9911796707
TMI Blog2017 (4) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... only issue raised in this appeal is against the addition on account of transfer pricing adjustment. 3. Briefly stated, the facts of the case are that the Travel Security Group (TSS, UK) is a joint venture between Control Risks Group (a UK based security services firm) and Blue Cross Travel Services B.V. (an International SOS group company). TSS UK provides a comprehensive corporate security programme catering to its clients. The corporate security programme involves travel security services for international travelers and expatriates including analysis, assistance and consultancy. TSS UK's clients comprise of multinational corporations, Government and non-Government organizations across the world. The services provided by TSS UK comprise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (OP/TC). 13 comparable companies were chosen by the assessee with their average OP/TC at 5.99%, which was less than the assessee's OP/TC at 6.16%. That is how, the assessee claimed that its international transaction was at arm's length price (ALP). The TPO did not dispute the application of TNMM as the most appropriate method and also the PLI. He, however, shortlisted seven companies as comparable and determined their average OP/TC at 26.52%, which led to proposing a transfer pricing adjustment of Rs. 92,95,316. Aggrieved with the draft order of the AO containing addition for such an amount, the assessee approached the Dispute Resolution Panel (DRP), which excluded two companies from the TPO's list. Thus, in all, five companies were retaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is manifest that the assessee, in a nutshell, is engaged in providing travel security services. With the above understanding of the functional profile of the assessee, let us examine the comparability or otherwise of the above referred two companies in seriatim. (i) Apitco Ltd. 8. The TPO proposed the inclusion of this company which was objected to by the assessee. It was stated that this company was primarily engaged in providing high end consultancy services by preparing project feasibility reports and carrying out market/other service and, hence, functionally different. The TPO refused to accept the assessee's contention and eventually included it in the list of comparables. No relief was allowed by the DRP. 9. We have heard both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Under such circumstances, we fail to appreciate as to how all the above listed services undertaken by this company as one unit can be considered as comparable with the tourists' safety services provided by the assessee. 11. The ld. DR strenuously argued that all the activities done by this company are basically `Business services' and the assessee is also rendering business services. He submitted that differentiation of functions in the overall `Business services' umbrella is taken care of under the TNMM. He harped on the contention that there is no requirement to have identical services for the purpose of making comparison under the TNMM. 12. We are unable to accept this argument in view of the judgment of the Hon'ble jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nables it to handle any large, voluminous, time bound processing activities requiring meeting of stringent quality and service standards in a regulatory environment. Details of products and services provided by this company, as disclosed on its website, are as under : - "Payroll & Employees' Trust Fund Administration & Management - All the activities normally handled by "Payroll and Retirement Funds" Section in the Organization, including interface with Regulatory Authorities, are taken over by us. Record Management - * Storage. Retention & Retrieval of Physical and/or Electronic Records Registrar & Transfer Agents for- * Equity and Preference shares. * Debenture Instruments and Bonds * Commercial Paper and Private Placements * ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e file of AO/TPO for fresh determination of the ALP of the international transaction in consonance with our above directions. Needless to say, the assessee will be allowed a reasonable opportunity of being heard in such fresh proceedings. 18. Before parting with this appeal, we want to record that the ld. DR vehemently argued that the companies included by the assessee in the list of comparables are also functionally dissimilar and, hence, those should also be excluded. This was submitted in the background of the above referred two companies, namely, Apitco Ltd. and TSR Darashaw Limited., which, in his opinion, were also not functionally similar. It was however stated that the assessee in the transfer pricing study report has itself admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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