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TMI Blog2019 (8) TMI 1725X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer pricing adjustment in respect of provision for corporate support services to Associated Enterprises (AEs) amounting to Rs. 1,07,31,614/-. 3. Second issue raised is transfer pricing adjustment in respect of research and development services to AEs amounting to Rs. 32,14,036/-. 4. Brief facts of the case are that the assessee company is engaged in the business of developing, manufacturing, trading, distribution and supplying of innovative specialty chemicals. It is a subsidiary of the Ashland group. The assessee has undertaken various international transactions with its AEs but the TPO has only made adjustment for 'provision of corporate support services' (ITeS) and provision for 'research and development services' (R&D). Apropos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjustment of Rs. 1,01,26,028/- is made to this transaction. 6. Against the above, the assessee submitted its objection before learned DRP and finally post DRP direction, following comparables were selected :- (i) Excel Infoways Ltd. : 42.25% (ii) Jindal Intellicom : 15.91% (iii) BNR Udyog Ltd. : 24.99% (Average 26.22%) 7. Now against the above order, assessee is in appeal before us. 8. We have heard both the counsel and perused the records. Learned Counsel of the assessee contended that the comparables R Systems International Ltd. selected by the assessee, which has been rejected should be included as comparable. He submitted that that this has been so held by several decisions of the ITAT. He also submitted that exclusion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Centre India Private Limited v/s. ACIT reported in [2018] 100 taxmann.com 435 (Mum-Trib) for the Assessment Year 2012-13. * CIT v/s. Mercer Consulting India P. Ltd. reported in [2017] 390 ITR 615 (Punjab & Haryana) for the Assessment Year 2008-09 10. Learned counsel submitted that upon extrapolating details of quarterly result margin of the said company comes to 14.64%. Accordingly, learned counsel prayed that the issue may be remanded back to the TPO with direction to include the said R Systems International Ltd. in final list of comparables and consider in light of the now available quarterly result from 1st April 2013 to 31.4.2014. 11. As regards plea rejection of Excel Infoways Ltd., learned counsel submitted that this comparable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 285 (Delhi Trib) for the Assessment Year 2012-13 * Clear Info Analytics Private Limited v/s. ACIT (ITA No.2299/MUM/2017) for the Assessment Year 2012-13 * Emerson Climate Technologies (India) Private Limited reported in [2018] 100 taxmann.com 478 (Pune-Trib) for the Assessment Year 2013-14 14. Upon careful consideration, as regards the plea of learned counsel of the assessee for inclusion of R. Systems International Ltd., we find ourselves in agreement with the submission made. The said comparable has been rejected only on the ground that it follows different accounting period and learned DRP has observed that such comparable has to be excluded as the result cannot be compared with degree of accuracy as quarterly audited results are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect that R. Systems International Ltd. be included as comparable in terms of our direction as above and Excel Infoways Ltd. should be rejected. 18. Learned TPO shall accordingly make computation afresh after giving the assessee proper opportunity of being heard. Apropos - Transfer pricing adjustment in respect of research and development. 19. In this regard, assessee has submitted following details :- Name of the Company OP/OC Choksi Laboratories Ltd. 15.06% Saamya Biotech (India) Ltd. 1.63% Syngene International Ltd. 36.05% TCG Lifesciences Ltd. 13.47% Trijal Industries Ltd. 7.45% Vimta Labs Ltd. 15.97% Vivo Biotech Ltd. 1.16% Average: 12.97% 20. The TPO accepted the some of the comparables and he computed margin as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n page No. 11 of the Order) upheld by jurisdictional. * Bombay High Court in ITA No. 1731 of 2016 (refer para 10 on Page 8 of the Order). * Evonik Degussa India Private Ltd. v/s. ACIT reported in [2012] 28 taxmann.com 285 (Mumbai-Tribunal) for the Assessment Year 2007-08 (refer para No. 19 on page No. 11 and 12 of the Order). * DDIT v/s. Pioneer Overseas Corporation India reported in [2018] 93 taxmann.com 274 for the Assessment Year 2007-08 (refer para No. 16 & 17 on page No. 6 of the Order). 23. Learned counsel contended if the above comparable is excluded margin shall come to 14.83%, hence, learned counsel pleaded that this comparable has to be rejected. 24. Upon careful consideration, we note that as regards transfer pricing adju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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