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2019 (6) TMI 49 - AT - Income TaxTP adjustment - Comparable selection - functional dissimilarity - HELD THAT:- EClerx Services Ltd this comparable is a best KPO company outsourcing substantial work to 3rd parties and that assessee is only providing back-office support services with its own human resource to the AEs. Further it has not been disputed that there is any change in the functionality of either companies from earlier years. Under such circumstances we direct Ld. TPO to exclude this comparable from the finalist. Infosys BPO Ltd and TCS E-Serve Ltd. - TCS E-Serve shows that this company is engaged in business process services to the banking and financial services industries which is considered as the primary segment. It is observed that the ownership of TCS e-services with Citibank group and which is a high brand value. See PR. COMMISSIONER OF INCOME TAX VERSUS B.C. MANAGEMENT SERVICES PVT. LTD. [2017 (12) TMI 255 - DELHI HIGH COURT] Benchmarking the international transaction pertaining to purchase of fixed assets at ‘nil’ - MAM selection - HELD THAT:- Assessee purchased certain fixed assets from its AE wherein it had declared certain value. And the same has been rightly reported as purchase of fixed assets with the transacted value, as international transaction. This transaction is definitely covered within the definition of section 92B (1) and for any income arising from an international transaction arm’s length price has to be determined in accordance to section 92C. Assessee has applied TNMM as most appropriate method for showing that the international transaction is at arm’s length price. As observed from records that the matter needs to be restored back to file of Ld.TPO because markup cannot be taken as ‘zero’ as has been done by TPO. Admittedly assessee gets depreciation as well as cost plus markup on the fixed assets purchased from AE. From order passed by Ld.TPO at page 225, it is observed that assessee, has not filed documents/evidences/proof showing value of assets as appearing in books of AEs to satisfaction of TPO. We direct Ld.TPO to determine the ALP based upon FAR analysis and on contemporaneous document filed by assessee. Assessee is directed to file all requisite details in respect of price for determining the arm’s length price of the transaction.
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