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2019 (1) TMI 1904 - AT - Income TaxTP Adjustment - whether the assessee is a BPO or a KPO? - Eclex Solutions Limited exclusion - HELD THAT:- We feel there is no need to address the preliminary issue as to whether the assessee is a BPO or KPO. We find that the ld.AR was very fair in stating that once the comparable Eclex is excluded from the list of comparables chosen by the ld. TPO, then its margin would be through, warranting no adjustment to ALP in respect of international transaction carried out by it. Hence, we proceed to address that particular comparable alone in this order. Outsourcing activity in one company which is done predominantly cannot be treated as a comparable with the company which is engaged in carrying out its activity in-house. These facts were duly brought as a specific objection by the assessee before the ld. TPO as well as ld. DRP as detailed elsewhere hereinabove in this order by way of written submissions. Hence, it cannot be said that the assessee had made this objection for the first time before this Tribunal. We also find that the objections made by the assessee with regard to this comparable namely Eclex Solutions Limited had not been disputed by the ld. TPO or by the ld. DRP by pointing out certain factual differences in the objections of the assessee, more particularly, with regard to the predominant activity carried on by the said comparable. We hold that Eclerx Solutions Limited should not be treated as a comparable as it is functionally different and we direct the ld. TPO to exclude the same from the list of comparables while benchmarking the international transactions for determination of Arm’s Length Price, for this assessment year. We would like to make it clear that the grounds raised by the assessee with regard to other comparables are left open and no opinion is given by us in this order. Accordingly, the grounds raised by the assessee are allowed.
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