TMI Blog2020 (3) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... ental representative ORDER K. Narsimha Chary (Judicial Member). - 1. This is an appeal by M/s. Avaya India Pvt. Ltd. (the assessee), being aggrieved by the assessment order November 27, 2015 pursuant to the directions dated October 9, 2015 of the Dispute Resolution Panel-I, New Delhi (for short hereinafter called Ld. DRP ). Pending disposal of the appeal, the assessee sought stay of the matter. However, today when the matter has come up for consideration, it is submitted by the assessee that the stay petition has become infructuous and may be dismissed. The same is recorded. 2. The assessee, a professional services organisation ( PSO ) that functions primarily as a software programming and applications developer, providing services on behalf of and to the Avaya group entities, is a subsidiary of Avaya International LLC. They also provides marketing support services to its associated enterprises ( AEs ) which includes management, assistance in advertising and promotion of the products sold by the Avaya group. Apart from this, the assessee provides back office support services to its associated enterprises and these services includes provision of services relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lected seven comparables with a margin of 14.02 percent. whereas the comparables selected by the learned Transfer Pricing Officer were with the 31.74 per cent. and that in respect of market support services, the assessee selected eight comparables with the 11.18 per cent. whereas the learned Transfer Pricing Officer selected six comparables with 15.83 per cent. Since the OP/TC of the assessee worked out at 16 per cent., 18 per cent. and 6.5 per cent. in respect of the information technology, information technology enabled services and market support service segments, the learned Transfer Pricing Officer proposed adjustments to the international transactions pertaining to provision of information technology, information technology enabled services and marketing support services segment and vide his order dated December 18, 2014 proposed an adjustment amounting to ₹ 299,156,015 on the assessee's international transactions pertaining to provision of software development services, information technology enabled services and marketing support services. Pursuant to the order passed by the learned Transfer Pricing Officer, the learned Assessing Officer issued a draft order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se for the assessment year 2010-11, in I. T. A. No 1904/Delhi/2015, order dated December 3, 2018 Avaya India P. Ltd. v. Asst. CIT reported in [2019] 74 ITR (Trib) 612 (Delhi) ; [2019] 101 taxmann.com 331 (Delhi-Trib.), it was held that this company is not a suitable comparable because of the functional dissimilarity. 12. The learned Departmental representative submitted that there is no res judicata in tax adjudication and earlier year finding does not be a binding precedent for this year. He submitted that facts have to be verified for each year separately. 13. There is, however, no dispute that the functions of both the assessee and the HCCA Business P. Ltd. remained the same for these years. In such situation, nothing warrants to disturb the factual finding of this Tribunal in the assessee's own case for the earlier year. We, therefore, while following the view taken on facts by this Tribunal for the earlier year, hold that his company is not a good comparable to benchmark the international transaction. 14. As against the inclusion of HSCC (India) Limited, objection of the assessee is that HSCC (India) Limited is engaged in multiple business activities, rendering th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries India P. Ltd. [2016] 385 ITR 612 (Bom), and the decision of the hon'ble jurisdictional High Court in the case of Pr. CIT v. International SOS Services India P. Ltd. (I. T. A. No. 454 of 2016), the special leave petition against which was dismissed by the hon'ble Supreme Court in Pr. CIT v. International SOS Service India P. Ltd. (Special Leave Petition (Civil) Diary No(s). 18255 of 2018) ; [2018] 405 ITR (St.) 26 (SC). 17. In Pr. CIT v. International SOS Services India P. Ltd. (supra), it was held the wholly owned Government enterprises are not to be taken as comparables to non-Government companies because of the fact that the contracts between public sector undertakings are not driven by profit motive alone but other consideration also weigh in such as discharge of social obligations, etc., and the Government undertakings can even operate on losses in furtherance of social objectives of the Government. 18. The decision in the case of the Tribunal in the case of Avaya India P. Ltd. v. Asst. CIT [2012] 15 ITR (Trib) 237 (Delhi) in I. T. A. No. 5150/Delhi/ 2010, the hon'ble Bombay High Court in the case of Thyssen Krupp Industries India P. Ltd. (supra) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of operations it is mentioned that- Operation : The division manufacturers amber glass bottles of international quality for the pharmaceutical industry. Over 11.80 lakhs bottles are manufactured even-day on four fully automatic production lines. During the year under review demand for pharma bottles was good and the division achieved 9.16 per cent. higher turnover at ₹ 8361.14 lakhs. Over 20 per cent. of the bottles produced were exported. 24. In the case of Philip Morris Services India (supra), a co-ordinate Bench of this Tribunal found that Empire Industries Ltd. is engaged in the distribution and sale support of highly technical machines and pharmaceuticals, besides trading and day indenting of the industrial and medical equipment and machine tools, arid therefore, cannot be said as a comparables to the company rendering market support services. 25. There is no dispute that the Empire Industries Ltd. is sought to be compared with the assessee in its marketing support services and the functional profile of this two companies do not match. A company primarily deriving its income from manufacturing/trading and indenting services cannot be a good compar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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