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2019 (3) TMI 428 - HC - Income TaxTP adjustment - Comparable selection criteria - exclude the comparables of SIRO Clinpharm Pvt Ltd. Assessee is a company engaged in manufacture and sale of pharmaceutical products - as per revenue SIRO Clinpham Pvt Ltd included as comparable by the respondent itself in its transfer pricing study and therefore, bound by it - HELD THAT:- If an assessee in view of mistake or an incorrect advice does include and / or exclude a company from the list of comparables, it is not irrevocable / irreversible. Thus, if on facts, the assessee is able to establish that the company if sought to include is not comparable, it is not to be included in the list of comparable. Thus, there is no merit in the first objection on behalf of the Revenue. So far as the second objection Revenue invited our attention to the fact that the Tribunal by its order dated 8.3.2013 for assessment year 2002-03 had accepted M/s. SIRO in its list of comparables to determine the ALP of the respondent. However, in view of the difference between the business model between M/s. SIRO and the respondent, the Tribunal had restored the issue to the Assessing Officer for appropriate adjustment while determining the ALP. This was so because M/s. SIRO's business model is based on inhouse activity while that of the respondent is based on outsourcing activity. This order of the Tribunal dated 8.3.2013 was challenged before this Court by the Revenue being Income Tax Appeal No. 2183 of 2013 for being restored to the Assessing Officer. However, the same was dismissed by this Court on 27.6.2016. However, the order dated 8.3.2013 in respect of assessment year 2002-03 was not challenged by the respondent assessee - no justification for the impugned order of the Tribunal to exclude M/s. SIRO from the list of comparables M/s. Choksi Laboratories Ltd - It is to be noted that on 26.3.2018, this Court in the case of CIT Vs. Aptara Technology P Ltd [2018 (4) TMI 404 - BOMBAY HIGH COURT] had held that the company which outsources it work is not comparable for ALP determination with a company that does the activity inhouse. Therefore, no fault can be found with the impugned order of the Tribunal in applying the binding decision of this Court. Therefore, in view of the decision of this Court in Aptara Technology P Ltd (supra), the question as proposed to the extent it seeks to include M/s. SIRO does not give rise to any substantial question of law. Thus, not entertained. M/s. Syngene International Pvt Ltd - This entity is wholly owned subsidiary of M/s. Bicon Ltd and is having substantial related party transactions. This fact has not been disputed by the Revenue before the Tribunal nor before us. Thus, the question of including M/s. Syngene International P Ltd would not arise in determining the ALP of the respondent assessee transactions with its A.Es. Therefore, the concurrent finding of facts by the Commissioner of Income Tax (Appeals) as well as the Tribunal in excluding this entity cannot be faulted with in the absence of the Revenue showing it to be perverse. Thus, the question as proposed to the extent of seeking to include M/s. Syngene International P Ltd in the list of comparable, does not give rise to any substantial question of law.
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