. The assessee filed objections before the DRP which in turn upheld the TPO. Thereafter the Assessing Officer passed consequent assessment order, against which the assessee is in appeal before us. 6. The Ld.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short ITeS ) and is mainly engaged in research support for a broad array of business challenges, including competitive intelligence, customer experience and branding customer analytics, investment and due diligence, market entry and product launch. During the year, the assessee had provided services to G Rail Research LLC (G Rail, USA). The assessee had selected Transactional Net Margin Method as the most appropriate method to benchmark its international transaction of providing ITeS services. The margins shown by the assessee were 17.11% which were compared with the mean margins of the comparables selected using current year data at 17.4%. However, the TPO rejected some of the comparables and also modified the filters and proposed Transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Accentia Technologies Pvt.ltd., are sustainable and not erroneous? 10. The Hon ble Jurisdictional High Court dismissed the appeal of the Revenue observing as under:- The third comparable that the AO/TPO excluded is TCS E-serve. The ITAT observed that though there is a close functional similarity between that entity and the assessee, however, there is a close connection between TCS E-serve and TA T A Consultancy Service Ltd. which was high brand value; that distinguished it and marked it out for exclusion. The ITAT recorded that the brand value associated with TCS Consultancy reflected impacted TCS E-serve profitability in a very positive manner. This inference too in the opinion of Court, cannot be termed as unreasonable. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
