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2023 (10) TMI 1132

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..... ble with the assessee. Hence, we direct the Ld. AO to exclude Eclerx Service Limited from the final list of comparables while determining the ALP of International Transactions of the assessee. Accordingly, Ground raised by the assessee is allowed. - Shri M. Balaganesh, Accountant Member And Shri Anubhav Sharma, Judicial Member For the Appellant : Mr. Vishal Kalra, Ankit Sahani, Advocates Mr. Yishu Goel, AR For the Respondent : Mr. R.D.Burman, CIT-DR ORDER PER M. BALAGANESH AM: This appeal is preferred by the Assessee against the final assessment order dated 27/11/2014 passed u/s 143(3) r.w.s.144C (13) of the Income Tax Act, 1961 (hereinafter called the Act ) subsequent to the direction of the Ld. Dispute .....

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..... supporting HSI's intangible creation and maintenance activities, especially as it applies to the software tools. Heidrick Struggles group has set up mailboxes where candidates submit their resumes for actual or potential vacancies with Heidrick Struggles group clients. H S KMC India is responsible for retrieving the applications from the following mailboxes: Active CVs, Job Seekers; Shortlists; Candidate Reports, One-Pagers, Board CDM requests; Contact Research, and Research Update. H S KMC India is responsible for processing information contained in the resumes according to the preset criteria developed by HSI and including it into Search Palace. Search Palace and the datab .....

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..... ibility of the database associates is to access the mailboxes and retrieve applications submitted by candidates. These applications are processed based on pre-defined coding systems as defined by HSI. The processed applications and research results are included in the Search Palace. 63 people are involved in this activity. Quality Assurance This team is responsible for quality of the work performed by the database associates. This team eliminates duplicative information. It also reviews aging searches and follows ups with consultants in various Heidrick Struggles group offices on searches that have been open or on hold for more than 12 months to see if these searches should be cancelled/ terminated. This activity improves the qu .....

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..... its AE. There is no change in the services performed by the assessee right from the AY 2007-08 onwards. We find that this Tribunal in assessee s own case for AY 2007-08 in ITA No.6455/Del/2012 dated 18/01/2017 had excluded Eclerx from the list of comparable companies as functionally not comparable with the assessee. The relevant portion of the order for AY 2007-08 is reproduced herein under: 23 information obtained us 133 (6) and annual report for FY 2006-07, Assessee raised objection for the inclusion of this company in the list of final comparables on ground of functional dis-similarity and relied upon order passed by ITAT, Delhi Bench in the case of Copal Research India Pvt. Ltd. (ITA No.1713/Del.2014) (available at pages 741 to .....

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..... service centre and rendering transaction processing, data entry, reconciliation of statements, audit of shipping documents and other similar support services; and also rendering IT services such as process support. process optimization and technical support services, the Tribunal in para 82 of its order observed as under: In so far as M/s eClerx Services Limited is concerned, the relevant formation is available in the form of annual report for financial year 2007 05 placed at page 166 to 183 of the paper book. A perusal of the same shows that the said company provides data analytics and data process solutions to some of the largest brands in the world and is recognized as experts in chosen markets-financial services and retail and ma .....

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..... high-end services involving specialized knowledge and domain expertise in the field and the same cannot be compared with the assessee company which is mainly engaged in providing low-end services to the group concerns. 11.1. We find that the assessee also cannot be said to have relatable degree of comparability because primarily assessee was engaged in providing primary data for various field of activities but not complete business solutions. Therefore, this company could not be treated as comparable for the purpose of determining ALP of the transactions between the assessee company with its AES. We, accordingly, direct that this company be excluded from the list of comparables finally taken by the AO/ TPO as per the direction of the .....

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