Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (9) TMI 683 - ITAT MUMBAITP Adjustment - comparable selection - rejection of government owned companies - HELD THAT:- We are of the considered view that there is no thumb rule not to accept the government company for comparability analysis to benchmark the international transactions merely because of the fact that it is a government company. Each and every comparable is to be examined for comparability on its own facts. So the contention of the Ld. DRP for the Revenue as per ground No. 1 is not sustainable. If the profit & loss account of a government company shows some preferential treatment to the government company, impacting profit only then government company can be excluded. Engineers India Ltd.is into providing certification services, project management services, process design services, engineering services, commissioning services, construction management services, procurement services etc. which is not comparable to the assessee. So the Ld. DRP has rightly rejected this comparable chosen by the Ld. TPO. Mahindra Consulting Engineers Ltd. (MCEL) as a comparable to benchmark the international transactions vis-à-vis the assessee is concerned, it is also functionally dissimilar being into project design and engineering including planning and scheduling statutory and laboratory approvals, procurement advisory, venture evaluation, bid process, project supervision etc. whereas the assessee is providing homeland security solution to their customer. As such the Ld. DRP has rightly excluded MCEL as a comparable vis-à-vis assessee. Tata Consulting Engineers Ltd. (TCEL) is shown to be engaged in integrated engineering consultancy solution including commissioning solutions in construction management, advanced technologies, power, nuclear, infrastructure, industrial, mining, minerals, steels and metals, transportation, water, building, manufacturing, spatial planning, environment etc. again which is not comparable to the assessee who is into providing homeland security solutions to their customers. So the Ld. DRP has rightly excluded TCEL as a comparable vis-à-vis assessee. Adjustment on account of capacity utilization - rationale for adjustment is the difference in the level of capacity utilization between the assessee and the four comparables applied by the Ld. TPO - HELD THAT:- We are of the considered view that these grounds raised by the Revenue are not maintainable as the adjustment on account of capacity utilization has been given by the Ld. TPO himself. So when the adjustment with regard to the idle capacity utilization has been given by the Ld. TPO these grounds raised by the Revenue are not maintainable, hence the ground Nos.4 & 5 are dismissed.
|