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TMI Blog2019 (3) TMI 2028X X X X Extracts X X X X X X X X Extracts X X X X ..... s. However at the time of hearing, the Ld. AR of the assessee submitted that he is only pressing ground no. 4, whereas the rest of the grounds are not pressed. Therefore, the rest of the grounds are dismissed as 'not pressed'. The ground No. 4 is as under:- 4. On the facts and in the circumstances of the case and in law, the honourable CIT (Appeal) - 13, Pune erred in confirming the inclusion of Universal Print Systems Limited in the list of comparable companies by the learned TPO without appreciating the fact that: a) The said company is not comparable with the appellant since the functions performed by the company are different than that performed by the appellant and the scale of operations and turnover of the said company is subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plus mark up of 9.95% for this category of service. 5. As per the TP report, eight (8) companies were selected by the assessee as comparable. However, the TPO rejected all the eight companies and started afresh search and accordingly provided a new set of comparables with the functions of the assessee in which the Universal Print Systems Ltd was also included. Even it was objected by the assessee, however in the final set of comparables, Universal Print Systems Ltd was taken as comparables with that of the functions of the assessee. Assessee objected that it is having less than 50% of the operating revenue from ITes segment, hence it is not comparable with it. Ld. TPO stated that this criteria is applicable only if the segmental revenue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly from "Pre press BPO" activity. The prepress BPO activity includes all the processes and procedures that occur between the creation of print layout and the final printing. Hence, the assessee wishes to state that Universal Print Systems Limited is not functionally comparable to the assessee. 3. High-end ITES services: Universal Print Systems Limited provides much specialized services which require expertise and skilled workforce in these fields unlike ITeS activities undertaken by the assessee. The company Universal Print Systems Limited requires skilled and talented employees can be observed from their site: Cutting edge infrastructure & a highly skilled workforce ensure that the best possible results are achieved from any g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per ground of appeal no. 9(c). The learned TPO had accepted the appellant's contention that working capital adjustment is to be allowed. However, the learned TPO did not consider the same while calculating the PLI after Working Capital Adjustments. The copy of calculation of PLI after Working Capital Adjustments is appearing on page no. 129 of the paper book. The Appellant prayed that the correct PLI after WCA of Universal Print Systems Ltd. be taken i.e. 39.94% for the purpose of calculating average PLI and arm's length price be recomputed. The appellant requested to exclude Universal Print Systems Limited in the list of comparable companies as the revenue from ITES segment is 21.63% of the total revenue and it does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a vis the function of the assessee company before holding it to be a comparable company. In the decision of the Bangalore Tribunal in the case of M/s XL Health Corporation India Pvt. ltd. Vrs. ACIT 2018 (4) TMI 82, it was held as under :- C. Universal Print Systems Ltd.:- This company was selected by the TPO by obtaining information by exercising of the power vested with him under the provisions of section 133(6) of the IT Act. The TPO held that this company satisfies all the filters selected by him. However this company was objected by the assessee-company before the TPO on the grounds of functional differences as it is engaged in the business activities such as printing and allied activities, high profit making company and also fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble DRP also confirmed the findings of TPO. ii) Being aggrieved, the assessee-company is before us. It is contended by the assessee that this company fail revenue filter more than 75% from ITES segment and also functionally not comparable with that of the assessee-company and also fails the filter of earnings from export against 75% of the total revenue and also fails the employee cost filter as employee cost is only 18.56% of the sales. iii) We heard the rival submissions and perused the material on record. We have perused the Annual Report of this company placed at pages 352 to 463 of paper book. From the page no. 354 it is stated as under. "In 2011-12, Your Company faced many challenges ranging from historically steep fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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