TMI Blog2016 (7) TMI 1326X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in making an addition of INR 25,92,72,701/- to the returned income of the Appellant by re-computing the arm's length price of the international transactions pertaining to all three segments of the Appellant, viz. engineering design and related services ( EDS ), financial accounting support services ( FAS ) and IT infrastructure support services ( IT Infra ), under section 92 of the Act. Thus, in passing the order, the Ld. AO / Ld. TPO / Ld. DRP erred in: 1.1. Rejecting the comparable companies selected by the Appellant in its transfer pricing documentation on the basis of additional/modified quantitative filters which lacked valid and sufficient reasoning; 1.2. Accepting companies which were functionally not comparable to the Appellant; 1.3. Including government held enterprises and enterprises associated with government as comparables to the Appellant; 1.4. Not considering the correct computation of/operating margins of certain comparables; 1.5. Denying the benefit of economic adjustments on account of difference in risk profile in arriving at the arm's length margin; 1.6. Accepting high turnover companies and thereby ignoring the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd interest rate while computing the addition; and 5.2. completely disregarding the detailed submissions explaining that such adjustments are not mandated under the facts and circumstances of the case. 6. That the Ld. AO has erred in charging interest under section 234B and 234C of the Act amounting to INR 5,16,24,544 and INR 10,61,745 respectively. 7. That on the facts and in the circumstances of the case and in law, the Ld.AO has erred in initiating penalty proceedings under section 271(1)(c) of the Act. The Appellant craves leave to add, amend, alter, delete, rescind, forgo or withdraw any of the above grounds of appeal either before or during the course of the proceedings before the Hon ble Income Tax Appellate Tribunal in the interest of the natural justice. The aforesaid grounds are mutually exclusive and without prejudice to each other. 2. The relevant facts of the case are that the assessee incorporated on 21.04.1994 is a wholly owned subsidiary of Bechtel Corporation USA. During the year, the assessee company was engaged in the business of export of customized electronic data in the form of designs, drawings, calculations and other relevant da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee to carry out a fresh search. Rejecting 7 out of the 11 comparables offered by the assessee in the fresh search he introduced a few more and considering the average OP/TC of 30.19% of the following 18 comparables held that the adjustment for arm s length price was warranted:- S. No. Company Name OP/ TC (%)* 1. Acropetal Technologies Ltd (Engineering Design Services seg) 14.26% 2. Ashok Leyland Project Services Limited 24.70% 3. Bengal SREI Infrastructure Development Ltd 42.14% 4. Cades Digitech Pvt. Ltd. 5.78% 5. Certification Engineers international Ltd 78.45% 6. Global Procurement Consultants Limited 30.86% 7. Gujarat Industrial Technical Consultancy Org Ltd 7.89% 8. IBI Chematur (Engineering Consultancy) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% 7. TCE E-serve Ltd. 69.31% 8. Microgenetics Systems Ltd -3.20% Mean 25.98% 5. Considering the benchmarking of Infrastructure Support Service Segment the TPO accepting the assessee s approach of taking TNMM as the most appropriate method and also accepting the PLI of OP/TC rejected the assessee s claim that the transaction was at arm s length price. The TP study in regard to average PLI of 12.57% of the 5 comparables selected when compared to assessee s OP/TC of 18.32% was rejected. The assessee s OP/TC margin was again recalculated and the assessee was required to carry out a fresh search. 5.1. Rejecting all the 5 comparables so offered in the fresh search, the TPO selected the following final list of comparable having OP/TC of 23.55% to hold that the transaction was not at arm s length: - S.No. Company Name OP/TC (%)* 1. Acropetal Technologies Ltd. (Information Technology services segment) 22.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted then following position would emerge:- S. No. Nature of international transaction Tested Party's margin as per segmental redrawn by The Ld.TPO Arm's length margin determined by ld.TPO Adjustment u/s 92CA 1. Provision of EDS 8.98% 30.19% 27,39,32,965 2. Provision of FAS services 10.52% 25.98% 70,84,259 3. Provision of IT Infra services 14.32% 23.55% 1,21,12,787 4. Receivables N.A. N.A. 33,16,088 Total 29,64,46,099 6.2. It was submitted that the above computation has not been computed by the TPO, as it has been computed on the basis of the margins of the other 2 segments. The said issue was stated to be pending before the Assessing Officer by way of recti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.6. These issues it was submitted were carried before the DRP. Inviting attention to the synopsis filed it was submitted that the DRP qua the EDS segment directed the exclusion of the following comparables:- - Ashok Leyland Project Services Ltd. - Bengal SRE1 Infrastructure Development Ltd. - NTPC Electric Supply Company Ltd. - Pallavan Transport Consultancy Services Ltd. 6.7. The DRP also directed the inclusion of a comparable selected by the assessee -Arvind Accel Limited. 