TMI Blog2011 (1) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... venue as well by the assessee against the order dated 27.02.2009 passed by the learned Commissioner of Income-tax (Appeals) pertaining to the assessment year 2005-06. 2. The assessee company is a public limited company incorporated under the laws of India, engaged in the business of education and providing learning/knowledge solutions, which include developing IT products for sale and providing content development services to its customers. The assessee has operations in various countries across the globe including United States, Netherlands, Malaysia, etc. All overseas NIT Group companies are associated enterprises of the assessee company. In conduct of its business during the year, the assessee company has entered into several internati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise carried out by the assessee, a set of 23 comparable companies was arrived at, with an average OP/TC margin of 10% by the assessee. It was claimed by the assessee that OP/TC margin earned by the assessee at 7.5% being well within the 5% range of the OP/TC margin of comparables. In the Transfer Pricing Study, the assessee also used the financial data of the comparable companies of previous 2 years i.e. Financial Years 2002-03 and 2003-04. However, during the course of TP assessment proceedings, the learned TPO rejected the multiple year data of comparables used by the assessee and proceeded to use the current year financial data i.e. F.Y. 2004-05. In the course of TP assessment proceedings, the learned TPO rejected 4 companies out of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,99,078 and the department is in appeal against the CIT(A)'s order in restricting the adjustment to Rs. 11,99,078 as against Rs. 21,65,004 suggested by the TPO. 7. In the course of hearing of these appeals, the assessee has submitted an application under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963 seeking permission to file additional evidences in support of the grounds taken in the appeal by stating as under : "May it please your Honour: 1. In the captioned appeal preferred by assessee, against the order dated February 27, 2009 passed by the Ld. Commissioner of Income Tax (Appeals)-XX, New Delhi ['Ld. CIT(A)'] under section 250 of the Income-tax Act, 1961, the appellant has raised grounds challenging the inclusion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the light of the aforesaid submission, Hon'ble Bench may, with a view to advance the cause of justice, be pleased to admit these additional evidences to the proceedings under consideration and pass specific order to that effect in this prayer." 8. We have considered the rival submissions of both the parties on the assessee's application made under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963. By way of this application, the assessee has made a prayer to admit additional evidences in the forming of annual reports/data based extracts of the following companies, which were not found available in the public domain at the time of submitting Transfer Pricing study or at the time when the Transfer Pricing assessment was taken by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther all the comparables selected by the assessee are proper comparables for the purpose of determining Arm's Length Price after considering the following factors as per law: (i) Whether the companies have large volume of related party transactions. (ii) Whether companies have abnormally high profits or losses. (iii) Whether companies have gone for business re-structuring. (iv) Whether companies have shown high growth. (v) Whether companies are having high turnover. (vi) Whether companies are having larger inventory. (vii) Whether companies are having high marketing expenses. 11. We further order that the matter shall be decided afresh as per law and after providing reasonable opportunity to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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