TMI Blog2017 (2) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... this company is also functionally different, therefore cannot be taken as a good comparable. We accordingly direct the TPO/AO to exclude this company from the list of comparables. Comparables Research Support International Ltd., Neeman Medical International Ltd., Pfizer Ltd. (Seg.), Choksi Laboratories Ltd. and Tata Life Sciences Ltd. - Though assessee has contended that these comparables are functionally similar and can be called to be good comparables, but it requires a proper verification by the TPO. Accordingly, we restore the matter to the AO/TPO to examine these comparables and if they are found to be good comparables, they can be considered for determining the ALP of the international transactions. The TPO is also at liberty to search more comparables which are similar to assessee's profile in order to determine the ALP of international transactions. Appeal of the assessee stands allowed for statistical purposes. - IT(TP)A Nos. 1286/Bang/2010 - - - Dated:- 22-2-2017 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER For the Appellant : Shri Chavali Narayanan, CA For the Respondent : Shri R.K. Jha, CIT(DR) ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch conducted on both Prowess and Capitaline databases (two widely recognised databases for obtaining publicly available financial information). The Hon'ble DRP, in turn, has erred in upholding the action of the learned AO / TPO without specifically addressing this contention. 8. The learned AO / TPO erred in rejecting certain comparable companies on' account of persistent operating losses on one hand and accepting certain super profit making companies on the other hand. 9. The learned AO / TPO erred in rejecting certain companies having different accounting year (i.e. companies having accounting year other than March 31 or companies whose financial statements were for a period other than 12 months). 10. The learned AO / TPO erred in rejecting certain companies for not having foreign exchange earnings (and in some cases for having foreign exchange earnings less than 25% of the revenues). 11. The learned AO / TPO erred in applying 'service income lesser than ₹ 1 crore as a comparability criterion in the fresh economic analysis conducted by the learned TPO. 12. The learned AO / TPO erred, in accepting! rejecting certain companies using unreasonable co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of arm's length price ( ALP ) using only Prowess database. In this regard, the Appellant submits that the Appellant has undertaken a fresh economic analysis on Prowess database including other widely used databases (i.e. Capitaline Neo and ACE TP databases) to identify comparable companies engaged in contract R D services in support of the arm's length nature of transaction with its AE and accordingly, has identified five comparable companies. Therefore, the Appellant submits that the learned TPO has erred in law/facts by not considering certain companies which otherwise comparable to the Appellant and given this, the Appellant should be given an opportunity to benchmark the impugned transaction using the fresh search process. (Detailed economic analysis is enclosed as Attachment 1) The Petitioner further submits that the above additional ground is being filed by way of abundant caution. The additional ground raise issue which is fundamental to the appeal and the non-admission and non-adjudication of the same would result in an incomplete appreciation and adjudication of the matter. The Petitioner submits that the failure to raise this ground at an earlier stage ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asic comparability criterion of functional similarity which renders seismic services and does not provide any pharmaceutical R D services. It also fails atleast 25% earning from exports filter applied by the TPO himself. The profile of Alpha Geo India Ltd. is available at page 386 of the compilation of the assessee, according to which the company provides the following services:- - Designing and preplanning of 2D and 3D services - Seismic data acquisition in 2D and 3D - Seismic data processing/reprocessing/special processing - Seismic data interpretation - Generation, evaluation and ranking of prospectus - Reservoir analysis - Topographic surveys with GPS/RTK - Tape transcription - Digitisation of hard copies of maps, seismic sections and well logs into CGM/SEGY/LAS formats - Third party QC for acquisition and processing 7. Since the profile of this company is not similar to the assessee's profile, this company cannot be called a good comparable for determining the ALP. Therefore, we are of the view that this company has to be excluded from the list of comparables on account of functional difference. 8. With regard to Celestial Labs Ltd., i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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