TMI Blog2014 (5) TMI 1184X X X X Extracts X X X X X X X X Extracts X X X X ..... a comparable stands accepted; has also not been specifically denied by the Revenue. In addition to this, no distinction on facts of the impugned and succeeding assessment year is pointed out. It emanates that the TPO's and Assessing Officer's orders dated 28.10.2011 26.9.2012 respectively, are prior in point of time than the TPO's order dated 31.10.2012 and assessment order dated 26.3.2013 for succeeding assessment year. In these circumstances, the aforesaid documents are admitted as a part of record. In addition to this, the fact also remains that from proceedings of assessment year 2009-10, acceptance of M/s KPIT Cummins as a comparable is not forthcoming - interest of justice would be met in case the issue is remitted back to the TPO for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and confirmed by the Dispute Resolution Panel (hereafter DRP) of ₹ 89,49,290/- qua its transactions with the parent company. In the course of hearing, the assessee has vehemently argued that the impugned adjustment has been wrongly made by rejecting M/s KPIT Cummins as a comparable and also after excluding foreign exchange as a relevant factor for the purpose of determining arm's length price. In support, it places on record paper books and case law (which would be dealt with in succeeding paragraphs) and prays for acceptance of the appeal. 3. In reply, the Revenue strongly supports the adjustment in question made by the lower authorities and prays for confirmation thereof. 4. The assessee is a 'limited liability' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a comparable. In the course of proceedings before the TPO, it quoted another comparable by the name of M/s KPIT Cummins. The TPO did not agree with the comparability thereof. After taking into consideration the material quoted by the assessee, he issued show cause rejecting its pleas, inter alia, observing that despite an agreement between the assessee and its parent to enter into a service agreement based on 'cost +' method after transfer pricing study, no such consequential action had been forthcoming. Similarly, the TPO noticed that the transfer pricing study was inappropriate as in a correspondence dated 1.3.2007, the assessee had proposed invoices at the rate of cost + 20% by following consistency which was reviewable after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Less: Actual payment for services provided to AE as disclosed in Form 3 CEB ₹ 197340752/- Difference proposed to be adjusted ₹ 89,49,290/- In response, the assessee in its representation dated 10.10.2011 reiterated the comparability of M/s KPIT Cummins vis- -vis the impugned international transactions on the ground that the parent entity place of operations in UAE fell in rest of the world category. It drew parallels of the other two comparables with itself and the PLI was computed @ 15.78% (assessee), 19.43% (M/s L T Valdel) and 10.81%(M/s KPIT Cummins). The assessee submitted that the operating profits also were required to be fine tun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income. The DRP has also confirmed the action of the TPO. In consequence, the impugned assessment order has been passed by the Assessing Officer. Therefore, the assessee is aggrieved. 7. We have heard both parties at length and perused the case file. In the course of hearing, the assessee has produced assessment order as well as TPO's order pertaining to succeeding assessment year dated 31.10.2012 and 26.3.2013. The Authorized Representative states that the very entity M/s KPIT Cummins stands accepted as a comparable in succeeding assessment year whereas in the impugned assessment year, the relevant claim has been turned down. Thereafter, the assessee invites our attention to the paper book page 249 to explain that M/s KPIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f record. In addition to this, the fact also remains that from proceedings of assessment year 2009-10, acceptance of M/s KPIT Cummins as a comparable is not forthcoming. That being the case, we are of the opinion that interest of justice would be met in case the issue is remitted back to the TPO for afresh proceedings in accordance with law. We also leave it open for the TPO to adjudicate upon the functional similarity of the said comparable vis- -vis facts of this case. It is made clear that in case it is found that M/s KPIT Cummin has not been treated/admitted as a comparable in the succeeding assessment year 2009-10, this appeal would be deemed to have been dismissed. 10. Now we come to the second issue of inclusion of foreign exchang ..... X X X X Extracts X X X X X X X X Extracts X X X X
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