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TMI Blog2019 (6) TMI 1551X X X X Extracts X X X X X X X X Extracts X X X X ..... not expressly reject the company Crisil Marketwire Limited which appeared as comparable company in set of comparables in assessee s transfer pricing study and hence he also directed this should be included in comparables. This direction of learned CIT(A) in our considered opinion is not sustainable. When learned CIT(A) is accepting that search process of twenty one comparables selected by the TPO should be adopted, then learned CIT(A) again cannot blow hot and cold and insist that one of the comparable appearing in the assessee s original transfer pricing study should be included. This act in fact, is cherry picking by learned CIT(A) himself and the same is not sustainable. CIT(A) to disregard five of the comparables coming out of TPO s fresh search process - We note that learned Counsel of the assessee has not made any argument in support. Learned Counsel of the assessee only confined his argument about the rejection of nine comparables and cherry picking done by the TPO. Accordingly, we direct that comparable analysis should be done on the basis of twenty one companies selected by the TPO and one more added by learned CIT(A) namely Nittany Outsourcing Limited . Marketing support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il Kumar ORDER Per Shamim Yahya (AM) : On appeal here is Revenue s against order of the learned CIT(A) for assessment year 2005-06 and another appeal by the assessee against the order of Assessing Officer pursuant to order of learned Dispute Resolution Panel for A.Y. 2012-13. Since appeals were heard together, these are being disposed of by consolidated order, for the sake of convenience. 2. ITA No. 6721/Mum/2010 - Revenue s appeal for A.Y. 2005-06 Though various grounds are raised, the issues arising are dealt with as under:- One issue relates to adjustment u/s. 92CA(4) of the Act of ₹ 2,14,25,160/-in respect of international transactions entered with the Associated Enterprise (AE). 3. Brief facts on this issue are that the assessee is a private limited company engaged in the business of providing market analysis and consultancy services to its clients and sometime also to clients of other FS group subsidiaries. In addition to above, it also provides low end back office support services to its AE. During the financial year 2004-05, GIC division of the assessee provided low end back office services to FS-USA and invoiced of ₹ 152,049,523/- on the basis of cost plus 10% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted by TPO for marketing expenses 2.30% ALP Margin 6.94% 6. Thereafter he also directed that the adjustment for marketing expense allowed by the TPO should be done and finally he found that resultant margin compared favourably. Against this order, the Revenue is in appeal before us. 7. We have heard both the counsel and perused the records. We note that the TPO has done fresh search process in applying his own filter and came up with twenty one comparables. Out of these nine comparables were rejected without giving any reason whatsoever. We agree with learned Counsel of the assessee that this act of the TPO is classical act of cherry picking. There is no justification whatsoever as to why nine of the comparables selected by the TPO himself by applying filters selected by him only should be rejected. Hence, we uphold the order of learned CIT(A), wherein nine comparables were directed to be included in comparable search. 8. As regards direction of learned CIT(A) that company namely Nittany Outsourcing Limited came out of the same re-run of the search process is also acceptable. However, we find that learned CIT(A) has directed that the TPO did not expressly reject the company Crisil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings the assessee has given a statement that it has received advance towards market research analysis services rendered during the year. Therefore, the details given in the balance sheet and the submissions made during the course of assessment proceedings are contradictory to each other. Neither the AO nor the Ld. CIT(A) has gone into this aspect. Therefore, when it was proposed that the issue needs verification at the level of the AO, both the parties fairly agreed that they have no objection if the matter is restored to the file of the AO. We, therefore, deem it proper to restore the issue to the file of the AO with a direction to give one more opportunity to the assessee to substantiate its claim with evidence to the satisfaction of the AO regarding the nature of advance received, its purpose and utilization and how the same has subsequently been adjusted from the bills raised by the assessee. The AO shall decide the issue in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. This ground raised by the Revenue is accordingly allowed for statistical purpose. 12. Respectfully following the precedent, we set aside th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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