6.8. Considering the FAS and IT infra support services: it was submitted the DRP accepted the approach and the comparable selected by the TPO . 6.9. It was submitted that the DRP also directed the TPO to provide working capital adjustment. However, risk adjustment was denied to the assessee. 6.10. Referring to internal page 37 of the DRP s order it was submitted that the DRP directed the TPO to consistently apply the segment results for all the three segments which direction has not been carried out. The relevant extract relied upon is reproduced hereunder:- 4.7. ALLOCATION OF OVERHEAD COSTS In his order, the TPO has reproduced the show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat Industrial Technical Consultancy Org Ltd 8.67% 8. IBI Chematur (Engineering Consultancy) Ltd 26.87% 9. Indus Technical Financial Consultants Ltd 10.63% 10. Mahindra Consultants Engineers Ltd 30.32% 11. Mitcon Consultancy Engineer Services Ltd 43.58% 12. REC Power Distribution Co. Ltd. 31.00% 13. Rites Ltd. 58.27% 14. Usha Hydro Dynamics Ltd 25.40% 15. Arvind Accel Ltd. 2.47% Mean 27.56% 7.1. The grievance of the assessee in the present proceedings, it was submitted persists qua 9 of the comparables which have been mentioned at serial No. 2, 3, 5, 6, 8, 11, 12, 13 and 14 in the above table. 7.2. In the said background, inviting attent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for AY 2004- 05 and AY 2005-06 (ITA No.1476/Del/2015 and ITA No.1477/Del/2015) (refer page 521 and 522 for AY 2004-05; 535 and 536 for AY 2005-06 of the paperbook for order of the Hon ble ITAT) - Government undertaking - Functionally dissimilar-provides consultancy in various areas such as airport, transport, highways, industrial engineering, port and water resources, among others. - Cost of sales includes cost of finished goods. (refer page nos.125 to 132 of the appeal set for submission filed before the Ld.DRP). 3. Kitco Ltd. (OP/TC=28.79%) - Rejected in Appellant own case for AY 2010- 11 (ITA No.1478/Del/2015) [refer page 614 to 616 of the paper book for order of the Hon ble ITAT] - Government undertaking. - The company is rendering services majorly to the government or government owned enterprises. 4. TCE C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this comparable was also sought on the basis of past precedent in assessee s own case. 7.5. Apart from the above six comparables as having been wrongly selected by the TPO and retained by the DRP, the exclusion of REC Power Distribution Company Limited it was submitted is sought on similar reasoning namely that it is a wholly owned subsidiary of REC Ltd. a Navratna CPSE under Ministry of Power. REC Ltd. it was submitted 60% holding therein was by the state and central governments as per information available on the site of (www.moneycontrol.com). Referring to the Objections before the DRP and the synopsis filed it was submitted it is not only functionally dissimilar but even the annual report would show that qua the activities of develop, construct, own, operate, distribute and maintain 66 KV and below voltage class electrification/distribution electric supply lines/Distribution System. No segmentation was available - (http://www.indiamart.com/recpower-distribution/aboutus.html) (annual report). The said company it was submitted has no segmentation for the services of Inspection and Consultancy provided. The services provided range from Third party Inspection of works and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be excluded. Reliance was also placed on the ruling of M/s ThyssenKrupp Industries India Private Limited ITA No. 6460/Mum/2012 where the following was held: We find it as undisputed that Engineers India Limited is a Government company. It has several segments which also include 'Turnkey project', page 700 of the paper book is a copy of annual report of Engineers India Limited on turnkey project. It can be seen that the revenue has arisen from completing paraxylene plant of IOCL and further that company is engaged in execution of other unit of IOCL's Panipat Naphtha cracker project. In our considered opinion' this case should not have been included in the list of final comparables for two reasons. First reason is that profit motive is not a relevant consideration in case of Government undertakings. Many Government Undertakings even operate on losses in furtherance of the social obligations of the government. The second reason is that Engineers India Limited earned income from turnkey project by successfully completing the project of IOCL and other Public Sector Undertakings. In that sense of the matter, the related party transactions are much more than the filt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (refer page nos.111 to 114 of the appeal set for the submission filed before the Ld.DRP) 3 Global Procurement Consultants Limited (OP/TC=29.32%) (refer page no.291 of the appeal set for the Ld. DRP directions) - Government affiliate company - Functionally dissimilar: Engaged in diversified assignments related to valuation, consultancy and financial advisory