TMI Blog2017 (4) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee against the final assessment order dated 30.11.2015 passed by the Assessing Officer (A.O) u/s 143(3) read with section 144C of the Income-tax Act, 1961 (hereinafter also called the Act ) in relation to the Assessment year 2011-12. 2. The 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 serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to the Transfer Pricing Officer (TPO) for determining the ALP of this international transaction. The assessee employed Transactional Net Margin Method (TNMM) as the most appropriate method with Profit Level Indicator (PLI) of Operating Profit/Total cost (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 pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y regional security forecast; Country and risk ratings; Updates on incidents and developments, including evacuation advisories; and Medical alerts, pandemic information services as well as up-to-date reporting on outbreak of medical diseases. From the above nature of services, it 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 servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et reconstruction management services. No segment-wise profitability data of these services is available. The TPO has considered this company as comparable on entity level. We find that there is a little resemblance of the revenue from Tourism Research studies ₹ 41.66 lakh with the overall activities undertaken by the assessee. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RDL is one of India's leading Business Process Outsourcing (BPO) organizations certified under ISO 9001:2008 guidelines having a total industry experience of over 35 years. TSRDL has state-of-the-Art IT capabilities and well trained HR which are the key requirements for handling BPO activities. TSRDL's strength, capabilities and infrastructure enables 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 Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d activities 16. A narration of the foregoing activities undertaken by this company abundantly shows that there are striking dissimilarities with the assessee s tourists safety services. We, therefore, order for the exclusion of this company from the final set of comparables. 17. To sum up, we set aside the impugned order on the issue of addition towards transfer pricing adjustment and remit the matter to the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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