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TMI Blog2021 (2) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... brief facts of the case are that the assessee is a company engaged in the business of design, development and manufacturing of automotive parts. The assessee undertaken international transactions with its AE amongst which the relevant transaction of provision of Engineering Design Support Services to an extent of Rs. 89,79,35,491/- and applied TNMM. The assessee submitted the revised PLI of design engineering segment at OP/OC of 3.47 %. The assessee in its TP report selected 8 companies by following TNMM which are as under: Sr. No. Company Name Weighted OP/OC % FY 2013-14 OP/TC % 1 Acropetal Technologies Ltd. 10.83 -5.86 2 Hepatica Technologies Ltd. 8.15 NA 3 Hinode Technologies Pvt. Ltd. -3.60 NA 4 I-Design Engineering Solutions Ltd. 13.83 NA 5 Neilsoft Ltd. 10.98 16.41 6 Onward Technologies Ltd. 14.93 15.69 7 Tata Elxsi Ltd. 3.84 4.82 8 Cades Digitech Pvt. Ltd. 2.47 NA Arithmetic Mean 7.68% 7.77% 5. The TPO examined the comparability of companies selected by the assessee and found Hepatica Technologies Ltd., Hinode Technologies Pvt. Ltd., I-Design Engineering Solutions Ltd., Onward Technologies Ltd. a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the head "KPO Services" in accordance with the Safe Harbour Rules and the data analytics and process outsourcing services of said company also fall under the scope of "KPO Services" similar to the assessee's Engineering Design Services which require application of knowledge and advanced analytical and technical skills which are provided with the use of information technology. The DRP considering the Safe Harbour Rules and the order of Special Bench of Bangalore ITAT in the case of Aztec Software & Technologies Ltd. reported in 107 ITD 141 and confirmed the view taken by the TPO for inclusion of Eclerx Services Ltd. in the comparables. 8. The Ld. AR, Shri Ajit Jain submitted that the Eclerx Services Ltd. is functionally not comparable as the said company is engaged in providing data analytics and data process solutions. The company's income from operations consist of revenue from data analytics services and process solutions which comprises of both time/unit price and fixed fee based service contracts. Further, he contended that the said company provides financial services, sales and marketing services and cable and telecommunication services which are completely diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Ld. AR is that Eclerx Services Ltd. is functionally not comparable to the functions of assessee. We find that at page No. 185 of the paper book where Management Discussion and Analysis overview and business overview is reflected. We note that the Eclerx Services Ltd. in F.Y. 2013-14 relevant to the A.Y. 2014-15 continue to make progress to create a more diversified and resilient revenue base. We note that the said company is engaged in banking and financial services business, digital marketing business and cable and telecom business. The functions and services provided in the said three divisions are at page No. 162 of the paper book which clearly shows different from the functions of assessee. All the contentions raised by the Ld. AR before us in the year under consideration were dealt by this Tribunal in earlier year concerning A.Y. 2011-12. There is no dispute regarding exclusion of Eclerx Services Ltd. by this Tribunal in assessee's own case in A.Y. 2011-12 which is at page No. 1 of the legal compilation and no order placed on record reversing the findings of this Tribunal. This Tribunal in order to arrive at a conclusion for exclusion of Eclerx Services Ltd. placed reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere to be considered comparable to the assessee, it is noteworthy that Eclerx operates under single primary segment (i.e. Data Analytics and process outsourcing services) and did not report any segmental data and argued that Eclerx cannot be considered as a comparable to the assessee. 21. We find this Tribunal in the case of MACOM Technology Solutions (India) Private Limited Vs. DCIT in ITA No. 2831/PUN/2016 for A.Y. 2012-13 vide order dated 09-05-2019 rejected Eclerx from comparable set based on functional dissimilarity. We find the present case is squarely similar to MACOM Technology Solutions (India) Private Limited (supra), wherein the assessee was engaged in similar design engineering services. For ready reference the relevant portion at para 16 is reproduced here-in-below: "16. We heard both the sides on this issue and perused the orders of the revenue authorities and the Paper Book filed before us. We also considered the judgmental laws placed before us. On hearing both the sides, we find the core issue for adjudication is that if company becomes a good comparable merely because the same is engaged in KPO activity like the assessee. We find, now it is decided at the leve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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