services. (refer page nos.104 to 107 of the appeal set for the submission filed before the Ld.DRP) 7.7. The exclusion of the following 3 comparables companies was sought on the ground that these companies were palpably different from the Engineering Design Segment of the assessee:- S. No. Company selected in the final order Appellant's contentions 1. Usha Hydro Dynamics Ltd. (OP/TC=25.40%) (refer page no.293 of the appeal set for Ld.DRP directions) - Engaged in the business of cleaning of various machines and equipment for various industries - Also engaged in trading activities. (refer page no.122 of the appeal set for the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mean 11.11% 8. The Ld. Sr. DR on the other hand vehemently argued for retaining the comparables. It was his submission that in the method like TNMM as long as broad comparability is established then exclusion on micro differences cannot be argued. The selectively picking apart the list of comparable it was submitted should not be allowed. 8.1. Addressing the specific objections it was his submission that government owned enterprises or enterprises affiliated with government projects should not be excluded. It was his argument that admittedly the government companies are entrusted with works in areas where due to huge unprofitable costs the private enterprise does not want to enter thus the argument for their exclusion it was submitted is without any basis. The work entrusted to these government companies it was submitted admittedly is not profit driven as the aim is development and social benefits. Thus the inclusion of these companies where their creation and functioning is only motivated by development agenda and if, even then they are able to show a profit then by no standards they should be considered for exclusion. The assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon. 9. The Ld. AR in reply fairy conceded that the exclusion of Kitco Ltd. was requested for, for the first time before the ITAT in the facts of the present case. However, inviting attention to the order of the ITAT in 2010 11 assessment year order dated 21.12.2015 in ITA No. 1478/Del/2015, it was submitted that the position was identical in the facts of that case also. Inviting attention to the copy of the said order filed in the paper book, it was submitted that the exclusion of the said comparable was sought for the first time before the ITAT and it was allowed. Accordingly it is only on the basis of the said precedent that this prayer has been made. The relevant extract from the order of the Co-ordinate Bench at internal page 9 to 11 of 2010-11 AY is reproduced hereunder for ready-reference:- KITCO LTD. 12.1. The company was established in 1972 by Industrial Development Bank of India, other national and state level financial institutions, Government of Kerala and 7 public sector banks for rendering services to government departments, public sector undertakings ( PSU s ), local bodies, entrepreneurs, etc. The company s main functions are to render professi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sses in furtherance of the social obligations of the government. The second reason is that Engineers India Limited earned income from turnkey project by successfully completing the project of IOCL and other Public Sector Undertakings. In that sense of the matter, the related party transactions are much more than the filter of 25%. We, therefore, order for the exclusion of this case from the list of comparables. [Emphasis Supplied] 12.5. In the above ruling, the comparable M/s. Engineers India Limited was rejected primarily on the ground that it was working for government/public sector undertakings and since the company also being a government owned enterprise; the transactions tantamount to related party transactions. The same is true for the said comparable as Kitco Ltd., transactions are primarily with government owned enterprises. Applying the preposition laid down in the case of M/s ThyssenKrupp Industries India Private Limited (supra), we hold that Kitco Ltd., cannot be accepted as a comparable company. Hence the same is directed to be eliminated. 10. Not convinced with the argument the Ld.CIT DR submitted that the fact that its exclusion was agitated before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was asked to file a copy of the agreements with its AEs regarding the services rendered. The assessee has filed a copy of its Global Masters Services Agreement. This agreement contains the following information regarding services rendered: Scope of Services means the description of the Services to be performed and the deliverables to be provided by BIPL as set out in a Work Order and any agreed variations. Services means the services provided or to be provided by BIPL as set out in the Scope of Services of a Work Order and any agreed variation....... Work Order means a project-specific agreement under which BIPL will perform Services for a Bechtel Company, containing a Scope of Services, Schedule of Charges, schedule of performance, and other applicable terms as executed by BIPL and BCorp in accordance with the provisions of clause 2 thereof, 2. WORK ORDERS - 2.1 When a Bechtel Company wishes to engage BIPL to perform