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TMI Blog2017 (5) TMI 1588X X X X Extracts X X X X X X X X Extracts X X X X ..... tified in presuming that the margins earned by the government companies cannot be held to be reliable for computation of the Arm"s Length Price ("ALP") of the international transactions involving the Assessee and in that context was the ITAT justified in excluding Apitco Limited as a comparable? 3. The Assessee is a private limited company engaged in the business of providing assistance services to travellers travelling to and from India and foreign nationals residing in India including providing medical services. The Assessee filed its return of income for the AY in question on 30th September, 2009 declaring an income of Rs. 2,00,30,075. The return was picked up for scrutiny. Since the Assessee had undertaken international transactions wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commercial Co. Ltd. from the list of comparables. The AO then passed a final assessment order making an upward adjustment as regards the ALP. 7. The Assessee"s appeal before the ITAT was allowed in part by the impugned order. After discussing the comparables as finally approved by the DRP, the ITAT drew a distinction between 100% government owned companies and private companies and gave its reasons why the government companies would not be appropriate comparables when the ALP of international transaction involving private companies is being examined. The ITAT, therefore, held that ECIL, ITDCL and Apitco being 100% government companies are to be excluded as comparables. The final list of comparables as approved by the ITAT included just fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. Thus, it is not comparable." Interestingly in the present case the Assessee itself picked up two of the 100% government owned companies namely ECIL and ITDCL as its comparables but that was not accepted by the TPO or the DRP. The reason for the ITAT excluding Apitco as a comparable is also for the same reason that it was a 100% government owned company. 11. The Court finds that the view taken by the ITAT in the present case, which is consistent with the view expressed by the Mumbai Bench of the ITAT and which has been affirmed by the Bombay High Court, is indeed a plausible one to take. 12. Whether taking up a 100% government owned company as a comparable would be justified or not would depend on the facts and circumstances of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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