9911796707
TMI Blog2017 (7) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... in the circumstances of the case and in law, the order passed by the Ld. Assessing Officer ("Ld. AO") under section 143(3) read with section 144C of the Act is bad in law. 2. That the reference made by the Ld AO suffers from jurisdictional error as the Ld AO has not recorded any reasons in the draft assessment order based on which he reached the conclusion that it was 'necessary or expedient' to refer the matter to the Additional Director of Income Tax, Transfer Pricing Officer-II(1), New Delhi ('Ld TPO') for computation of the Arm's Length Price ('ALP'), as is required under section 92CA(1) of the Income Tax Act, 1961 ('the Act'). 3. That on the facts and in circumstances of the case and in law, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant on a scientific basis, even though they are comparable to the appellant in terms of functions performed, assets employed and risks assumed to arrive at the final set of comparable companies to determine the arm's length price. 6.2. denying the benefit of risk adjustment by completely ignoring the business/ commercial reality that since the appellant is remunerated on an arm's length cost plus basis i.e. it is compensated for all its cost plus an agreed mark up, the appellant undertakes minimal business risks as against comparable companies that are full fledged risk taking entities and instead carried out its own risk analysis of the appellant on the basis of conjunctures and surmises. 6.3. denying the benefit of ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome at Rs. 1,14,47,127/-. In the revised return the assessee offered prior period income and also claimed expenses on account of trade claim and prior period expense. The case was selected for scrutiny. The assessee is a branch office of the Philip Morris Services India S.A. incorporated in Switzerland and was engaged in import and distribution of Marlbore Brand of cigarette in India. It also provided marketing support services to its various group companies. Besides this, it was also involved in the export of tobacco leaves to its group companies. During the course of assessment proceedings, the AO noticed that the assessee was involved in the following international transactions with its Associated Enterprises (AEs): S. No. Nature of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30/Del/2010 for the assessment year 2006-07 in assessee's own case vide order dated 26.08.2016. He made the reference to para 2.5 at page nos. 14 to 16 of the order dated 26.08.2016 and stated that the ITAT in the preceding year has directed to include the comparable M/s Agrima Consultants International Ltd. and to exclude the comparable M/s IDC India Ltd. and M/s Empire Industries Ltd. It was contented that since the facts for the year under consideration and the preceding year are similar, therefore, by following the earlier order dated 26.08.2016 of this Bench of the ITAT for the preceding year in assessee's own case, the same course to be adopted. It was stated that if the aforesaid company i.e. M/s Agrima Consultants International Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Ltd. in the list of the comparable. On the issue as to whether these companies are to be included/excluded, the relevant findings have been given by this bench of the ITAT at pages no. 14 to 16 of the order dated 26.08.2016 which read as under: "4. Agrima Consultant International Ltd.: This company was included by the assessee and excluded by Ld. TPO on the basis that this company is showing a negative economic trend. Ld. A.R. submitted that the turnover of this company is Rs. 1.05 crores while the assessee has a turnover of Rs. 3.18 crores. Ld. A.R. submitted that from the annual accounts placed at pages 51-55, the company was carrying on with the activities of preparation of feasibility report in respect of cement grinding plant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Tribunal in the case of Microsoft Corporation India Pvt. Ltd. VS DCIT in I.T.A. No. 5766/Del/2011 wherein this company has been characterized as an information technology, research and advisory firm. Further, it has been held that his company earns its income in the form of research and survey. 5.1 We have perused the above details placed in the Paper Book and the judgements relied upon by the Ld. A.R. It is also observed from the functional profile that this company is in the knowledge process outsourcing unit and cannot be compared with the back office support services carried by the assessee. Respectfully following the ratio laid down by Hon'ble Delhi High Court in the case of Rampgreen Solutions Pvt. Ltd. Vs CIT (supra), we ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
