TMI Blog2018 (4) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... lation to the assessment year 2008-09. 2. The first issue raised in the assessee s appeal is against the confirmation of transfer pricing addition in the international transaction of Rendering of marketing support services. 3. Briefly stated, the facts of the case are that the assessee is engaged in manufacture, distribution and sale of digital switching equipments, cellular exchange equipments and other telecommunication equipments and also in the provision of related services. It also provides intra-group marketing, technical support and contract software development services. The assessee has Trading segment, Manufacturing segment, Technical support services segment, Marketing support services segment and Software development services segment. Return was filed declaring certain international transactions in Form No.3CEB. The Assessing Officer (A.O.) made a reference to the Transfer Pricing Officer (TPO) for determining the arm s length price (ALP) of such international transactions. Instantly, we are concerned with the international transaction of Rendering of Marketing support services whose transacted value was shown at ₹ 21,50,07,391/-. The assessee applied Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalyzed the Annual report of this company, which is available at page 981 onwards of the paper book. From this Report, it can be seen that its Income from operations stands at ₹ 10,51,40,438/-, break-up of which has been given in Schedule 11, as under :- INCOME FROM OPERATIONS Micro Enterprises Development 15,008,500 Skill Development 11,287,965 Entrepreneurship Development 3,479,000 Research Studies 12,622,090 Project related Services 20,164,045 Infrastructure Planning and Development 13,614,966 Environment Management 4,207,748 Energy Related Services 1,624,195 Cluster Development 2,408,000 Technology Facilitation - Asset Reconstruction Management Services 20,193,454 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices . 11. Briefly stated, the facts apropos this issue are that the assessee, under this segment, is engaged in providing technical support services. In this context, the TPO has noted 8 international transactions on pages 2 and 3 of his order. The 8th transaction is of Marketing support services , which we have dealt with above. All the remaining international transactions from Sl.No.1 to 7 are combined under the instant overall international transaction of Technical services . These seven transactions comprise of Receipt/rendition of technical support services including purchase/sale of spare parts in such rendition of technical services. The assessee computed its PLI of this international transaction under TNMM at 7.59% and the mean margin of 11 comparables selected by it at 11.82%. The TPO rejected all the comparables chosen by the assessee and selected six fresh comparables, which have been listed on page 45 of his order. Mean margin of these comparables at 30.19% was taken as benchmark. Applying the same, he worked out the amount of transfer pricing adjustment. The ld. CIT(A) directed to exclude Alphageo India Ltd. from and include TCIL in the final list of comparable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the Annual report of this company, a copy of which has been placed in the paper book. It can be seen from the Director s report that the company provided consultancy services in the areas of Special Economic Zones, water supply and sewage, solid waste management, urban infrastructure, agro infrastructure, social infrastructure, port and harbor and offshore terminal and industrial infrastructure etc. This company also worked on innovative projects like centre of excellence of horticulture, dedicated offshore terminal for coal handling. The above description of the consultancy services rendered by this company divulges that the same are quite diverse in nature. As against this, the assessee is providing services of installation and post-implementation of telecommunication equipments along with after-sales support and maintenance. It is apparent that nature of services rendered by the assessee is quite different from those rendered by Mahindra Consulting Engineers Ltd. The mere nomenclature of rendering Consultancy services does not make two companies comparables. An assessee selling cars cannot be compared with another assessee selling electronics simply on the ground that both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this company from which it emerges that this: company operates mainly in one business segment, viz., engineering consultancy of industrial projects being primary segment and all other activities revolved around the main activity. Thus, it is apparent that this company is engaged in providing Engineering consultancy for industrial projects . As against this, the assessee in appeal is rendering technical support services mainly in installation and commissioning of telecommunication equipments and also providing aftersales support services. Obviously, there can be no match of the technical consultancy services provided by the assessee with those rendered by Semac Ltd. At the cost of repetition, we state that the mere nomenclature of consultancy or professional services does not make two companies comparables. Since the nature of consultancy services provided by the assessee and Semac Ltd. are quite different from each other, we, therefore, hold that this company cannot be included in the list of comparables. 20. Apart from challenging the inclusion of above three companies, the assessee has also assailed non-inclusion of the following two companies:- ( i) Intarvo Techno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agement service domain. The assessee is not into any research and development activities. These factors makes Microland Ltd. incomparable to the assessee company. The impugned order is upheld on this score. 25. The Department in its appeal is aggrieved against the exclusion of Alphageo (India) Ltd. After going through the impugned order and the other relevant material, it surfaces that this company is engaged in providing Seismic services to the oil exploration and production sectors. It also provides various services including design and pre-planning of 2D and 3D surface seismic data acquisition, seismic data processing and seismic data interpretation etc. Since the entire spectrum of the services rendered by this company is that of seismic and related services, we hold that the same cannot be considered as comparable with the assessee company. It is, therefore, held that the ld. CIT(A) was justified in excluding this company from the list of comparables. 26. The Department is aggrieved against the inclusion of TCIL. The TPO rejected this company from the list of comparables by noticing that it was undertaking turnkey projects in all fields including consultancy service seg ..... 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