certain engineering design services in connection with a particular project, such Bechtel Company will submit to BIPL a description of the desired Services and applicable Prime Contract requirements in sufficient detail so that BIPL can prep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... associated group companies engaged in different projects. Engineering personnel work in a completely automated environment using the latest Computer Aided Design ('CAD') and 3D modeling software, integrating the Group's global, and multibusiness engineering expertise through dedicated WAN link. BIPL is an ISO 9001: 2OOO company. BIPL primarily provides technical support services in respect of engineering design and drawings to other group entities both within and outside India. It also provides IT infrastructure and financial and accounting support services to its group entities. (iii) As a part of its business operations, BIPL provides engineering design and related services which are closely linked with the performance of engineering, construction and turnkey project execution industry. Companies seeking finance to build large facilities such as power plants, refineries, and steel mills are generally required by the debt providers or equity investors to obtain a lump sum turnkey engineering, procurement, and construction contract with a credit-worthy contractor having satisfactory industry-related experience and capabilities. Such a contractor is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serves to be allowed. We find that though the arguments advanced by the Ld.CIT DR appear to be convincing however in the face of the facts and submissions considered in the precedent cited, we find that the assessee has established that those comparables which had Government holdings/affiliated or controlled enjoyed preferential treatment in obtaining contracts or benefits derived out of the parental relation which fact successfully establishes the impact of these facts on the net profitability of the government owned/controlled or affiliated companies. Thus these companies cannot be said to indicative of a comparable operating in a free market economy. Thus, there is strong justification for their exclusion from the list of comparable companies. Accordingly the exclusion of such comparable companies from the list of comparable companies on facts is found to be justified. 12.3. Having so said, we find that when out of the total 15 comparables considered post DRP, exclusion of six is sought on the grounds of past precedent and on the ground that these companies affiliated/owned or controlled by the government need to be excluded it castes a doubt on the process of selection and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces etc. cannot be said to be companies comparable to an assessee who operates in free market conditions. Thus, ideally such companies should never have been selected. Similarly companies trading in products and goods or providing vocational training as government affiliates also cannot be said to be functionally similar to EPC. These issues are well settled by now and selection contrary to this settled position admittedly either by way of proposal by the assessee or by way of retention/selection by the TPO was not correct. In support of the parties, we take note of the fact that at the time of preparation of the Transfer Pricing study or passing of the TPO s order on 29.01.2015 the assessee and the TPO did not have the benefit of the judicial precedent in assessee s own case which is heavily relied upon by the Ld.AR. Let alone the TPO even the DRP or the AO at the stage of final assessment order did not have the benefit of these orders as the order of the ITAT in 2004 05 AY is dated 20.11.2015; in 2005 06 AY it is dated 23.09.2015 and the order for 2009 10 AY is dated 14.10.2015 and in 2010-11 AY it is pronounced on 27.12.2015. The order of the TPO on the other hand is dated 29.01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even otherwise, we find in the peculiar facts of the case that in view of the decision taken the issue is not required to be addressed at this stage. Suffice it to say that if it all any working capital adjustments or risk adjustments in the comparables proposed by the TPO is warranted the taxpayer should be able to support its claim by way of justifying the extent of adjustments requested as the law contemplates that adjustment is to be requested for by the assessee and supported by way of placing necessary justification in support of its prayer. 12.7. Accordingly, in view of the above detailed reasoning on facts addressing the various peculiar facts and circumstances of the case it is deemed appropriate to restore the issue back to the TPO to decide the same afresh by way of a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. 13. Addressing the Financial Accounting Support Service Segment, we find that the TPO rejected 4 out of the 9 comparables proposed by the taxpayer and ultimately adopted 8 comparables having an OP/TC of 25.98% which compared with the recomputed OP/TC of 21.57% compared to assessee s original OP/TC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the authorities below, no distinguishable fact or circumstance was brought to the notice of the Bench. 