9911796707
TMI Blog2019 (4) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case and in law, the Ld. AO/ Deputy Director of Income Tax, Transfer Pricing Officer - 1(4), New Delhi (Ld. TPO) Learned Dispute Resolution Panel -1 ("Ld. DRP") erred in re-computing the arm's length price ("ALP") of the Appellant's international transaction at Rs. 91,360,882 as against Rs. 79,280,797 determined by the Appellant and thereby making an addition of Rs. 12,080,085 on that account to the Appellant's income. 3. That on facts and circumstances of the case and in law, the Ld. AO/ Ld. TPO/Ld. DRP erred while making an aforesaid addition of Rs. 12,080,085 to the value of international transactions by: (i) rejecting the Transfer pricing documentation (and the search process adopted therein) required to be maintained u/s 92D(1) of the Act read with Rule 10D of the Income Tax Rules, 1962 ("the Rule") and performing a fresh search without any cogent reason; (ii) rejecting all the comparable companies (Except Excellent Insurance Broking Services Ltd.) selected by the Appellant in its transfer pricing documentation; (iii) selecting "Global Procurement Consultants Limited" and "TSR Darashaw" as companies comparable to the Appellant by disregarding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 06/03/2013, included the above transfer pricing adjustment. Aggrieved, the assessee filed objection before the learned DRP. The learned DRP issued directions to the Ld. AO/TPO for excluding one of the comparable and also allow the working capital adjustment. Pursuant to the direction of the learned DRP the learned TPO recomputed the adjustment to Rs. 1,20,80,085/-. The assessee, being aggrieved with the above adjustment, has filed appeal before the Tribunal raising the grounds as reproduced above. 3. The sole addition in dispute is in respect of the transfer pricing adjustment to the International transaction of marketing support services. 3.1 The facts qua the issue in dispute are that the learned TPO, noted the agreement between the assessee and AE in respect of the following services and characterized the assessee as limited risk-taking service provider: "BFWBO will provide Marketing support services and other similar auxiliary sales support services in respect of BFC products. BFWBO shall use its best effort to support BFC, identify and predict market trends, analyze customers needs, improve customer relation and facilities the information flow between BFC and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services Private Limited. 3.6 The learned DRP also rejected the request of the assessee for considering the comparables chosen by the assessee and directed the learned TPO to compute the adjustment as under: "7.4 As per the agreement, the taxpayer is providing marketing support services and other similar auxiliary sales support services in respect of BFC products. BFWBO shall use its best efforts to support BFC, identify and predict market trends, analyze customers needs, improve customer relations and facilities the information flow between BFC and its customers. Since all of the following comparable companies are exclusively involved in providing cargo handling, courier activities, travel agency business and logistic business, therefore, this DRP agrees with the TPO that following companies are not functionally comparable, hence, he has rightly rejected the same. S.No. Name of the company Major business activity 1 . Delhi Assam Roadway Corp. Ltd. Cargo handling 2. Malabar Coast Marine Services P. Ltd. Stevedoring activities 3. On-Dot Couriers & Cargo Ltd. Courier activities 4. PL Shipping & Logistics Ltd. Freight forwarding 5. Prime Air Global Ltd. Travel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-09, the Tribunal directed the learned AO/TPO to retain following 5 comparables: Sl. No. Name of the Comparable Companies OP/TC (%) after working capital adjustment 1. Best Mulyankayan Consultants Ltd. 1.24 2. ICRA Management Consulting Services India Pvt. Ltd. -2.83 3. IDC (India ) Ltd. 13.02 4. Indus Technical and Financial Consultants 12.07 5. Technicom-Chemie (India) Ltd. 3.20 Average 5.34% 4.1 The learned counsel submitted that if matter is remitted back to the Ld. AO/TPO then above 5 comparables may also be considered for inclusion. 4.2 In respect of the company M/s Global Procurement Consultant Ltd., the learned counsel submitted that it was engaged in providing procurement services for various government organization and thus functionally dissimilar to the assessee. The learned counsel referred to page 4 to 24 of the annual report of the company and submitted that the company earns income by way of consultancy charges and the project undertaken includes procurement review, procurement advice and management, procurement governance, bid support services, performance review, valuation and Finance services, whereas the assessee is eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that this company is one of the company, selected by the assessee as a comparable and in the show cause notice, the learned TPO accepted the company as comparable. However, in the final set of the comparable, the learned TPO did not include this company as comparable. Thus according to him, this company was rejected finally by the learned TPO. He also submitted that learned DRP though mentioned the fact of omission of the company as comparable, however, no direction has been issued by the Ld. DRP to include this company into the final set of comparables and therefore the learned TPO/AO is not justified in including this company while giving effect to the direction of the learned DRP. The Ld. DR on the other hand submitted that the learned DRP noted the fact of the omission of the company and thus this being a apparent mistake, the learned TPO selected the company in final set of the comparables, while giving effect to the direction of the learned DRP. According to him, the action of the learned TPO is justified. 6.1 We have heard the rival submission of the parties on the issue of exclusion of the company. On perusal of the order of the learned DRP, we find that the DRP has th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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