Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 160 - AT - Income TaxTP Adjustment - comparable selection - Functional dissimilarity - HELD THAT:- Kicons Limited - Once it is an admitted fact that this company is engaged in executing contracts relating to solar power projects and other civil activities which are entirely different from the activities and functions carried out by the assessee company. Apart from that, this company is also involved in various other activities like legal, accounting, book-keeping & auditing activities, tax consultancy, market research and public opinion polling services, whereas the assessee company is engaged in business of providing various management and technological solutions in the sector of water & waste management, infrastructure development, oil & gas, transportation, energy, chemicals, master planning and environment services. Thus, on functional dissimilarity, this company cannot be held to be comparable for the purpose of benchmarking the PLI of the assessee, hence we hold that the ld. CIT (A) has rightly excluded the said company from the final set of comparables. Korus Engineering Solutions Limited - What has been referred to is the extract from the website of this company that the company is engaged in the development of steel industry. In absence of any annual report, these services cannot be held to be similar to the services in which assessee has been engaged into. What is available only the functional statement but nowhere management discussion, director's report, etc. were available, hence it is difficult to analyse the FAR of the said company. On this ground alone, this company has rightly been excluded by the ld. CIT (A). Mitcon Consultancy & Engg. Services Ltd. - This company is engaged in providing multiple services, such as, banking & financial solution services, securitisation & financial restructuring services, MITCO e-School and other services which are in the field of textiles, market research, infra consulting, wind power generation, decentralised power generation, projects, energy and carbon consultancy service etc.. This company is deriving revenue from (i) consultancy fees; (ii) vocational training; (iii) IT courses; and (iv) income from laboratories. No doubt, the consultancy fees can considered to be similar to the services rendered by the assessee but in absence of any segmental details, it is difficult to see the profit margin under various streams of revenue. As per Note 41 of the segmental report of the company given in the financial statement, it has two segments viz., consultancy & training and wind power generation. Neither wind power generation nor training segment can be said to be comparable to the services provided by the assessee. Accordingly, we are of the opinion that ld. CIT (A) has rightly excluded this company as comparable from the final set of comparables. - Decided against revenue.
|