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2021 (10) TMI 960 - AT - Income TaxTP Adjustment - comparable selection - inclusion of Just Dial Ltd. in the list of comparables by the TPO - HELD THAT:- The source of revenue of Just Dial is subscription by the providers of goods or services, who enroll themselves on the company's platform. For enrolling with Just Dial, the providers choose from a variety of subscription models depending upon the type of coverage and the manner of their presentation on the company's platform. When we advert to the nature of services rendered by the assessee which are - Information Technology related services; Finance related services; Health, Safety and Environment Control; Quality analysts; Supply base Analyst; Supply chain planners/Analysts; and Packaging Specialist - it becomes graphically clear that not only the nature of services rendered by Just Dial is different but also the business model on which it works is poles apart from that of the assessee. Whereas Just Dial receives subscription from the providers of the goods or services for hosting their products/services on its platform and the user has to pay nothing, the assessee is providing services to its AE and gets remunerated at a cost with mark up from the user of the service itself, namely, the AE. In view of such a divergence in the nature of services and business model between the assessee and Just Dial, we hold that this company is not comparable. Accordingly, Just Dial is directed to be excluded from the list of comparables. We set-aside the impugned order and remit the matter to the file of the AO/TPO for re-doing the ALP determination of the international transaction of `Provision of Business support services' afresh in terms of this order. Admission of additional ground - Education Cess paid during the relevant Assessment Year be allowed as a deduction expense which is not covered under the provisions of section 40(a)(ii) - HELD THAT:- As relying on NATIONAL THERMAL POWER COMPANY LIMITED VERSUS COMMISSIONER OF INCOME-TAX [1996 (12) TMI 7 - SUPREME COURT] having gone through the subject matter of the additional ground espoused by the assessee, it is apparent that the same raises a pure question of law. We, therefore, admit the same. On merits, it is found that the issue raised through the additional ground is no more res integra in view of the judgment Sesa Goa Lt. [2020 (3) TMI 347 - BOMBAY HIGH COURT] in which it has been held that Education Cess is not a disallowable expenditure u/s. 40(a)(ii). Also see CHAMBAL FERTILISERS AND CHEMICALS LTD., PR. COMMISSIONER OF INCOME TAX, KOTA. VERSUS JCIT, RANGE-2, KOTA., M/S. CHAMBAL FERTILIZERS AND CHEMICALS LTD., GADEPAN, DISTT. KOTA. [2018 (10) TMI 589 - RAJASTHAN HIGH COURT] - We, therefore, direct the AO to ascertain the correct amount of education cess and then allow a deduction of it, after allowing opportunity of hearing to the assessee.
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