15. Considering the submission of the parties before the Bench, we deem it appropriate to first address the functional profile of the assessee on the basis of record. We find that the same has been addressed in internal pages 38 and 39 of the DRP holding that the assessee is a high end KPO in this segment. The relevant extract is reproduced hereunder:- 5.1 FUNCTIONAL PROFILE 1) Before considering the appropriateness of the comparables used, it is necessary to consider the functional profile of the assessee, The assessee's TP study gives the following information about the assessee in this segment: BIPL is also engaged in providing financial and accounting support services to its Group entities. Within this segment, the company primarily performs services related to accounts payable management, payroll processing, invoice processing, making payment to suppliers and the handling of related queries. Its functions are broadly outlined as under: Invoice processing: Under this process, scanned invoices raised on Bechtel Group Companies are p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be a high end KPO:- 13.2. In the FA segment, the functions of the appellant company are, invoice processing, help desk support, account closing and management reporting, tax advisory services, management of fund. The assessee contended that the Ld.TPO/DRP has accepted certain comparables, which perform altogether different functions as compared to assessee s FAS and IT infra segment, and have extra-ordinary circumstances based on which they should not be included. 15.2. Accordingly we find that reliance placed on the following finding is of no relevance:- 13.3. We would now examine each of the comparable company in dispute to arrive at a conclusion. Comparables included by the Ld.TPO/DRP but disputed by the assessee: 1) TCS E-Serve International Limited TCS E-serve Limited This company has been selected by the ld.TPO as a comparable. This company undertakes, customer service, transaction processes, collections, risk management, and analytics, and has created a lot of applications which are in the nature of intellectual property in terms of reconciliation software, fund transfers, etc. The company also undertakes software testing and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t where the assessee s profile was taken as low end ITeS and not a high end KPO as in the case at hand is of no help. The finding of facts arrived at on record has not been assailed by way of any argument. 15.4. Similarly we find that the arguments for exclusion of Eclerx Services Ltd. in the face of the functional profile qua this segment of the assessee as that of a high end KPO remaining unassailed on record. We find that reliance placed on the decision of the Jurisdictional High Court in the case of Rampgreen Solutions is not of much help. A KPO is understood as the higher end of ITeS in terms of value addition. ITeS encompasses a wide spectrum of services that use Information Technology based delivery which could include rendering highly technical services by qualified technical personnel involving advanced skills and knowledge, such as engineering, design and support. Whereas on the other end of the spectrum ITeS would also include voice based call centres that render routine customer support for their clients as were the facts before the Hon ble High Court. In view thereof, we find that the prayer of the assessee cannot be allowed. 15.5. Considering the arguments for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative technology; that there is significant advertisement and marketing expenditures resulting in non-routine marketing intangibles; ownership of branded/proprietary products like Finacle; Infosys Active Desk, ;Infosys iProwe; Infosys mConnect and diversify product portfolio; incomparable scale of operations the various grounds on the basis of which the said comparable has been rejected in various rulings of the ITAT. (ii) The exclusion of Wipro Technologies Services Ltd. is sought on the grounds of extraordinary circumstances resulting on account of an overall business deal when Citi Technology Services Ltd was acquired by Wipro Ltd during January 2009 as a result of which Wipro Ltd signed a Master Service Agreement with Citigroup for the delivery of services for a period of 6 years with guaranteed Revenue of US dollars 500 million. Accordingly, it has been argued that regardless of the cost incurred/services performed by WTI is minimum guaranteed revenue of US dollars 500 million has to flow from Citigroup companies to WTS which it has been stated can lead to abnormally high profit margins for WTS. Accordingly the business model of WTS was stated to be very different from that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by placing reliance on various orders of the ITAT and the submissions filed before the DRP. 18.1. The Ld. AR has submitted that in case the prayer of the assessee is accepted and the 7 comparables as requested are excluded then the OP/TC of the following remaining 12 comparables would be 15.50% and would be well within the OP/TC of 14.14% or 18.06% if redrawn segmental account is considered:- Sl.No. Company Name WC