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2023 (4) TMI 191 - AT - Income TaxTP Adjustment - comparable selection - include Agricultural Finance Corporation Ltd., as a comparable entity - HELD THAT:- It is a fact on record that Apitco Ltd is a Government company which has been included as a good comparable by the ld. TPO. It is also pertinent to note that inclusion of a Government company as a good comparable i.e. Apitco Limited is not disputed by the assessee before us. While this is so, the ld. DR before us cannot try to make out a new case beyond what has been done by the ld. TPO/AO. Hence, rejection of Agricultural Finance Corporation Ltd as a good comparable cannot be done merely because it is a Government company in the peculiar facts and circumstances of the instant case. There is absolutely no dispute that Agricultural Finance Corporation Ltd is functionally comparable with that of the assessee. Hence, we hold that the ld. CIT(A) has rightly included Agricultural Finance Corporation Ltd as a good comparable in the facts and circumstances of the instant case. TPO/AO is directed to include the same as a comparable. Inclusion of Office Care Services Ltd as comparable - It is not in dispute that the annual report of the said comparable company does not specify the nature of functions performed by that company. Hence, even at the time of benchmarking done by the assessee itself, the assessee had not bothered to obtain any other evidence to bring on record the nature of functions performed by the said comparable company to include the same in the list of comparables. It is very well settled that the information mentioned in the website of any company is only for their performance and cannot be relied upon by any statutory authority or by any Court. Hence, we are in agreement with the argument advanced by the DR on this issue. Accordingly, we hold that the ld. CIT(A) was justified in rejecting this company as a good comparable with the assessee for want of details of functions performed by the said comparable. Hence, the ground raised by the assessee in its cross objections is dismissed. Inclusion of Vatika Marketing Ltd has been rightly rejected in the final list of comparables as it is engaged in providing project maintenance services and segmental details are not available. Exclusion of notional foreign exchange loss incurred by the assessee while considering the actual cost on which margin of 10% has been added by the assessee for recovery from the AE - HELD THAT:- The entire exchange fluctuation risk is to be borne only by the AE and not by the assessee. The assessee is merely a pass through entity of collecting the US$ from ONGC and passing on the same to AE pursuant to back to back arrangement. Since this exchange loss is purely notional, the assessee has chosen not to get it reimbursed from its AE during the year under consideration. AR also stated that any exchange loss incurred actually by the assessee at the time of actual settlement of bills has been duly reimbursed by the AE to the assessee. Hence, we hold that assessee was duly justified in not adding mark-up of 10% on this exchange loss considering the fact that it is purely notional in nature in the peculiar facts and circumstances of the instant case. Accordingly, the ground No.9 raised by the assessee in its cross objections is allowed. Determining the ALP on account of reimbursement and recovery of expenditure by adding 10% mark-up thereon - HELD THAT:- CUP method chosen by the assessee considering the nature of transaction and degree of comparability as the Most Appropriate Method, is hereby upheld. We find that either way all these expenses have been duly included in the total expenses included by the assessee on which mark-up of 10% has been claimed by the assessee from its AE. Hence, the action of the ld. TPO in determining the ALP of this transaction at “Nil” is absolutely without any basis and the adjustment proposed in the sum is hereby directed to be deleted. Recovery of expenses represent expenses incurred by the assessee company on behalf of AE towards Bid bond expenses. These expenses were also recovered by the assessee from its AE with markup of 10%. Hence, the reasoning given by us hereinabove for reimbursement of expenses would apply for this issue of recovery of expenses also. Hence, we dismiss the action of the ld. TPO in determining the ALP of this transaction at Nil and consequentially direct for deletion of adjustment made towards recovery of expenses. Accordingly, the ground No.10 raised by the assessee in its cross objection is allowed.
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