TMI Blog2014 (12) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... main fields of specialization of this company covered irrigation of drainage, flood control and Land Reclamation, River management dams, Reservoir Engineering and Barrages, Integrated Agriculture development, Watershed management, Hydropower and Thermal Power Generation, Power Transmission and Distribution , Rural Electrification, Ground Water Exploration, Minor irrigation etc - I.T.A. No. 193/Mum/2013 - - - Dated:- 10-12-2014 - <!--[if gte mso 9]> <![endif]--> <!--[if gte mso 9]> Normal 0 false false false EN-IN X-NONE <![endif]--><!--[if gte mso 9]> ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(3) r.w. Sec. 144(3) was passed on 26.12.2011. The objections were raised by the assessee u/s. 144C(2) before the Dispute Resolution Panel (DRP). The DRP issued directions u/s. 144C(5) dt. 25.9.2012. Consequent to the directions by the DRP, the assessment was completed. 2.1. During the year, the assessee had, inter alia, entered into an international transaction of rendering advisory and support services to its AEs for which it was compensated at cost plus 10%. During the course of the assessment proceedings, the Assessing Officer referred the computation of arm s length price (ALP) of the international transactions to the Transfer Pricing Officer (TPO). 2.2. In its TP study report, the assessee had benchmarked its international transaction by computing arm s length margin for provision of advisory and support services by taking following comparables into consideration: Company name Mar-06 Mar-07 Mar-08 Weighted average Agrima Consultants International Ltd. -8.62 0.69 - -3.46 Apollo S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 2. Educational Consultants India ltd. Appellant 1.87 3. ICRA Management Consulting Services ltd Appellant 4.18 4. NTPC Electric Supply Ltd Appellant 39.21 5. IDC (India) Ltd TPO 15.48 6. Indus Technical Financial Consultants Ltd. TPO 14.56 7. Rites Ltd. (Seg) TPO 25.77 8. Technicom-Chemie (India)Ltd TPO 7.33 9. Water Power Consultancy Services (India) Ltd. (Seg) TPO 40.37 Average 20.12 3. Aggrieved by the inclusion of company s mentioned at S. No. 1, 4, 7 9 hereinabove, the assessee raised objection before the DRP. It was contended before the DRP tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TPC Electric Supply Ltd The profile of this company show that it is a wholly owned subsidiary of NTPC Ltd which in turn is a Government owned company making this company also under the category of Public Sector Undertakings. Further M/s. NTPC is a Government of India enterprise and is involved in enhancing and bringing sectoral reforms process and has been participating in various projects of distribution, infrastructural development programmes under consultancy assignments. Further, this company is also engaged in rural electrification on turn-key basis and also engaged in post award project monitoring and supervision of quality work for the project under execution. Considering all these facts, this company is not functionally comparable. It is therefore directed to exclude this company from the final list of comparables. 8. It would be pertinent here to mention that the above mentioned two companies were considered as comparables by the assessee itself which was subsequently claimed to be excluded from the final list of comparables qua additional ground of appeal. 9. In our considered view, the assessee is not barred for raising a claim of rejection of comparables before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upport of its contention that the case of Goldstone Teleservices Limited was wrongly included by it in the list of comparables, which is actually not comparable. 3) RITES Limited The TPO has considered this company as a comparable which was objected by the assessee as this company had diverse activity. The TPO chose to use the consultancy segment only as a comparable. The assessee objected for this also claiming that this company is providing high end services. This claim of the assessee did not find any favour and the company was considered as a comparable. A cursory look at the business performance of the company shows that this company has been awarded prestigious assignments of advisory consultancy services for Taj Expressway from Greater Noida to Agra, General consultancy for Bangalore Metro, detailed engineering of MUTP phase-II work for MRVC, PMC for upgradation of Railway infrastructure in Rourkela steel plant, Rehabilitation of 290 BOXN wagons of East Coast Railway and training of 360 supervisors of Indian Railways. In the consultancy services segment also, this company is engaged in providing high end/engineering/consultancy services, mainly in the infrastructure s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L, Rites, Wapsos and TCE are engineering companies and provide end to end solutions and therefore they cannot be compared with those assessee who were into providing marketing support services to the parent company. They were held to be functionally not comparable with the engineering companies. The case of Vapi also falls on the same footing. Therefore, respectfully following the order of the ITAT in the cases of MCI Com India (P.) Ltd. and Verizon India (P.) Ltd. (supra) and Estel in ITA no. 584/Banglore/06 we are of the view that Vapi and WAPCOS are functionally not comparable to the assessee. Therefore, they are to be excluded. 11. Considering the functional analysis of this company discussed hereinabove, in the light of the decision of the Tribunal (supra), we direct for the exclusion of this company from the final list of comparables. 12. To complete the adjudication, 9 companies were selected in the final list of comparables out of which we have excluded 4 companies from the final list of comparables. The remaining 5 companies are as under: Sr. No. Comparable OP/TC without WC Adj. (%) 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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