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2023 (11) TMI 229 - AT - Income TaxTP Adjustment - comparable selection - Adjustment of Marketing Support Services - HELD THAT:- Power Systems Operations Corp. Ltd. entity is a government company and responsible for ensuring the integration of power grid whereas the assessee is providing only limited marketing support services. The sale magnitude of this entity is quite high and not comparable to the assessee. In the case of Mentor Graphics (Sales and Service) Pvt. Ltd.[2019 (10) TMI 1552 - ITAT DELHI] which is an entity having similar functional profile as that of the assessee, DRP has excluded this entity from comparable matrix. Therefore, this entity has rightly been excluded by Ld. CIT(A). Apitco Ltd. is engaged in providing specialized consultancy and therefore, rightly been excluded by Ld. CIT(A). Assessee’s marketing functions could not be compared with an entity providing high end technical consultancy. As in Philip Morris Services India S.A. (2018 (6) TMI 1226 - ITAT DELHI) wherein this entity was excluded on the similar reasoning that it was engaged in provided highend consultancy services. Global Procurement Consultants Ltd e assessee’s marketing functions could not be compared with an entity providing high end technical consultancy to entities like World Bank and other significant financial institutions where the magnitude would be very high and the objective would be different. Therefore, this entity has rightly been excluded by Ld. CIT(A). SEL and ARMS segments of India Tourism Development Corporation Ltd. (ITDC) - As CIT(A), considering the decision of Eli Lilly & Co. India P. Ltd. (2015 (12) TMI 1172 - ITAT DELHI) directed Ld. TPO to include SEL and ARMS & misc. operations segment of ITDC Ltd. CIT(A) has directed lower authorities to adopt particular segment of this entity which is quite comparable to assessee’s functions. Therefore, we find no reason to interfere in the same. EDCIL Ltd. entity has been accepted to be comparable entity in earlier years and therefore, there is no reason for rejection of the same in the current year. No change in functional profile of that entity has been demonstrated before us. In House Production Ltd.entity has been accepted to be comparable entity in earlier years and therefore, there is no reason for rejection of the same in the current year. No change in functional profile of that entity has been demonstrated before us. Directions of CIT(A) with respect to certain comparable entities wherein Ld. CIT(A) has directed Ld. AO / TPO to reconsider the Annual Report of these entities - We find that Ld. CIT(A) has merely directed lower authorities to reconsider the annual report and re-compute the margins of these entities. Therefore, the argument raised by the revenue is not to be accepted. Nature of expenses - disallowance u/s 37(1) on Advertisement, Marketing and Promotion expenses - AO disallowed 50% of such expenditure on the ground that it was capital in nature - HELD THAT:- We find that this issue is covered in assessee’s favor by the decision of Delhi Tribunal in assessee’s own case for AY 2008-09, [2020 (6) TMI 568 - ITAT DELHI] wherein Tribunal dismissed revenue’s ground of appeal assailing similar adjudication. Therefore, the adjudication of Ld. CIT(A) do not require any interference on our part. Management fees paid to is AE which was disallowed u/s 37(1) - HELD THAT:- We concur with the adjudication of Ld. CIT(A) that once ALP has been determined by appropriate authority, no separate adjustment / disallowance is called for on the part of Ld. AO. The corresponding grounds stand dismissed.
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