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TMI Blog2021 (12) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... not furnished proper bifurcation of employees involved in the two activities. In our opinion, this cannot be a reason to reclassify the business profile of the assessee. The engineers could have been appointed to carry out some work in the field of marketing services. There is no prohibition on this count. The assessee is not disentitled to appoint engineers for carrying out the marketing services with regard to international transactions to its AE. Since judicial discipline requires consistency in its proceedings from year to year, the business profile of the assessee cannot be changed from year to year wherein the all the international transactions of the assessee are based on the same agreement dated 8.8.1994 with its AE. Being so, in our opinion, it is appropriate to vacate the findings of the revenue authorities on this count and allow the grounds taken by the assessee. Accordingly this ground is allowed. - IT (TP) A No. 283/Bang/2014 - - - Dated:- 1-12-2021 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER Appellant by : Shri Rakesh Gupta, CA Respondent by : Dr. Manjunath Karkaihalli, CIT(DR)(ITAT), Bengaluru. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the TPO in computing the transfer pricing adjustment on such basis. (corresponding to ground no.3.2) 3.3. Upholding the learned TPO's approach of using data as at the time of transfer pricing assessment proceedings which was not available to the Appellant on the date of preparing the TP documentation. (corresponding to ground no.3.3) 3.4. Disregarding application of multiple year/ prior year data as used by the Appellant in the TP documentation and holding that current year (i.e. Financial Year 2008-09) data for comparable companies should be used. (corresponding to ground no.3.4) 3.5. Rejecting the TP documentation maintained by the Appellant and the comparability analysis in undertaken therein, by the Assessee in accordance with the provisions of the Act read with the Income Tax Rules, 1962, ( the Rules ) and conducting an arbitrary comparability analysis for arriving at a final set of comparables companies. (corresponding to ground no.3.5) 3.6. Upholding the TPO's approach of undertaking a fresh search for the purpose of comparability analysis and selecting incorrect industry classifications as part of the search strategy, thereby arriving at a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant for the Business Support Services segment on the ground of functional similarity whereas this comparable should have been excluded for the reason being functionally dissimilar, segmental data not available in the public domain and fails advertising expenses 3% of total sales filter. (corresponding to ground no.3.7) 3.13.The learned AO in pursuance of the directions of the learned Panel erred in law and on facts in excluding Empire Industries Limited as a comparable to the Appellant on the ground of functional dissimilarity whereas this comparable should have been included for the reason being functionally similar and passing all the filters applied by the Ld. TPO. (corresponding to ground no.3.7) 3.14.The learned AO in pursuance of the directions of the learned Panel erred in law and on facts in excluding PAE Limited as a comparable to the Appellant on the ground of functional dissimilarity whereas this comparable should have been included for the reason being functionally similar and passing all the filters applied by the Ld. TPO. (corresponding to ground no.3.7) 3.15.The learned AO in pursuance of the directions of the learned Panel erred in law and on fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason being functionally dissimilar and fails service income 75% of total sales filter. (corresponding to ground no.3.7) 3.21.The learned AO in pursuance of the directions of the learned Panel erred in law and on facts in including Rites Limited as a comparable to the Appellant for the Technical Support Services segment on the ground of functional similarity whereas this comparable should have been excluded for the reason being functionally dissimilar.(corresponding to ground no.3.7) 3.22.The learned AO in pursuance of the directions of the learned Panel erred in law and on facts in including TCE Consulting Engineers Limited as a comparable to the Appellant for the Technical Support Services segment on the ground of functional similarity whereas this comparable should have been excluded for the reason being functionally dissimilar (corresponding to ground no.3.7) 3.23.The learned AO in pursuance of the directions of the learned Panel erred in law and on facts in including IBI Chematur Limited as a comparable to the Appellant for the Technical Support Services segment on the ground of functional similarity whereas this comparable should have been excluded for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end or withdraw all or any of the Grounds of Appeal and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing. 3. Ground Nos. 1 to 3 are general in nature which do not require any adjudication. 4. Now we consider ground No.3.1. The facts are that the assessee entered into international transaction with its AE in the marketing and sales support services of ₹ 22,35,84,793 under the TNMM method. The TPO was of the opinion that the assessee vide agreement dated 8.8.1994 with its AE i.e., Parametric Holding Inc. Parametric India is engaged in marketing support services in India on behalf of its AE. Para 2 of the agreement states as follows:- a. Assist Holding and other entities through the coordination of sales promotion and advertising for the products in the territory; b. Conduct market research and keep Holding and/ or other entities advised and informed regarding all matters within the territory which may be reasonable business interest or concern to Holding and/ or other entities; c. Provide informational, educational and service programs in the territory to other entities and end user ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claim was in contrast with the functions of Parametric India detailed in the TP report. Accordingly, assessee is treated from marketing service provider to a full-fledged technical/business support services to its AE. Against this, the assessee is in appeal before us. 7. The ld. AR submitted that for all the AYs 2004-05 to 2008-09 and subsequent AY 2010-11, assessee has been characterized as conducting marketing services provider and this year alone assessee has been changed to full-fledged technical/business support services provider which is against the set principles of law. Further it was submitted that for AY 2010-11, the assessee came in appeal before this Tribunal in IT(TP)A No.145/Bang/2015 wherein the Tribunal held that there is no dispute regarding the assessee s business profile as marketing support services in relation to global support services scheme. Being so, in this assessment year also, business profile cannot be changed to a technical/business support service provider. 8. On the other hand, the ld. DR submitted that the assessee has not provided bifurcation of employees involved in the two activities, as such business profile has been changed from contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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