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TMI Blog2023 (5) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... o exclude Domex e-Data Pvt. Ltd. from the final set of comparables. Since on this issue, the assessee succeeds and Domex e-Data Pvt. Ltd. is excluded while benchmarking of the ITeS segment from the final list of comparables in the case of the assessee, therefore, all other transfer pricing grounds raised in this appeal becomes academic. With these observations, the appeal of the assessee stands allowed. - Shri Partha Sarathi Chaudhury, Judicial Member And Shri G.D. Padmahshali, Accountant Member For the Assessee : Shri Ketan Ved, CA For the Revenue : Shri Anurag Shrivastava, CIT DR ORDER PER PARTHA SARATHI CHAUDHURY, JM: This appeal preferred by the Assessee emanates from the findings of ld. DRP-3, Mumbai-2, dated 19.05.2022 for A.Y.2018-19 as per the following grounds of appeal:- The Ld. Assessing Officer [ AO ], Ld. Transfer Pricing Officer [ TPO ] and Hon'ble Dispute Resolution Panel CDRP ) erred in law and in fact in assessing the total income of INR 1,71,54,680 as against returned income of INR 88,61,750 as computed by the Appellant in its return of income. Transfer Pricing adjustment on account of the international transaction relating to Information Technology enabled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia is engaged in the business of Information Technology enabled Services (ITeS) in the field of architectural and interior designing. During the year under consideration, the assessee had entered into various international transactions with its associated enterprises (AEs) as reported in Form 3CEB. The disputed transaction in this case is the service income where the amount as per Form 3CEB has been shown at Rs. 8,35,21,641/-. Thereafter, the TPO determined the OP/OC per cent margin at 12.55% for the assessee. The TPO rejected the assessee s submission and selected comparables in the ITeS segment as appearing at page No.58 para 11 of his order and arrived at median (5th place) at 23.35%. The AO finally made a total adjustments of Rs.82,92,925/- on the international transaction relating to ITeS segment. 3. At the time of hearing, ld. counsel for the assessee explaining the scope of ITeS service performed by the assessee and submitted that the AE which is the US entity procures contract in relation to drawings etc. regarding architectural and interior designing. Some of these works are outsourced to the assessee before us. The assessee completes the work assigned to it by the AE, i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this issue where they have upheld the findings of the TPO and had rejected the contention of the assessee. The ld.DRP had also expressed its view that as per the annual report of Domex e-Data Pvt. Ltd., since engaged in provision of services relating to e-commerce, therefore, it is in the nature of ITeS and hence, similar to that of the assessee. 6. We have heard the submissions of the parties and analyze the facts and circumstances in this case and have given considerable thought to these submissions made before the Bench. 6.1 Admittedly, the assessee is doing ITeS functions and as explained by the ld.counsel for the assessee, it is mainly doing drawings etc. for architectural and interior designing which is outsourced to it by the AE, i.e. the US entity and for the work done by the assessee in India, receives service income from AE. In the ITeS segment, the TPO had included comparables and the assessee before us has submitted that out of these comparables, if Domex e-Data Pvt. Ltd. is excluded, then the assessee would fall within the comparable range and there would be no transfer pricing adjustment and the other grounds would therefore become academic. We observe from the annu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that for the same A.Y. 2018-19, Domex e-Data Pvt. Ltd. was excluded from the final list of comparables for benchmarking international transaction in ITeS segment. 6.2 In the case of M/s. Altair Engineering India Pvt. Ltd. v. ACIT [IT(TP) No.1025/Bang/2022, dated 09/01/2023], the coordinate Bench of ITAT, Bangalore at paras 34 35 has held as under:- 34. In so far as comparability of Domex e-Data Pvt. Ltd. is concerned, the argument was that this company is engaged in providing KPO and therefore cannot be compared with an ITeS such as the assessee. On this objection, the DRP again held that ITeS and KPO have to be regarded as one and the same. Learned counsel has pointed out that in the following decisions, Tribunal has taken the view that companies rendering KPO services cannot be as a comparable company with an ITeS company. Transperfect Solutions India Pvt. Ltd. v. ACIT [TS-497-ITAT- 2022 (PUN)-TP] AY 2016-17 Schlumberger India Technology Centre (P) Ltd. v. DCIT [TS-473- ITAT-2022(PUN)-TP] AY 2016-17 Credence Resource Management (P.) Ltd. v. ACIT [2022] 138 taxmann.com 543 (Pune Trib.) for AY 2016-17 35. In the light of the aforesaid decisions, we are of the view that Domex E-Da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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