adjusted OP/TC 1. Akshay Software Technologies Limited 2.68% 2. Celstream Technologies Private Limited 14.35% 3. Evoke Technologies Private Ltd. 9.36% 4. Igate Global Solutions LTd. 23.93% 5. Larsen Turbo Infotech Ltd. 19.50% 6. LGS Global Ltd. 12.42% 7. Mindtree Ltd. 10.29% 8. Persistent Systems Solutions Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Physical security, Network security, Risk management, 'and Regular administration. For this function, the Group Companies specify the basic requirements and BlPL is responsible for undertaking the routine activities in line with the same. The details of the services performed by BIPL with respect to IT infrastructure support services are given below: Monitoring Services: Remote monitoring and management of the Windows based servers and machines, Network Services: Remote monitoring and management of the various network components like routers, switches, firewalls; Messaging Services: Managing the mailboxes and user accounts including the servers like Lotus Notes, etc; Base Administration: Maintaining the various databases and carrying out administration activities; Net-work Services: BIPL provides a-*variety of network services to help Group Companies share information more effectively. It enables the Group Companies to enjoy greater mobility and real-time data access, extend and leverage existing infrastructure and enhance service delivery with the help of wireless services. It also provides t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebuttal either on facts or law qua the prayer for exclusion of the said company has been advanced by the Revenue. Considering the facts and arguments this comparable is directed to be excluded. 20.4. We find that exclusion of Wipro Technologies Ltd. has been requested on the basis of judicial precedent wherein a Master Service Agreement between CITI group with Wipro Technology guaranteeing minimum Revenue of US dollars 500 million for six years has been cited. The Ld.CIT DR has put up a spirited defense so as to argue how the guarantee of minimum Revenue of 500 million US dollars can be said to impact net profits as it only guarantees minimum work upto the extent agreed. It has been his argument that minimum guarantee of a specific amount of Revenue is a matter of fact and how it can impact pricing so as to impact net profitability has to be established and without the said exercise it can not be excluded in a method like TNMM. This facet it was argued needs to be established. Considering the overall factual matrix and the precedent cited, we deem it appropriate to restore the issue to the TPO the assessee may demonstrate its claim on facts as whether the aspect has been conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arable accordingly is directed to be retained. 21. The conclusions arrived at have been based on the facts and arguments as placed before the Bench. The conclusions arrived at have been based on admitted facts on record and the specific reasoning for agreeing or disagreeing with the arguments of the parties have been addressed as the issues are fact driven and judicial precedent referred to where facts are not identical though have been considered but reference thereto is refrained from as the conclusions on the issues are fact based, fact driven and fact-ridden. 22. Although, we have already addressed the issue of redrawing the segmental and the issue considering the submissions of the parties has been restored. However, we note that the assessee before us has argued that the reimbursement of expenses received has been routed through the P L account. It has been submitted that the assessee has merely acted as an intermediary between the AEs and the service providers for the administrative convenience and no services have been provided by the assessee in this respect. Reliance has been placed upon the judicial precedent that service providers need not apply a mark-up on reimb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requested for economic adjustments on account of risk adjustment across the comparables vide Ground No.1.5. The said prayer it has been stated has been accepted in the case of assessee by the ITAT in 2004-05 and 2005-06 assessment years. The said issue accordingly is also restored to the TPO directing him to consider the calculation s which the taxpayer may provide for the comparables which are ultimately selected in the fresh search carried out by the parties in the EDA segment and qua the comparables retained in the remaining two segments. 24. Addressing the issue on account of receivables qua which Ground No. 5 read with No. 5.1 and 5.2 has been raised by the taxpayer, we find that reliance has been placed upon the precedent as is available in assessee s case in 2010 11 assessment year. Relying on the same it has been argued that the adjustment on account of receivables has been stated to be deleted. It has been submitted that the ITAT has held that the assessee is a debt free company and that it is not justifiable to presume that borrowed funds would have been utilized to pass on the facility to its AEs. It has been argued that the ITAT relying on Kusum Healthcare Private ..... 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