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2012 (8) TMI 590 - ITAT, MUMBAITransfer pricing - adjustment to international transaction in the nature of marketing support services, consultancy services and low end services to group companies - assessee contesting adjustment on various grounds - assessee contended exclusion of companies who are earning extraordinary profits - objection to arbitrary rejection of comparable - objection to inclusion of certain companies viz CMC Ltd. for having 58.82% related party transactions, ICC International Agriculture Ltd. & TSR Darashaw for having significantly higher operating margin than the average margin - Held that:- It is observed that specific issues raised by the assessee before DRP have not been addressed and decided by way of a speaking order. It can be seen from the list of comparables selected by TPO that none of the other parties except ICC, TSR and CMC Ltd. have margin of more than 26.67%. If out of 13 comparables except three comparables do not have margin of the magnitude which ICC & TSR have then there is a merit in the contention of the assessee that these comparables should not be taken as comparable on account of their having super normal profits. Nothing contrary to this has been demonstrated by Revenue Further, contention of the assessee that the loss making companies which have been excluded being not persistent loss making companies should be excluded is also required to be examined in detail. Hence, matter should be restored back to the file of DRP with a direction to pass a speaking order. It is also held that appropriate relief should be given to assessee for safe harbour of 5% as per laws. Dis-allowance of marketing expenses incurred in foreign currency - business expediency - Held that:- It is observed that assessee has furnished chart to show that all these expenses have been recovered as cost has also been able to show that most part of the cost is incurred on the media covering Indian territory. Since DRP has passed non-speaking order hence matter restored back to the file of DRP with a direction to bring all these facts on record and re-decide this issue. Dis-allowance of travelling expenses incurred in respect of travel to countries like USA, UK, Hong Kong , Sri Lanka etc, except Singapore where AE of the assessee is situated - Held that:- When complete details are filed, dis-allowances cannot be made on adhoc basis as it has to be brought out that a particular expenditure was not incurred for the purpose of business of the assessee. Matter restored back - Decided in favor of assessee for statistical purposes
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