TMI Blog2015 (4) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... d to and vested in Mold Tek Technologies Limited w.e.f.1.10.2006. In our considered opinion, this is definitely an extraordinary event which make this company excluded from final list of comparables on similar lines as discussed by us in the case of Eclerx Services Ltd and the same judicial decision as considered in the case of Eclerx Services Ltd. - The appeal filed by assessee is allowed. Short credit of TDS - In our considered opinion, this issue needs to be verified at the assessment level. We, therefore, restore this issue to the file of AO. The AO is directed to grant credit for the TDS as per TDS certificate furnished by the assessee in the light of the provisions of law. This ground is treated as allowed for statistical purposes. Interest u/s 234B and 234C of the Income Tax Act - In our humble opinion charging of interest is mandatory though consequential in this case. The AO is directed to levy interest as per the provisions of law. - Decided partly in favour of assessee. - I.T.A. No.6969/Mum/2012 - - - Dated:- 6-2-2015 - SHRI JOGINDER SINGH AND N. K. BILLAIYA, JJ. For The Assessee : Shri Arvind Sonde For The Revenue : Shri N K Chand ORDER PE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee benchmarked these transactions using TNMM as the most appropriate method and operating profit to total cost was taken as the appropriate Profit Level Indicator (PLI). The assessee identified 12 comparables using data for FY 2005-06, 2006-07 and 2007-08. The mean average was determined at 15.94% which is lower than that of the assessee at 18.36%. The TPO noticed that the assessee has used Multiple Year Data, therefore, the assessee was asked to update the margin of the comparable companies using financial data for FY 2007-08 only. The assessee filed updated margins of the comparable companies. The mean average of which worked out at 12.42%. The TPO noticed that search process of the assessee does not capture many market players close to the functions of the company. Secondly, as this industry segment is having very positive growth including the assessee, the inclusion of the heavy loss making companies does not reflect the actual scenario prevailing. 4. The TPO undertook fresh search on Capitaline Plus and Prowess Databases.The TPO listed 21 comparables. The average of which was determined at 29.25%. The assessee was asked to show cause as to why the Arm s Length Mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23.81% 21 Wipro Ltd (Seg) 30.05% 22 Firstsource Solutions Ltd 15.25% 23 Transworks Information Services Ltd 2.20% 24 vCustomer Serices India Private Limited 11.62% 25 Vishal Information technologies Ltd 51.79% Average 27.8% The average was determined at 27.8%. (1) While using these comparables, the important filters applied by the TPO were (1) use of relevant Financial Year Data; (2) the companies with the turnover of less than ₹ 1 crore were rejected; (3) the companies having more than 75% of the operating revenue from ITES have been selected; (4) Companies with less than 75% earning from export were rejected; (5) companies having more than 25% of related party transactions were rejected. 5. The assessee strongly raised objections before the Dispute Resolution Panel (DRP). The main objection was (i) the TPO ought to have used multiple year d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-Trib) has followed the decision of Hyderabad Bench in the case of Capital IQ Information Systems (India) Pvt.Ltd 25 ITR (T) 185, wherein the Tribunal has held that extraordinary event occurred during the previous year makes the company incomparable. As mentioned hereinabove, the extraordinary even has taken place in the case of Eclerx Services Ltd which excludes this company as a comparable. We, therefore, hold that this company cannot be considered as comparable. The similar view was taken by the Mumbai Bench of the Tribunal in the case of Stream International Services Pvt.Ltd V/s ACIT in ITA No.8290/Mum/2010 (AY-2007-08) dated 10.10.2014 at page 7 para 4 of the order and also the decision of Hyderabad Bench of the Tribunal in the case of M/s Hyndai Motors India V/s DCIT in ITA No.255/Hyd/2014 (AY-2009-10) dated 31.7.2014 on page 16 at para 16. Considering the facts of the case, and in the light of the judicial pronouncements mentioned hereinabove, we direct for the exclusion of this company from the final list of comparables. 8. The second company is Mold-Tek Technologies Ltd. The annual report of this company is exhibited at pages 338 to 424 of the paper book. At page 348 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
