TMI Blog2019 (3) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... has its own brand value. Therefore, it cannot be held to be a good comparable for determination of the ALP for the international transactions. We accordingly direct the AO/TPO to exclude this company from the list of comparables while determining the ALP for international transactions. Accordingly, we direct the AO/TPO to exclude these two comparables and recompute the ALP in terms indicated above after setting aside the assessment order in this regard. - IT(TP)A No.2149/Bang/2017 - - - Dated:- 8-6-2018 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER For The Assessee : Shri. Narendra Kumar Jain, CA For The Revenue : Smt. Uma Venkatesan, CIT-DR ORDER Per Sunil Kumar Yadav, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) Not appreciating that M/s Kerala Travels Interserve Ltd. is functionally different since it is engaged in various activities, like authorized dealers of foreign exchange, air ticket commission, etc and there is no separate segmental reporting comparable to the functions carried out by the Assessee. e) Adopting Cox Kings Ltd. as a comparable without appreciating that it is a large company having brand intangibles and is functionally different; f) Not making proper adjustment for enterprise level and transactional level differences between the Appellant and the comparable companies g) Not recognizing that the Appellant was insulated from risks, as against comparables, which assume these risks and therefore have to be cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d., ii. Mahasagar Travels Ltd., iii. Ace Tours Worldwide Ltd., iv. Mercury Travels Ltd., v. Crown Tours Ltd., vi. Tamarind Tours Pvt. Ltd., vii. Globe Forex Travels Ltd., 3. The TPO has taken 3 more comparables in addition to the comparables taken by the assessee in transfer pricing study. The final list of comparables prepared by the TPO is also extracted hereunder: i. Cox Kings Ltd., ii. Kerala Travels Interserve Ltd., iii. India Asia leisure services Ltd., iv. Ace Tours Worldwide Ltd., v. Tamarind Tours Pvt. Ltd., vi. VMV Holidays Ltd., vii. Mahasagar Travels Ltd., viii. Mercury Travels Ltd., ix. Crown Tours Ltd., x. Globe Forex Travels Ltd., 4. The assessee filed an objection b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als of comparables and the assessee company, the Kerala Travels Interserve Ltd., cannot be called to be the good comparables for computing the arm s length price for the international transactions. The learned DR on the other hand has placed reliance upon the order of the AO/DRP. 6. Having carefully examined, we find that TPO has already taken the total 10 comparables and with respect to 8 comparables, assessee has no objections. With respect to Kerala Travels Interserve Ltd., we have carefully perused its financial statements and we find the main revenue is from different activities and not from the tour operations. Therefore, Kerala Travels Interserve Ltd., cannot be held to be the good comparable and we accordingly direct the AO/TP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Hon ble Delhi High Court in the case of Principal CIT Vs. Oracle (OFSS), BPO Service Pvt. Ltd., in ITA No. 124/18 dated 5/2018 in which their Lordship has held that while considering the comparables, the likelihood of profits derived or attributable to the brand having regard to the consistency of the quality of service from entities able to offer would be relevant although functionally the two entities may be similar in terms of services or products they offer, brand does play its own role in price or cost determination. The learned DR placed reliance upon the order of the AO and DRP. 9. Having carefully examined the orders of authorities below and the material available on record in the light of rival submissions, we find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es play its own role in price or cost determination. If this singular aspect is kept in mind, the ITAT s approach cannot be faulted with. 10. In the light of the aforesaid judgments of Hon ble Delhi High Court and the annual report of the Cox Kings, we find that Cox Kings is involved in different activities besides tour operation and has its own brand value. Therefore, it cannot be held to be a good comparable for determination of the ALP for the international transactions. We accordingly direct the AO/TPO to exclude this company from the list of comparables while determining the ALP for international transactions. Accordingly, we direct the AO/TPO to exclude these two comparables and recompute the ALP in terms indicated above aft ..... X X X X Extracts X X X X X X X X Extracts X X X X
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